Deregulation may hold weight in Claiborne tax take|[6/29/05]

Published 12:00 am Wednesday, June 29, 2005

PORT GIBSON – Claiborne County’s negotiating power for its share of taxes from a possible addition to Grand Gulf Nuclear Station may be affected by deregulation in the energy industry.

Where power from any second unit at Grand Gulf Nuclear Station will be sold will be a factor in determining how the tax structure for it will be decided, about 160 people were told by staff of the Nuclear Regulatory Commission.

About 15 members of the NRC staff were in Port Gibson Tuesday night for a public meeting on an application for an initial permit that has been filed by Grand Gulf’s operating company, Entergy Nuclear. If granted, the permit would represent to the NRC the resolution of environmental issues specific to the site.

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The topic of Tuesday’s meeting was a 717-page draft environmental-impact statement released by the commission in April. In response to questions about the potential economic impact of any new capacity, members of the team that prepared the document highlighted the part of it that discusses the potential impact of a new unit on the county’s economy.

A top member of the team that prepared the document said whether any new capacity would be operated as an unregulated “merchant” plant or as a facility regulated by the public service commissions of Mississippi and Louisiana may be a factor in determining how taxes collected from it would be divided.

“It could possibly be taxed as an ordinary industrial asset at the same rates,” said Dr. Charlie Brandt, a task leader of the NRC team. “It’s potentially a very large asset with potentially a very large tax yield to the local economy.”

Mississippi’s first and only nuclear-power plant has operated at Grand Gulf since 1985. Claiborne County initially received all $16 million of the state-set annual property tax on the operation.

The Legislature, in a move challenged in court but eventually upheld, changed the law to allocate half the revenue to Claiborne and spread the remainder among governments of more than 40 other counties served by Entergy in Mississippi.

The market for wholesale electricity was deregulated by the federal government in 1992. Today about one-third of the nation’s generating capacity is unregulated and most new power plants today are built as merchant facilities.

Grand Gulf’s top on-site executive, Entergy Nuclear vice president George Williams, did not describe in detail the company’s hopes for whether or how any new plant would be regulated. He said the company would not build a plant unless it made sense for its customers.

“When it makes sense for all those folks and our investors, that is when another unit will be built,” Williams said.

The NRC staff came to the meeting with the agency’s initial recommendation that it sees no reason to deny the requested permit on environmental grounds. The staff made that recommendation despite arguments from opponents that the Legislature’s tax split amounted to environmental racism because it reallocated revenue to governments the aggregate percentage of whose black population is lower than Claiborne County’s 84 percent.

A leading organizer of opposition to Entergy’s application, Paul Gunter of the Washington, D.C.-based Nuclear Information and Resource Service, repeated that argument and said opponents planned to take their dispute further.

Port Gibson Mayor Amelda Arnold and Claiborne Board of Supervisors President Charles Shorts and other local residents including David Bailey, Phil Segrest, Robert Gage and Douglas Nasif spoke in support of Entergy’s application, as did Entergy Mississippi president Carolyn Shanks.

To begin building a new unit Entergy Nuclear would have to ask for and receive a second major NRC permit, a combined construction and operating license. The earliest construction could begin would be 2010.

Construction has not been begun on a new nuclear plant in the United States since before 1979. Since then the federal government has streamlined the regulatory-approval process and offered financial incentives to encourage the construction of new nuclear capacity.

Tuesday’s hearing was held during a 75-day comment period on the draft environmental-impact statement. Written comments on it will be accepted until July 14.