Date set for court hearing involving Handsome Lake power plant

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The date for a Venango County court hearing to determine just how many thousands of dollars in taxes will flow into municipal coffers has been set for mid-summer.

A court session to determine how much the Handsome Lake Energy generating plant in Rockland Township is worth is scheduled July 28-29 before Venango County Judge H. William White. The hearing date comes more than nine months after an appeals board nixed Handsome Lake's claim that the plant had been over-valued on the county assessment records.

"We had a status conference with the judge last week and now we have a trial date, if it goes that far," said George Thompson, solicitor for the county.

At stake is whether a $28 million assessment figure pegged for the generating plant will stand. That was the value put on the plant by the Venango County assessment office last year.

That figure, if left intact, would generate thousands of dollars in annual tax revenues for the three involved taxing bodies - Cranberry Area School District, Venango County and Rockland Township.

In May 2002, the three-member Venango County Board of Assessment Appeals turned down a request by Handsome Lake, part of Constellation power of Baltimore, to lower its assessed valuation of $28,086,970 on the gas-fired generating plant.

The assessment figure includes $1,487,000 for the 50.5 acres of land and $26,599,970 for buildings.

In appealing the issue to the county court, Handsome Lake's legal counsel, Kirkpatrick & Lockhart, argued the refusal by appeals panel members Arch Newton, Maurice Stiglitz and Barbara McGarvey to lower the $28 million figure was "arbitrary and capricious" and warranted further examination by the court.

In arguing for a lower assessment figure, Handsome Lake officials said it cost $103 million to build and equip the Rockland plant. The actual value for tax purposes should not include equipment and furnishings, the company argued.

The bulk of the cost - $70 million - included Pratt & Witney power generating engines and labor costs to install machinery.

What should have been properly taxed, insisted the power company, are land costs, site preparation, buildings to house the turbines and generator, a control building, enclosures and minor miscellaneous costs. Based on that claim, the actual assessed value of the property should be between $8.5 and $10.5 million, the company said.

In the appeal, Kirkpatrick & Lockhart contends the $28 million assessment is "prejudicial and discriminatory" and does not conform to property assessments in Rockland Township or anywhere else in Venango County. The figure should be scrapped because "the assessment is improper, inequitable, unjust, unfair and unlawful," the law firm says.

At $28 million, the plant would generate annual property taxes of $348,278 for the Cranberry school district, $143,805 for the county and $29,013 for the township.

In preparation for the legal battle, the county has hired Coyle, Lynch and Co. of Sharon Hill to serve as an appraisal consultant. The company will assist the county in the appeal proceedings.

The July court hearing is not confined to simply maintaining or cutting the $28 million assessment figure, Thompson said.

"The law allows it to go up as well as go down. We're talking a lot of money here but we are optimistic that we will get a favorable result or negotiate a settlement," Thompson said.

Handsome Lake has paid the face value of all taxes, at the $28 million assessment rate, for 2002 and for part of 2001, the year the plant was constructed. That tax income has been kept in escrow until the court issue is settled.

Study begins for proposed energy plant in Clarion area

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CLARION - Researchers said Monday a proposed new energy generation plant in the Clarion area would benefit wood suppliers as well as consumers of the produced energy.

Achim Loewen, director of the Fraunhofer USA Center for Energy and Environment in Pittsburgh, said a study to determine the feasibility of the project is in the early stages.

The center plans to investigate the possibilities of energy generation based on gasification of residual wood in the Clarion community and surrounding area.

Loewen said the findings of the assessment will result in a basic concept for an energy generation plant that is both economically feasible and environmentally friendly.

Gasification is high temperature conversion of solid fuels into flammable gas.

Uses of produced gas include direct heating of dryers, furnaces and kilns, hot water and steam generation, and electricity generation (gas motor, gas turbine and fuel cell).

Fraunhofer is partnering with the University of Pittsburgh and the Fraunhofer Institute for Environmental, Safety and Energy Technology.

It is also receiving funding from the state DEP to research the plan.

"We think this technology is better than existing plants," Loewen said.

If it is determined the project is economically feasible, the director said, it would be the first such plant in Pennsylvania.

There are other gasification plants operating in the United States, he said, and cited one in Vermont as an example.

Loewen said Fraunhofer has held a preliminary meeting in Meadville concerning a general energy supply concept that is similar to the gasification project. He said they have visited some potential sites for that plan.

At this time, no potential locations in Clarion County have been found, the director said.

Officials said they are looking at the Clarion area for several reasons.

The community has shown an interest in energy generation from renewables and there is support for the plan from the Piney Creek power plant, Loewen said.

He also said residual wood is available in the region and there are possible consumers for produced energy.

Loewen said the plant would not use treated wood, and the goal is not to cut the Allegheny National Forest.

Fuels suitable for the project include sawdust and chips, wood pellets, bark and hemp.

A visitor at the meeting said there are concerns the plant would begin burning treated wood at some point.

Loewen said the plant would be designed for clean wood only, and treated wood would damage the motor.

The director responded to another man's suggestion that the use of fuel cells would be a better alternative for the plant.

Loewen said the proposed gasification plant is based on economic feasibility.

Fuels cells are very expensive, he said, and it could take 10 to 20 years to develop that type of project.

Officials say establishing the proposed energy plant could take two years or more.

No specific information regarding the size or cost of the plant was discussed.

"The study will give all the answers," Loewen said.

The first phase of the project involves collecting general data such as energy prices and price structures, availability and prices of pulpwood, transportation costs, funding opportunities and tax incentives.

Another man at the meeting asked the director about studies claiming the state's forest growth is declining.

Richard Wiles, an aide for U.S. Congressman John Peterson, disputed the information and said he has seen studies saying the forests are undercut.

He then spoke out against the county's "small faction of extreme environmentalists" who are for "zero cut" in the forests.

Wiles said Peterson is particularly interested in seeing the plan move forward as a potential boost to the economy after the International Paper mill closed in Erie.

Loewen said the study will take about six months to complete.

It will then be placed on the DEP's Web site.

Ecological benefits of gasification compared to conventional combustion were identified as using unused residual wood resources due to economic advantages, lower emissions and higher efficiency.

Such a plant could significantly reduce the energy consumer's operational costs, researchers say. Also, by replacing fossil fuels, the demand for foreign imported fossil fuels would be decreased and greenhouse gas emissions would be reduced.

Fraunhofer is a non-profit research center located at the University of Pittsburgh that develops concepts and technologies for the economic and environmentally beneficial energy generation from renewables.