Start Date
7-12-2017 1:00 PM
End Date
7-12-2017 2:00 PM
Description
An examination of recent decisions on valuation and assessment of electric power generators, including coal-fired plants, solar facilities, biomass co-generators, and hydroelectric plants. Coal-fired generators have argued for reductions in their valuations on the basis that coal-fired plants are economically obsolete and that the fair market value of the plants has declined significantly. Changes in environmental regulations could impact this argument. A solar generator in Arizona argued that plant costs should be reduced by the amount of grants and subsidies for solar installations. The owner of a Vermont hydroelectric plant argued for a reduced value based on the need to relicense in 2018. The Maryland Tax Court refused to reduce the value of a state-of-the-art coal-fired plant. Texas and Colorado have recent decisions reducing coal-fired plant valuations by more than half the value determined by the assessors. In Oregon, the Tax Court reduced the value of a biomass co-generation plant by almost half. In the Oregon and Texas cases the generators had long-term contracts for the sale of power, but the contracts were not considered in the valuation. If electric generators continue to move to more natural gas and renewable generation sources, local jurisdictions face uncertainty about their tax base.
Recommended Citation
Bradshaw, Sara M., "Valuation of generation plants in a changing world of power production" (2017). IAAO Annual Legal Seminar. 5.
https://researchexchange.iaao.org/legal/legal17/sessions/5
Valuation of generation plants in a changing world of power production
An examination of recent decisions on valuation and assessment of electric power generators, including coal-fired plants, solar facilities, biomass co-generators, and hydroelectric plants. Coal-fired generators have argued for reductions in their valuations on the basis that coal-fired plants are economically obsolete and that the fair market value of the plants has declined significantly. Changes in environmental regulations could impact this argument. A solar generator in Arizona argued that plant costs should be reduced by the amount of grants and subsidies for solar installations. The owner of a Vermont hydroelectric plant argued for a reduced value based on the need to relicense in 2018. The Maryland Tax Court refused to reduce the value of a state-of-the-art coal-fired plant. Texas and Colorado have recent decisions reducing coal-fired plant valuations by more than half the value determined by the assessors. In Oregon, the Tax Court reduced the value of a biomass co-generation plant by almost half. In the Oregon and Texas cases the generators had long-term contracts for the sale of power, but the contracts were not considered in the valuation. If electric generators continue to move to more natural gas and renewable generation sources, local jurisdictions face uncertainty about their tax base.
