Letter: Telling the 'Truth' About the Oxford Power Plant Tax Referendum

To the Editor

THE TRUTH ABOUT OXFORD’S FEBRUARY 11TH 2016 REFERENDUM VOTE

While gathering petition signatures to send the NEW Towantic tax stabilization agreements to referendum on February 11th, I was frequently asked the question; “What are we voting for?”.

To help residents and neighbors answer that question, I am providing answers in a Q & A format.

Q. Specifically, what are we voting on at the February 11th, referendum?

A. We are voting to approve a NEW Tax Stabilization Agreement, NEW Development Agreement and NEW Community Development Agreement so the new, approved agreements can REPLACE the EXISTING VALID AGREEMENTS that have been maintained and amended for the last 15 years.

Q. Why are we voting these agreements at a town referendum?

A. Because the town charter requires the “governing body” to ratify agreements negotiated by the Board of Selectmen before they can be signed and made legally binding.

Q. What is the value of the NEW Tax Stabilization Agreement to the Town of Oxford?

A. The New Tax Stabilization Agreement will pay $112.2 million in installments over the next 22.5 years. The installment schedule is available on page 11 of the document linked below. http://www.oxford‐ct.gov/sites/oxfordct/files/file/file/tax_stable_dec_16.pdf

Q. What will happen if the NEW agreements are not ratified by the referendum – i.e. a No vote prevails.

A. The existing agreements dating back to 1999 as amended from time to time in 2004, 2007, and 2009 etc., will continue to define the relationship and define the payments Towantic will make to the town.

Q. What is the value of the old agreements to the town?

A. The existing agreements will pay $56.5 million for the next 20 years.

Q. How does the NEW Tax Stabilization Agreement compare with the OLD agreement?

A. The NEW agreement pays $1.175 million in January 2016, $5.8 million on the implementation date in March/April 2016, $2.550 million in 2017, $2.7 in 2018, $2.95 in 2019, and $3.050, increasing periodically. The NEW agreements return a premium payment over the existing agreements beginning with +$800,000 on the implementation date in March/April 2016, +$200,000 in 2017, +$350,000 in 2018, and $600,000 in 2018 increasing periodically for 22.5 years.

Q. The Towantic Plant appears to have started construction. WILL A NO VOTE STOP IT?

A. VOTING “NO” WILL NOT STOP THE TOWANTIC PROJECT, period, end of story. The project is fully permitted by all regulatory agencies. Connecticut Siting Council has issued a certificate and approved the Development and Management Plan, DEEP has approved the Air Permits and issued Storm Water Management Permits, the FAA has approved all obstacles and stated in its approval that exhaust plumes are not obstacles or dangers to aviation, Heritage Water has issued a contract to provide water to the plant and the Naugatuck and Oxford WPCAs have issued sewer permits.

Construction has started with site work to prepare storm water management and prepare the site for foundations. Parking and laydown areas on town property are being completed as previously planned and approved by town commissions. Even the local opponents’ lawsuit has been dismissed as incomplete and inadequate by the Superior Court on January 12, 2016. Since 1999, Towantic has prevailed in four legal challenges – opponents are zero for four in the legal arena.

Q. Some local opponents are recommending a No vote to send a “symbolic message” to that we don’t

want their plant in Oxford. Will Towantic stop development if a No Vote prevails?

A. CPV is investing $300 million in owners cost for planning, engineering, permitting, financing and legal fees plus $700,000 million more to buy equipment and labor for construction. IT IS BEYOND NAIVE to think that CPV would abandon their investment in Towantic because a few local naysayers expressed their dislike for them. If a No vote prevailed because our naysayers want to “send a symbolic message”, that message would cost CURRENT AND FUTURE RESIDENTS $55,7 MILLION IN FUTURE TOWN REVENUE.

Q. Local Opponents are claiming that the Tax Stabilization Agreement is not providing adequate compensation for the town. Will a No vote cause the town administration to declare the existing agreements invalid or try to negotiate higher compensation in a replacement agreement?

A. I am not part of the town administration, so I really can’t answer that question, however, I can speculate that if either of those options were selected, the lawsuit would fail based on the following

1) CPV is not responsible for the town’s inability to ratify agreements negotiated by Selectman.

2) CPV can prove that they negotiated in good faith with our town executives.

3) During those negotiations, the town doubled revenue from $56.5 million to $112.2 million based on a 47% percent increase in Towantic capacity.

4) Oxford’s payments per megawatt are more than any other existing fossil fuel energy center in Connecticut

5) Based on the negotiated outcomes, it would appear that the Town negotiated a fair deal and has no reason to sue for more.

Herman Schuler

Chairman Securing Oxford’s Financial Future and former Oxford Economic Development Director