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Davis-Besse devaluation hurts Benton-Carroll-Salem district

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    The Davis Besse Nuclear Power Station in Oak Harbor, Ohio on August 4, 2014.

    THE BLADE/JETTA FRASER
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    In this April 4, 2017, file photo, plumes of steam drift from the cooling tower of FirstEnergy Corp.'s Davis-Besse Nuclear Power Station in Oak Harbor, Ohio.

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OAK HARBOR, Ohio — The Davis-Besse nuclear power station in Ottawa County received a nearly 75 percent devaluation from the Ohio Department of Taxation, which will result in significant loss of funding for area governments. 

The plant, previously valued at $184 million by the state for tax purposes, will now be valued at $49 million for tax year 2018. That means the Benton-Carroll-Salem school district will lose $4.6 million of its roughly $20 million in annual revenue in January.

“It’s a little frustrating,” district treasurer Cajon Keeton said. He added the district is at a standstill while it waits on any possible state aid, and what sort of levy, if any, would be needed to support the district’s programs. 

First Energy told the district, along with other area stakeholders, that it would be pursuing devaluation in March as part of its plans to keep its unprofitable nuclear plants afloat amid abundant, cheaper, natural gas. The corporation is also seeking a subsidy from customers through a proposal currently stalled in the Ohio General Assembly. House Bill 178, also known as the Zero Emission Nuclear credit bill, would provide an additional $300 million annually to the company through increased rates for customers. 

“We’re still champions of that piece of legislation,” Mr. Keeton said. “Our question to the state, to the Department of Taxation, is how is a company allowed to do this?”

Jennifer Young, a spokesman with First Energy, said the company reduced the book value of the plant to reflect its fair market value, in line with its intention of leaving the competitive generation market. 

“As a result of this adjustment, the taxable value of the plants and equipment has been reduced,” she said in an email. “Municipalities will begin to see the impact of the tax payment changes in 2018. We understand that local communities need to plan budgets in advance, and to assist with that process, we previously had shared the estimated new taxes based on the company’s tax returns with impacted schools and communities.”

State Sen. Randy Gardner (R., Bowling Green) represents the area, and said a provision in the state’s budget will kick additional funding from the state to the district to fill some of the gap. An estimated $600,000 to $900,000 should go to the district because of the sudden drop-off, he said, acknowledging that the additional funding does not make the district whole. 

He, along with State Rep. Steve Arndt (R., Port Clinton), said in a joint statement that the state should provide additional support to school districts to help school districts affected by drastic property devaluations, as well as granting county auditors the ability to appeal these tax devaluations. 

“We believe they should have that fundamental right to appeal,” Mr. Gardner said. 

Mr. Keeton said the district is relying on the state to support the district as it adjusts to the sudden change. 

“Randy has stood by our school district in the past,” Mr. Keeton said. “We feel absolutely certain that the state should step in.”

The district is unique in its heavy reliance on the plant, Mr. Keeton said. Prior to the devaluation, 40 percent of the district’s revenues came from taxes on the nuclear power plant.

Public utility taxes are calculated by the Department of Taxation, though a department spokesman said the numbers are not public record. In March, utility companies submit their own valuation to the state, which sends out valuation notices to the respective counties in October. Ottawa County Auditor Larry Hartlaub said he has been trying to determine how the plant can see a 75 percent drop in value in one year, but has been unsuccessful. 

“We’re not any closer to a real answer,” Mr. Hartlaub said. The plant paid roughly $11 million in taxes last year, he said, $9.2 million of which came from the public utility side that was just adjusted by the state. The remaining tax bill came from the property value, which is calculated by the county.

He said no Ottawa County resident will see an increase on their tax bill without a vote on a levy. In all, the plant will pay about $6.7 million less in taxes.

Contact Zack Lemon at zlemon@theblade.com419-724-6282 or on Twitter @zack_lemon.

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