Blackstone, plant owners negotiate a new tax treaty

10-year extension was more than 5 months in the works

BLACKSTONE — After more than five months of talks and meetings, the town and the new owners of the power plant on Elm Street have successfully negotiated a new 10-year extension of a payment-in-lieu-of-taxes agreement between the plant and the town.

The selectmen announced the new tax treaty at a special meeting last night and also voted to schedule a special town meeting on Oct. 1 so the agreement can be ratified by town voters.

“This is an extraordinary agreement,” said Town Administrator Daniel M. Keyes, who along with Selectmen Daniel P. Keefe and Robert J. Dubois and Town Counsel Patrick Costello, were part of the town negotiating team that had been meeting with plant manager Jeff Stewart and other representatives of Vistra Energy Corp since the spring.

“This is a real plus for the town and puts us in an excellent financial position moving forward,” Keyes said.

The current 20-year agreement, which was brokered back in the 1990s when the Elm Street power plant was built, is set to expire next year, and the selectmen were anxious to extend the agreement by 10 years before that happened.

Instead of the plant paying taxes directly into the general fund, the PILOT agreement ratified by town meeting voters

“This is an extraordinary agreement. This is a real plus for the town and puts us in an excellent financial position moving forward.” —Town Administrator

Daniel M. Keyes

back in the 1990s allows the money – about $2.2 million annually through fiscal year 2020 – to be placed in a capitoll investment fund that was approved by special legislation.

Over the years, that fund has been used to fund projects like water/sewer infrastructure, road improvements, land acquisitions, fire trucks – even a new library.

Currently, the town has a formal long-range plan that balances most of its capital project needs and existing debt service annual payments with projected PILOT funds through 2020.

The new 10-year extension will net the town about $2.7 million over the next 10 years, which is an increase of $500,000 over the current agreement.

Keyes says that money will assist the town with future capital project needs, including mandated improvements to the town’s water filtration system.

Dubois said Tuesday that during the five weeks leading up to the special town meeting, the board needs to educate the public on how important the agreement is to the town.

“There are a lot of new people living in town since we negotiated the first agreement in the 1990s,” he said. “A lot of them don’t know the his

tory and how crucial this is to our town. It’s important that people realize what this power plant has done for our town over the years.”

Dynegy, Inc., which spent $3.3 billion in 2017 to acquire global energy and services provider ENGIE’s United States portfolio – including International Power America (IPA) of Blackstone – sold the portfolio last year to Vistra Energy Corp in an all-stock deal worth $1.74 billion, combining the two Texas-based power producers.

Vistra, the largest retailer and generator of electricity in Texas, is based in Irving, while Dynegy is headquartered in Houston.

Dynegy operates 27,000 megawatts of power-generating facilities throughout the Northeast, Mid-Atlantic, Midwest, and Texas, including the Blackstone plant, the NEA Bellingham cogeneration and ANP Bellingham power plants in Bellingham and the Milford Power LP in Milford.

Dynegy purchased the power plant in 2017, and the sale was finalized in October of that year. The company sold it that following November to Vistra, and that sale was finalized in May of last year, so it’s been sold and resold.

Blackstone town officials were preparing to negotiate a new 10-year extension of a payment-in-lieu-of-taxes agreement between the town and the power plant when it was under the ownership of Dynegy, but those talks were postponed until meetings were set up with the new owners.

The Blackstone facility – initially owned and operated by American National Power – is a 570-megawatt power plant utilizing two gas turbines that employ sequential combustion technology to reduce nitrogen oxide emissions, compared to traditional power plants.

The plant consists of two single-shaft designed, combined cycle units, each of which consists of a gas turbine, heat recovery steam generator and steam turbines that are combined together in a system that produces electric power at a much higher efficiency than is possible with each system operating independently.

The Blackstone plant effectively limits its water usage by using air-cooled condensers instead of conventional cooling towers with spray water.

Construction on the plant began in 1999, and it has been in successful commercial operation since 2002.