Without NRG, school district to have massive layoffs, tax hike

Editor’s note: This is the second in a four-part series previewing Monday’s public hearing with the Public Service Commission on NRG.

Questions about the future of NRG Energy in Dunkirk – whether it will be repowered being the key one – have been a concern for interested citizens of Chautauqua County since the company announced its intention to mothball its Dunkirk generating station in March 2012.

Whether or not NRG will build the natural gas dual-cycle plant is a decision that lies in the hands of the New York State Public Services Commission.

NRG maintains the new plant will meet future reliability needs, otherwise there is no need to build it. The PSC has been studying the issues involved since January, when it was assigned the duty by Gov. Andrew Cuomo. The process is in the home stretch and the finish will include a public hearing on Monday at SUNY Fredonia’s Williams Center. Presentations by National Grid and NRG with a question and answer period will be given from 6-7 p.m., and the hearing will begin at 7 p.m. An administrative law judge will preside over the hearing, and people from the audience will be allowed to testify.

A key issue for taxpayers is the future of the revenues currently received under a payment in lieu of taxes agreement reached between the Chautauqua County Industrial Development Agency and NRG in 2008.

One person who is planning on speaking is Dunkirk City School District Superintendent Gary Cerne. The NRG PILOT payment the district receives through the CCIDA is a significant component of the budget.

“Obviously, the PILOT is huge for us. We’d have to raise taxes 42 percent to make up for the loss of revenue,” Cerne explained. “Our exact amount is $4,062,020, which is 10 percent of revenue. How do you make up 10 percent of your revenue? It’s impossible. The only way to make it up would be to raise taxes 42 percent, or I could cut 58 teachers, neither of which is possible. We’re between a rock and a hard spot.”

The PILOT program has outs for both the CCIDA and NRG. As it stands now, NRG will make its regularly scheduled payment for the first half of the next budget cycle, but after that the agreement calls for the payment to be based on the number and size of generators in operation. Currently, under a reliability need, NRG is running one of its two smaller generators and is set to do so until 2015.

If the NRG Dunkirk PILOT program ends the plant and property return to the tax rolls.

“Then the legal battle starts. What’s that plant worth? Who knows how many years that would take to solve. So in the short term we’ve got a revenue problem,” Cerne said, adding the district has begun making contingency plans. “We’ve got a whole list of things that we can do and we’re already starting to nibble away at a few things, but we don’t want to be overreactive because who knows, if the repowering comes in we might be back at the table renegotiating the PILOT if they get the repowering.”

Cerne said he had no idea how the issue would play out.

“It’s so hard to determine. It depends on whose numbers you listen to,” he added. “We’ve been to meetings with National Grid and things like that. They’ve got a set of numbers and I’m sure NRG has a set of numbers that are contradictory to theirs. It’s hard to even determine which direction it may go right now.”

Cerne said the district’s employees are being asked to get involved with the hearing. Nancy Baker, the teachers union president, has sent emails to members.

“I have had conversations with her and John Hollins, the CSEA president, and Rock Vallone, the administrator’s president. I’ve spoken to all three either via email or conversations and I sent another reminder to everyone in the district (Tuesday) of the importance of being there on Monday.”

Cerne said he was planning on speaking but had no details on a lineup of speakers.

“I’m definitely planning on sharing some of the information with everyone there,” he added. “I know Mrs. Baker would like to speak. I am hoping we have a meeting before long to sort out the lineup. We’re trying to rally as many people as we can. We want a full house.”

Parking will be available in both the Dods and Steele hall parking lots, along with the Ring Road lots. A CARTS bus will be circulating to provide rides to the Williams Center, which is handicapped accessible.

Coming Sunday: NRG’s impact on Chautauqua County. Send comments to gsnyder@observertoday.com