Rockland Township power plant appeals tax assessment
The Derrick, 6/5/02 By JUDITH O. ETZEL

A special thank you goes out to The Derrick for allowing this story to be posted

THE DECISION BY HANDSOME LAKE ENERGY LEAVES TAX REVENUES IN LIMBO FOR TWO MUNICIPALITIES AND A SCHOOL DISTRICT.

Handsome Lake Energy, owner of a gas-fired generating plant in Rockland Township, has appealed its $28 million tax assessment and is taking the issue to Venango County Court.
The county board of assessment appeals' refusal last month to lower the assessment figure was "arbitrary and capricious" and warrants further examination by the court, claims the company's appeal documents,.

The decision to appeal the $28 million assessment leaves more than $400,000 in property tax revenues in limbo for Cranberry School District, Cranberry Township and Venango County.

In mid-May, the three-member appeals board denied a request by Handsome Lake, part of Constellation Power of Baltimore, Md., to re-examine how the $28 million figure was computed. No explanation was given as to the denial.

At that time, Handsome Lake representatives said the company planned to have the property appraised and then appeal the assessment decision.

In arguing for a lower figure, somewhere between $8.5 million and $10.5 million, Handsome Lake said that although the plant cost $103 million to build and equip, the actual value for tax purposes should not include equipment and furnishings.

Energy company officials argued that the bulk of the value includes the Pratt & Whitney power generating engines and the labor costs incurred in installing the machinery. That figure is pegged at about $70 million.

What is taxable are land costs, site preparation, buildings to house the turbines and generator, a control building, enclosures and minor miscellaneous costs, the company argued.

Court documents show the county property assessment at $1,487,000 for the 50.5 acres of land and $26,599,970 for buildings. The total assessment figure is $28,086,970, the number left intact by appeals board members Arch Newton, Maurice Stiglitz and Barbara McGarvey.

In its appeal, Handsome Lake is arguing the fair market value used to determine the assessment "is in excess of the actual fair market value" of the property. It continues that the $28 million assessment is "prejudicial and discriminatory" and does not conform to property assessments in Rockland Township or anywhere else in the county.

Handsome Lake, represented by attorneys from the Kirkpatrick & Lockhart law office in Harrisburg, said the assessment deprives the company "of due process and equal protection" under the U.S. and Pennsylvania constitutions.

"The assessment is improper, inequitable, unjust, unfair and unlawful," concludes the company's appeal to overturn the hearing board's decision to leave the $28 million figure intact.

At $28 million, the plant would generate annual property taxes of $348,278 for Cranberry School District, $143,805 for Venango County and $29,013 for Rockland Township. Taxes paid in 2001 on the generating plant and property were miniscule since the project was still under construction.

No court date has been set to hear the Handsome Lake appeal.