Nuclear plant value dispute likely headed to court

At the Town of Carlton's annual Board of Review Monday night, its three town supervisors made a quiet decision not to act on the request of Dominion Resources Inc.'s management to reduce the assessed value of its closed nuclear power plant, which the town has recorded at $457,398,600.

Alfred Kohnle, town assessor, said the value stands, in spite of the fact that the plant was assessed at approximately $10 million in 2014.

"At the annual meeting, the town's people said they want this to work through the system," Town Chairman David Hardke said. "We want to do what is legally right, and right now it is out of our hands."

Hardke said the issue is now being handled by attorney Amie Trupke of Stafford Rosenbaum LLP of Madison.The board's decision Monday sets the stage for a court battle with Dominion over the value of the decommissioned plant.

"We have received a revised property assessment from the town of Carlton," said Richard P. Repshas, licensing engineer for Dominion, on Monday. "We disagree with it and intend to appeal the assessment."

A new state law allows Dominion to bypass the Board of Review and go directly to court to challenge the town's assessment, said Linda Sinkula, Carlton town clerk. Dominion had filed a waiver with the town that exempted their executives from appearing at the Board of Review Monday, she said.

The town of Carlton last year had come to an agreement with Dominion and the county to value the decommissioned plant at $10 million. But then the town had the property appraised by an outside appraiser who said that the plant could be sold and reused. The town used this appraisal to determine its current assessed value.

Hardke has said that the town may have a buyer for the plant. The plant was sold to Dominion in 2005 for less than $200 million. The plant became unprofitable because the market price of the electricity it produced had dropped sharply, and Dominion closed the plant in 2013. Dominion has estimated that it will cost more than $1 billion to decommission the plant.

Dominion officials have said that the plant is not for sale because they are proceeding with the decommissioning. Dominion officials have stated they they have given up their operating license and that any buyer would have to go through the whole process of getting it relicensed by the Nuclear Regulatory Commission.

Kohnle said Monday the town has valued most of the lakefront parcels of Dominion's approximately 900 acres of property surrounding the plant at $350 per frontage foot, while Dominion has claimed that they have zero value. He said that he did research that showed that there was not much variance in terms of how close property was to the nuclear plant in terms of its value.

Dominion plans to store the spent fuel rods in above-ground vertical concrete casks on the north end of the property beginning in 2016. Dismantling of the buildings won't start until 2069 to allow the last of the radioactive material to decay over a long period, according to Repshas.

There is a lot at stake in determining the value of the plant, not only for the town of Carlton, but for Kewaunee County and the Kewaunee School District, said County Chairman Ron Heuer, who appeared at the Board of Review along with Brian Vogeltanz, president of the Kewaunee School Board.

In a letter to county officials Monday, Heuer said that if the $455 million value stands in court, the town of Carlton would then represent nearly 30 percent of the entire value of the county. The total value of county property last year was approximately $1.4 billion and, with the $455 million added, the total value would be close to $1.9 billion, Heuer said.

As a result, the Kewaunee School District would lose nearly $250,000 in state aid, Northeastern Wisconsin Technical College would lose about $800,000, according to Heuer. In addition, the county would lose about $713,000 of utility tax money, he said.

But there would also have to be a reapportionment of taxes across the county and residents would realize a real estate tax decrease, Heuer said.

The issue is further complicated by the fact that Dominion may have to pay taxes based on the $457 million assessment this year, while the issue winds its way through the courts, but then may require a refund if the courts decide in the company's favor, Heuer said.

Under the agreement that Dominion had reached with the town and county last year, it would have cushioned the blow of lost tax revenues to the municipalities by ensuring that the town and county revenue stream remain in place for the next ten years. Under the agreement, the town of Carlton would have received $356,631 annually in shared revenue from the state and the county would have received $713,262 annually until 2018. After that, additional payments from Dominion would have declined by 10 percent a year for five additional years.

"Carlton Township elected to walk away from that deal," Heuer said.

He noted that counties or towns do not generally have the expertise to deal with many of the issues associated with decommissioning nuclear power plants and that he had asked state legislators to look into adopting legislation that would help with this process in the future.