By James Walsh
Published: 2:00 AM - 06/13/14
NEW WINDSOR — The Orange County Industrial Development Agency approved millions in tax incentives Thursday for a proposed natural gas-fired power plant off Route 6 in the Town of Wawayanda.
The IDA board, without discussion, unanimously agreed to phase in property taxes on Competitive Power Venture's plant over 22 years. The company is expected to pay $46.4 million over that period. The company also received exemptions from up to $7.5 million worth of sales and use taxes. Construction costs are estimated at $900 million.
The project site is in the Minisink Valley School District.
No specific relief from mortgage tax was granted, because the amount to be mortgaged was unknown.
CPV has all major permits needed to build the 650-megawatt Valley Energy Center off Route 6 in the Town of Wawayanda. It still needs the state to decide if it will award the company a long-term contract through the Energy Highway, an initiative intended to modernize the energy system. The company needs the state to buy energy over a number of years for the plant to be viable.
"Now it's up to the governor," IDA Chairman Robert Armistead said after the vote.
Electricity bills rising
IDA approval comes at a time when the creation of a new energy capacity zone extending from New York City into the Hudson Valley has raised electricity bills by about 5 percent in Orange and Rockland Utilities' territory and nearly 6 percent for residential customers of Central Hudson Gas and Electric. Industrial users face increases up to 10 percent.
The capacity zone is intended to spur energy development in the region.
"The market's sending all the right signals that a plant should be built in the Hudson Valley," CPV Vice President Steve Remillard said after the meeting.
In a May 20 letter to the IDA board, Executive Director James Petro said that terms of the proposed tax-incentive agreement deviate from the agency's usual policy for a 10- or 15-year tax-abatement period. He cited the nearly $1 billion capital investment as a reason for supporting the longer pact, as well as the economic benefit of developing vacant land. The project will create up to 400 construction jobs and about two dozen permanent ones.