By Matt Joyce Tribune-Herald staff writer
Tuesday, July 26, 2005
CAMERON – Developers of a proposed power plant near Rockdale reduced their request for Milam County tax abatements and threw in $100,000 for a county park to sweeten their desired incentive deal after meeting with county officials.
The Milam County Commissioners Court, which reviewed the updated request Monday, has welcomed the economic boost and new jobs that would come with Constellation Energy's plans to invest $900 million to build a plant at Alcoa's Rockdale aluminum-smelting operation.
But the Maryland company's initial request for a 75 percent county property tax abatement for 10 years concerned some commissioners and county residents because it would have set a new standard in Milam County incentives packages.
Constellation's tempered request calls for 10 years of tax breaks, ranging from 50 percent in 2007, moving up to 55 percent in 2009, and then decreasing incrementally to 40 percent by 2016. It also offered the county up to $100,000 for a park, recreation facility or other county improvement near the Rockdale site.
“It's better than their initial proposal,” Milam County Judge Frank Summers said. “Ten years is still not a good thing, but it's more in line with the variable rate we'd like to see and more in line with precedent we set in the past.”
In earlier cases, Milam County has granted tax abatements that lasted seven years and decreased in amount each year. The county commissioners are not scheduled to vote on the Constellation request until August.
Alcoa has been negotiating with Constellation for months as Alcoa works to replace three generation units that will be closed in 2007. Under Constellation's optimal schedule, the company would begin a project to build the plant later this year and open it for operation in 2009.
The Rockdale Power Project would burn lignite coal extracted from Alcoa's Three Oaks Mine, which also is located on Alcoa's 35,000-acre site near Rockdale. The plant would be capable of producing 564 megawatts of energy, 20 percent of which Alcoa plans to purchase for its smelter operations. Constellation estimates the plant would have a 40-year life.
Kendall Coyne, Constellation's director of tax planning, said the decreased county tax abatements are still adequate to make the project viable.
“Although we would still appreciate 75 percent, ... we think we've arrived at something that we can – from an economic perspective – stomach,” Coyne said.
Members of the Local 2078 of the International Brotherhood of Electrical Workers urged the commissioners court to support the Constellation project. Spokesman Earl Schneebeli [Financial Secretary] said the union expects the new plant to create more jobs.
“We think it's a golden opportunity in the sense that utility jobs are good paying jobs,” union spokesman Earl Schneebeli said. “They're good stable jobs, there's not a lot of turnover.”
The union hopes to work with Alcoa to find a way for as many employees as possible to keep their jobs between the closure of the current generation units in 2007 and the opening of the Rockdale Power Project in 2009, said Bernie Holstine, the union's business manager.
Also on Monday, the commissioners discussed forming a reinvestment zone for all or part of unincorporated Milam County. The designation is required for an area before projects are eligible for tax abatements, Summers said.
mjoyce@wacotrib.com
757-5735
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