LYONS — For years the Ginna Nuclear Power Plant in Ontario has been a significant source of tax revenue for Wayne County, the Wayne Central School District and the town of Ontario.
But with the nuclear power plant’s profitability eroding over the past few years because of its inability to compete with gas-powered plants, that revenue has begun to drop through a series of payment-in-lieu-of-taxes agreements designed to keep the aging plant open and hopefully profitable.
The newest PILOT, approved by the Board of Supervisors last week, might be called the “end-of-days” PILOT. It covers 2019-20 to 2028-29, with 2029 the last year the 581-watt nuclear plant is licensed to operate. Democrats Kenan Baldridge of Rose and Susie Jacobs of Walworth voted against it, while Republican Tony Verno of Williamson abstained.
The PILOT has also been approved by the school district and the town of Ontario. It lays out a schedule of diminished revenues over the course of 10 years: from total PILOT payments of $7.54 million in 2019-20 — the same amount as 2018-19 — to $2.25 million in 2028-29.
The current PILOT was enacted in 2015 when Ginna, owned by Illinois-based Exelon Corp., stated that “changed electric power market conditions have significantly challenged the financial viability of the plant.”
County Administrator Rick House said the new PILOT reflects Ginna’s limited operational years and profitability.
“The plant is expected to slowly diminish its output,” said House. “The PILOT diminishes as well.”
He and Savannah Town Supervisor Michael Kolczynski represented the county in negotiations with Exelon, along with representatives of the town of Ontario and the Wayne school district. The Rochester law firm Ferrara Fiorenza served as the legal counsel for the three taxing entities.
“We negotiated for a long period of time starting early this year,” House said. “We think this was the best deal that could have been had.”
The school district takes the biggest hit, said House, noting it gets nearly 64 percent of PILOT payments. The district’s revenue drops from $4.79 million in 2019-20 to $1.43 million in 2028-29.
While it’s never good to watch a revenue stream diminish to a relative trickle, House said the 10-year PILOT gives the county time to plan — from finding ways to grow revenues to figuring out ways to reduce spending.
“The handwriting is on the wall,” he said, adding it is unlikely from what he is told that Exelon will look to extend Ginna’s life beyond 2029.
Ginna is not the only revenue worry, he said. The state approved a plan to have counties pick up the money municipalities were receiving under the Aid and Incentives to Municipalities program. In turn, counties are being told by the Cuomo administration that a new revenue source from the expansion of sales tax on internet sales will more than make up for the $664,000 in sales tax the county must now give to its towns and villages to restore the AIM money.
The state is telling Wayne that it should be getting about $900,000 from the internet sales tax expansion.
“Those numbers (by the state) are all speculative,” House said.
While the administrator said the county is in excellent financial health — with $48 million in the fund balance at the end of 2018 — that number could take a hit if it can’t find ways to make up for the loss of revenue from the nuclear plant.
“We’re planning for reduced revenue,” House said. “We have to find a way to make up the revenue or reduce appropriations.”
He said the county would rather find more revenue, because reducing appropriations could mean a reduction in services, which he said could affect the quality of life for residents.