EXELON GENERATION disagrees with the value placed on its Dresden Generating Station in Goose Lake Township and has taken its case to the Grundy County Board of Review. The three-member panel will determine the plantï¿½s value within 30 days of the Jan. 9 hearing.
Stuart Whitt, the attorney representing the impacted taxing districts, received word Thursday, Jan. 17 that the Grundy County Board of Review confirmed Grundy County Assessor Dave Henderson's assessment of the Dresden Nuclear Generating Station at $567 million.
Ann Gill Editor
Exelon Generation disagrees with the value placed on its Dresden Generating Station and it's arguing its case before the Grundy County Board of Review.
Attorneys representing Exelon appeared before the three-member panel on Wednesday, Jan. 9, asking for a $190 million reduction in its equalized assessed value (EAV).
The company is appealing its 2012 property tax assessment of $567 million.
The value of the generating station, for tax purposes, was determined by Grundy County Supervisor of Assessments Dave Henderson based on appraisals presented by the company and taxing bodies including the Unit #1 School District, Coal City Fire Protection District, Coal City Public Library District and Grundy County.
The fair market value of the generating station ranges between $2.23 billion and just over $1 billion. An appraisal by the taxing districts notes the higher value. The assessor based his figure on a fair market value of $1.79 billion.
At the center of Exelon's argument is the cost of decommissioning, which is not being considered by the assessor's office in determining the value of the generating station.
Exelon claims the market value of the plant should take into consideration the $550.5 million it needs to meet its obligation for decommissioning. The company indicates its cost at $126.5 million for Unit 1 that was retired in 1978 and $424 million for Units 2 and 3 currently in operation.
Attorneys representing the impacted taxing bodies stated the cost of decommissioning has been prepaid by the state's electric consumers.
Whitt Law, the firm representing the taxing districts, noted that prior to deregulation the Illinois Commerce Commission (ICC) required consumers to pay ComEd decommissioning cost that were deposited into a trust fund.
After deregulation, ComEd transferred its nuclear divisions to Exelon and signed a contribution agreement requiring it to pay the costs of decommissioning those nuclear generating stations. Separate funds and trust agreements, they said, exist for each individual nuclear unit.
Since 1991 Grundy County has not accounted for the cost of decommissioning when setting Dresden's assessed value, a move made at the written direction of ComEd.
"I was very pleased with our legal team as I believe they picked apart each argument made by Exelon. They did a tremendous job," said Dr. Kent Bugg, superintendent of the Unit #1 School District.
Bugg attended the hearing in which each side was given 30 minutes to present its case.
Exelon attorneys are also seeking a credit for being part of a fleet and feel that is worth at least 7 percent. The assessor's office gave them a 3.5 percent fleet credit.
The Board of Review will determine the plant's value within 30 days of the hearing and that value is what the company's tax bill will be based on.
Dresden's current EAV is $495 million and represents about 68 percent of the entire EAV of the Unit #1 School District. That means the company pays $14.75 million in taxes to the school district.
If the Board of Review agrees with the county assessor and places the value of the plant at $567 million, at the district's current tax rate of $2.98 it would generate $16,896,600 for the schools. A drop in value to the $376 million Exelon has requested, would result in a $5.69 million loss to the district.
"Therefore, the decision of the Board of Review has major implications for our school district," Bugg said.
Should the Board of Review rule in favor of the taxing districts, Exelon would most likely appeal the decision to the Illinois Property Tax Appeals Board (PTAB).
"In this case, although we would collect our taxes from Dresden as usual for 2013, we could be faced with the possibility of tax paybacks if PTAB rules in favor of Exelon. For this reason, reaching another long term assessment agreement with Exelon is imperative," Bugg said.
The school and other local taxing districts are in the final year of a five-year agreement with the company. The previous agreement set the value of the plant at $475 million, $44 million less than the assessor's calculation, but included annual increases of $5 million.
The taxing bodies have initiated discussions regarding another agreement with the company, one they say would provide long term economic security to both the district and Exelon.