• 54°

Duke incentives could come early

If Duke Energy’s power plant becomes reality, local governments and schools will begin receiving revenue in 2002 – three years earlier than expected.

Thursday, June 07, 2001

If Duke Energy’s power plant becomes reality, local governments and schools will begin receiving revenue in 2002 – three years earlier than expected.

That’s in exchange for a competitive 10-year tax abatement recently negotiated by Lawrence County officials.

"We have reached a verbal agreement, and we’re now in the process of ironing out details," said Charles Claunch, director of project development for Duke Energy North America.

Claunch called the tax break a "win-win" situation for the company and the community, especially Rock Hill School District.

"Lawrence County was able to come up with a competitive package that’s also a benefit to the community," he said. "Part of the verbal agreement is we will make up front payments That’s very important to Rock Hill Schools, and could possibly help them pay off the levy early."

Rock Hill superintendent Lloyd Evans could not be reached for comment this morning. Evans was attending the Lawrence County Commission meeting, where commissioners expected to release more details about the tax incentive package.

Duke plans to build a natural gas fired power plant on 40 acres near Hanging Rock, representing a $500-million investment.

"Technically, they wouldn’t have to pay anything until 2005," said commissioner Jason Stephens, who represented the county in recent talks with Duke.

However, a side agreement negotiated by the school system, the county and other economic development officials changed that, Stephens said.

The county, township, health department, fire department, schools and other taxing districts can begin using Duke money in 2002.

"It’s worth more to us to put the money to work earlier," Stephens said.

In general, the agreement grants a 100-percent tax break for 10 years, but calls for Duke to make payments in lieu of taxes (PILT) equal to about 42 percent of what they would have paid in taxes. And, those payments will be made over a 13-year period, Stephens said. In 2015, Duke will begin making regular tax payments.

The county has not begun tax abatement discussions with Calpine Inc. – the company that first eyed Hamilton Township for a similar natural gas fired energy plant – but negotiations are expected.

"We anticipate discussing an equivalent agreement with Calpine," Stephens said.

Stephens said the county kept everyone’s interests in mind while trying to forge an attractive deal for Duke.

"We’ve done our part by keeping revenue coming in, and at the same time made a very competitive offer," he said.

Despite the tax break, Duke’s payments to government entities involved will surpass taxes currently paid by the county’s highest taxpayers – Dow Chemical, Liebert, Wal-Mart/Sam’s and Lowe’s – combined, Stephens added.

"Then, after 10 years, this plant will still be there as the largest taxpayer in the county and if Calpine builds two plants, they will surpass even that," he said. "The economic impact is phenomenal."