DIMINISHING PRODUCTION AND ANTICIPATED MARCH 1ST CLOSURE OF LOCAL HUNTLEY POWER PLANT HAS FORCED TOWN & SCHOOL DISTRICT – WHICH RELY ON TAX REVENUE FROM THE PLANT – TO CONSIDER ADDITIONAL TEACHER LAYOFFS, SCHOOL CLOSINGS & CUTS TO PUBLIC SERVICES
Huntley Generating Station Plant Has Been An Economic Anchor in Tonawanda For Years, But Decreased Demand & Increased Coal Costs Have Slashed The Plant’s Output – The Town Has Lost Nearly 50% Of The Plant’s Tax Revenue, Forcing Tonawanda To Consider Cuts to Services & Threatening Further School Closings in Ken-Ton School District; NRG Recently Submitted a Plan to Fully Retire the Plant as of March 2016
Schumer & Higgins Urged Feds To Green Light Funds That Would Allow Town To Develop Long-Term Economic Plan To Better Ensure Regional Financial Stability And Protect Jobs
Schumer, Higgins: Funds Will Allow Tonawanda To Craft a Plan to Secure Tonawanda’s Financial Future
Washington, D.C. – February 18, 2016 – (RealEstateRama) — U.S. Senator Charles E. Schumer and U.S. Representative Brian Higgins today announced, following their push, they have secured federal funding through the Economic Development Administration’s (EDA) Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative for the Town of Tonawanda. This funding will allow the town, in conjunction with University of Buffalo’s Regional Institute (UBRI), to develop a long-term plan to address the Huntley Station’s slowdown in production, and impending closure. Schumer and Higgins explained that the coal-fired power Huntley plant in Tonawanda has continually diminished its output over the years due to increased coal costs and decreased demand. As a result, the town’s tax base has taken a major hit in recent years. Therefore, Schumer and Higgins said UBRI began looking into ways to partner with the federal government to begin a plan for economic transition in the Town of Tonawanda. Schumer and Higgins said this funding through the EDA POWER Initiative will provide the ideal opportunity for the town to generate alternative funding sources and job opportunities, and to begin implementing a course of action.
“What Tonawanda needs now is a comprehensive economic plan to determine its future – and this significant federal Economic Development Agency investment will allow the Town to do just that. At a time of painful transition following the Huntley Plants losing, we must find a way to ensure Tonawanda has a strong financial standing for generations to come,” said Schumer.
“The loss of Huntley Plant tax revenue is leaving a huge hole in the Town of Tonawanda and Ken-Ton School budgets, raising serious concerns about the ability to maintain a level of service that residents, parents, teachers and students deserve,” said Congressman Higgins. “The Town has done an incredible job doing more with less in recent years, but a complete shutdown is economically devastating. This federal funding will help to develop creative strategies that can help minimize the impact of this loss.”
The Huntley Generating Station has remained operational in Erie County for nearly 100 years. Throughout that time it has remained a staple along the shoreline of the Niagara River. For years, coal served a suitable form of energy but increasing production costs and low natural gas prices have paved the way for alternative energy sources. However, the Huntley plant’s diminished operations has led to a loss of revenue, and by extension decreased tax revenue, for Tonawanda. This has produced broader negative impacts for the community and a comprehensive analysis of the Huntley Station’s local and regional impacts will help determine solutions and opportunities to support the long-term economic future of Tonawanda and the Western New York region. While it still serves as a source of employment for 75 local workers, the workforce has been reduced significantly over time, and NRG recently announced a plan to retire the plant as of March 2016.
Schumer and Higgins said the high cost of coal production and decreasing energy demands has forced the Huntley Generating Station to reduce their operations and workforce. A 2014 report by the Institute for Energy Economics and Financial Analysis found that the Huntley plant was losing $3 million annually due to decreased coal consumption. Although the plant was paying over $4 million in taxes to the Town of Tonawanda in 2009, it was placed on a Payment in Lieu of Taxes program in 2012 and revenues to the Town reduced to $2,246,256. Between Payments in Lieu of Taxes and tax revenue, the plant now pays about $6.1 million total to the county, town and school district, down from $13 million in 2003. In order to account for the loss in revenue, the Town of Tonawanda and the Ken-Ton School District have been forced to make a number of difficult financial decisions, such as laying off 133 teachers in recent years, and making substantial cuts to the Town Budget.
Schumer and Higgins said that, in light of these cuts and the announced plan to possibly retire the plant, a comprehensive economic development plan should be initiated for Tonawanda. UBRI requested EDA funding to prepare a comprehensive analysis of the Huntley plant’s future in Tonawanda. UBRI has consulted with the Clean Air Coalition of Western New York, Western New York Area Labor Federation, the Town of Tonawanda and other regional partners in their application for federal funding. This study would allow regional and local officials to determine the plant’s future. Schumer and Higgins said this study will not signal the end of the plant, but rather provide a clearer picture of how the town would need to revise future budgets to account for diminished tax revenues from the plant. Schumer and Higgins said the study will also address the future employment and job security of the 75 workers currently employed by the plant.
The funding will be distributed through the EDA’s Partnerships for Opportunity and Workforce and Economic Revitalization Initiative, which seeks to fund economic development planning projects. The initiative seeks to grant funding to a wide range of local economic development leaders, such as local governments, regional planning organizations, workforce agencies, and leading research and education institutions.
A copy of Senator Schumer’s initial letter to the EDA appears below:
Dear Assistant Secretary Williams:
I write today in support of the University at Buffalo Regional Institute’s (UBRI) application for funding through the 2015 Economic Development Administration’s Power Plus Plan. UBRI is applying on behalf of a range of regional and local partners committed to sustainable and comprehensive economic development planning. This project is also supported by the Kenmore Teachers Association, the Clean Air Coalition of Western New York, the Area Labor Federation of Western New York, and the Town of Tonawanda.
Understanding the particular impacts and potential strategies to address continuing diminished output at the Huntley Generating Station coal-fired power plant will be critical to planning for Tonawanda’s economic future. The Town of Tonawanda and the Ken-Ton School District have relied on the tax revenue from the Huntley coal plant for decades. As the plant’s output has decreased, there have been major impacts on the local school district. As of 2009, the plant was paying over $4 million in taxes to the Town of Tonawanda, but was placed on a Payment in Lieu of Taxes program in 2012, reducing tax revenues to $2,246,256. Between Payments in Lieu of Taxes, and tax revenue to the county, town and school district, the plant now pays about $6.1 million, down from $13 million in 2003. Due to this reduction, the district has been forced to lay off 133 talented teachers, and to make tough financial decisions. Last year, the district was forced to close two schools, and many non-mandated services, such as art and athletics, are now at risk. The Town of Tonawanda has also faced reduced revenues.
As operations decrease, so does the workforce at the plant. The workforce has been reduced over the past few years, but 75 workers still support their families working at Huntley. These are good-paying, union jobs, and these workers who lose their jobs due to decreased operations need and deserve a plan to ensure that after years of service to one employer, they will be able to find work.
It is vital that the community, in partnership with the federal government, begin to plan for a transition. I am a firm believer in community-driven planning and am confident that given the University at Buffalo Regional Institute’s strong economic development expertise and community ties make them the right partners to lead this initiative. The community needs a strong economic development plan to compensate for the lost jobs and tax revenue, and I wholeheartedly support UBRI’s application.
Sincerely,
Charles E. Schumer
United States Senator
