Duke Energy seeking $7.2 million in tax incentives for new plant
By Jessie Burchette
Duke Energy is seeking $7.2 million in tax incentives for its planned $600 million expansion of generating facilities at Buck Steam Station.
Duke plans to build a 620 megawatt natural gas combined cycle plant near the company’s current coal-fired operation that produces 464 megawatts of electricity.
Work will begin later this year as soon as Duke receives state approval for all necessary permits. The first phase of the project would go into operation in May 2010.
Duke Energy estimates the project will create 500 construction jobs for 18 month. Plant operations will require 20 to 25 full time employees.
The Rowan County Board of Commissioners will conduct a public hearing and vote on the request Monday evening.
Under the county’s incentive policy, Duke Energy qualifies for an 85 percent rebate of county taxes paid for five years.
County officials say the $580 million investment is the largest single investment ever in the county.
The N.C. Department of Revenue assesses the value for taxation of publicly regulated utilities. In this case, Duke’s allocation is 49.8 percent. Based on that calculation, $284 million will be taxable. Using the county’s current 59.5-cent tax rate, Duke would pay $1.7 million in county taxes, with the county rebating $1.4 million for five years.
“The key figure is what Rowan County will be keeping,” Arnold Chamberlain, chairman of the board of commissioners, said last week. “We will be getting $253,000 for five years. That’s new money that can be used to do things that we have to ó to pay debt service on a new jail.”
Chamberlain welcomed the Duke project, adding that he hopes it will spur other utilities to want to invest in Rowan.
Officials with the Salisbury-Rowan Economic Development Commission point out that while the county will receive less tax dollars at the start, the revenue stream will increase. Unlike typical businesses, the tax assessment set by the state is not subject to depreciation.
At the expiration of the incentive agreement in 2017, the county would retain the full $1.7 million annually.
Officials with the EDC have calculated the county would collect more than $34 million during 20 years and retain $37 million.
The Miller’s Ferry Fire Department would collect more than $120,000 annually in additional revenue, and more than $3.4 million over 20 years from taxes on the generating facility.
Duke has operated the Buck Steam facility since 1926 and has made various upgrades and expansions.
The county’s biggest payout of tax rebates went to another power company. Carolina Power and Light (CP&L) announced plans in 2001 for a $400 million facility off N.C. 801.
Although the investment topped out under $400 million, the county rebated $7.8 million of $9.5 million taxes paid between 2003 and 2007 on the facility known as Rowan County Power Generating LLC.
The combined cycle, gas-fired plant generates 925 megawatts.
CP&L changed its name to Progress Energy, which sold the Rowan facility to Southern Power, a division of Atlanta-based Southern Company.
Rowan County Power Co. ranks as the county’s top tax payer, with Duke Energy in second place.
The impact statement on the Duke project, prepared by the Economic Development Commission, also cites Duke Energy’s corporate behavior in Rowan County, including the establishment of the Project Wild education site, the largest of its kind in the state.
Hundreds of school children visit the site annually to see bluebirds, herons and wild animals thriving at a power generating facility.
The Rowan County Board of Commissioners meet Monday at 4 p.m. in the Cohen Administration Building, 130 W. Innes St.