Calvert Cliffs to Make Up Funding

By Christy Goodman
Washington Post Staff Writer
Thursday, January 17, 2008

Calvert Cliffs Nuclear Power Plant has agreed to fill a hole of more than $6 million left by the Maryland General Assembly in Calvert County's fiscal 2009 budget.

The budget gap was the result of last fall's special session. The General Assembly cut a $6 million state grant the county has received since 1999, when state lawmakers approved deregulation of electric utilities. The grant was given to make up for county taxes the electric utility no longer had to pay after deregulation.

When it ended the grant, the General Assembly gave the county authority to tax the Calvert Cliffs plant or to arrange a payment in lieu of tax. The two entities agreed on the latter.

"This agreement, it certainly speaks to the strong working relationship [between Calvert Cliffs and Calvert County] and the value we put in each other's organizations," said Rob Gould, a spokesman for Constellation Energy, which owns the plant.

Gould said the hallmark of the agreement is the certainty it provides for county revenue and plant managers.

The 15-year agreement applies to the two reactors operating at Calvert Cliffs.

The power plant will pay the $6 million annually until a potential third reactor, which is still in discussions, is built, said Terry Shannon, the county's director of finance.

If the third reactor is built, the $6 million will be reduced because the county would receive personal property taxes levied on the new reactor.

"This keeps us at the status quo," Commissioner Gerald W. Clark (R-Lusby) said. "It is replacing the money the state took away."

The $6 million is in addition to various taxes the plant pays the county. In fiscal 2009, the plant is also slated to pay $13.6 million in personal property taxes, slightly less than $3 million in real property taxes and $830,000 in public utility taxes, for a total of $23.4 million.

Personal property taxes could be adjusted if the plant makes improvements that result in growth of 5 percent or more from its current electricity output, Shannon said.

"I'm thinking the first five years will not affect this [payment]. But beyond that, it depends on whether or not they construct the third reactor," Shannon said.

The agreement would prevent the county from having to lobby state lawmakers for the $6 million grant every year, Commissioners President Wilson H. Parran (D-Huntingtown) said. Parran said that he was glad Maryland gave the county the authority for the payment and that Constellation and county officials reached a consensus quickly.

Commissioner Linda L. Kelley (R-At Large) said she holds a grudge against the state for taking away the $8 million in local taxes the power plant paid the county before deregulation.

"I don't have to be a financial genius to know" Calvert County was shorted $2 million even with the grant, she said. Calvert County took the biggest revenue hit in the state after deregulation, she said.

The agreement takes effect in fiscal 2009, which starts July 1.


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