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Last week Cayuga Power Plant officials announced a plan to convert the coal-powered plant to gas.  The plant, formerly AES Cayuga, is the largest taxpayer in Lansing.  It's devaluation over the past three years has been devastating to the Lansing Central School District in particular, accounting for significant tax rises for homeowners.  School officials are cautiously optimistic about how the conversion will impact the district.

"For a number of years, the power plant was subsidizing our tax rate and tax base," said Lansing School Superintendent Chris Pettograsso.  "As it has diminished it has had a greater impact on our taxpayers.  Our hope is, if this does happen, that some of the pressure to the homeowners will be diminished a little bit."

In 2008 the PILOT (Payment In Lieu Of Taxes) agreement approved by the Tompkins County Industrial Development Agency (IDA) valued the plant from $130 million to $255 million over the course of five years.  One year into the PILOT an amendment passed by the IDA on April 20, 2010 lowers the assessment from $160 million (which includes a $30 million rise this year as per the original agreement) to $100 million in 2013.

In 2012 a new amendment decreased the plant’s taxable value from the current $112.5 million to $60 million in three steps—to $86,250,000 in 2012, $74 million in 2013, and reaching $60 million in 2014.  As recently as last month School Business Administrator Mary June King presented projections on the impact of potential future plant devaluations that would inflate tax rate rises into double digits.

A conversion that keeps the plant open could mean an eventual rise in its value, though no local officials are saying it will reach the originally predicted $160 million value again.  While some Lansing officials are hopeful that the value willl rise, others have speculated it will be reduced further -- at least in the near future -- because of the high cost of the conversion.

"A lot of people are wondering what that means for us," Pettograsso said.  "As far as the Board of Education and the District is concerned, people are asking what our position is on the plant being converted to gas from coal. We're not here to talk about that.  We're here to let you know what the impact is on our school budget and how we're preparing for the changes if they occur, or if they don't occur."

In making its case power plant officials argue converting the plant to gas will create 563 construction jobs, and 90 permanent jobs including high tech jobs would be retained.  They say continued operation of the plant will pour millions of dollars into the local economy as the plant purchases local goods and services including maintenance and capital improvements.  Plant officials estimate that a 10.5% property tax base will be retained for the school district.  6.9% will be retained for the Town of Lansing, and 1.3% of the Tompkins County tax base.  But Pettograsso was clear that the numbers come from the Cayuga Power Plant, and do not reflect school district estimates. 

"Mary June and I met with some of the key players at the Cayuga Power Plant prior to them making this public," she said.  "We continue to collaborate with them to have a better understanding."

Lansing school officials are not the only community leaders watching the conversion proposal with interest.  On Monday Lansing Economic Development Committee Chairman Andy Sciarabba joined stakeholders across Tompkins County in distributing a plea to local business and government officials to write the state Public Service Commission in support of the proposal.  The document, originating from Tompkins County Area Development President Michael Stamm, urged letter writers to stress the number of jobs the conversion would create and keep in Lansing, the impact on property taxpayers, that electricity generated by the plant is needed to serve NYSEG customers, and is critical to local high tech businesses.  It noted that keeping the plant open as a gas powered plant is consistent with the state's goas as stated in the Energy Highway Blueprint.

"Mike Stamm felt the commissioner looks heavily at interaction with various people in the community on supporting or not supporting the facility change," Sciarabba says.

Plant officials submitted the conversion proposal to NYSEG on March 26th.  NYSEG is expected to make a recommendation on April 19th.  By the end of the third quarter the Public Service Commission will make its decision.  If approved, the plant will be expected to be up and running by the middle of 2017.

"At this point in time everything is preliminary," Pettograsso said.  "We are keeping it on our horizon as far as our budget is concerned. But we're not looking at it as an impact on our budget for next school year.  So we are continuing with the projection Mary June has shown us the last few years as far as what we think the Cayuga Power Plant's assessment will be.  We're still under the PILOT right now."

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