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Decades old contract means $1.5 M deficit tomorrow

18 percent tax hike would make up for expiration of Selkirk Cogen agreement

The Selkirk Cogeneration natural gas plant.

The Selkirk Cogeneration natural gas plant. Photo by Spotlight Staff.

— The Town of Bethlehem is facing at least a $1.5 million loss of revenue in the coming year when the Selkirk Cogen energy plant goes back on the tax rolls.

The Payment in Lieu of Taxes ( PILOT) agreement between the company and the town (as well as the Ravena Coeymans Selkirk School District) is set to expire in December. Town Comptroller Mike Cohen and Chris Kidera, co-chairperson of the Bethlehem Budget Work Team, presented information about the significant loss of revenue to the Town Board at its meeting on Wednesday, Feb. 22.

“It’s a very confusing issue with a lot of factors,” said Cohen in an interview after the meeting. “We’re still working on how to resolve this without asking the taxpayers to contribute a significant portion back to the town.”

Selkirk Cogen is a natural gas power plant that produces up to 345 megawatts of electricity to the General Electric plastics plant located at the same campus, and it also provides power back to National Grid.

Kidera said unlike current PILOT agreements, which are incentives negotiated through the town’s Industrial Development Agency to stimulate new business growth in the community, the Selkirk Cogen agreement was negotiated in 1992, before a uniform policy was established for such contracts.

The committee believes the contract was drawn up based on projected growth of Selkirk Cogen and lists specific amounts to be paid each year for the 20 years of the agreement. In 1993, the funds to be split between the town and the school district began at $350,000 and increased each year until the price reached $4.4 million in 2012.

Cohen said current PILOT agreements are different in that most are contracted to last between 10 and 12 years and payment is based on the company’s assessment.

“(The Cogen contract) is not based on evaluations of any factor based on reality,” said Cohen.

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