VEAZIE — A representative from the Casco Bay Energy Co., which is gearing up to build a $195 million power plant here, came before the Town Council on Monday night with a proposal to create a tax-increment financing district that would help the town reduce and stabilize its property tax rate, and ensure the project remains competitive enough to become a reality.
During a meeting with town councilors, Casco Bay President Chris Herter outlined some of the competitive pressures that the Brunswick-based company faces in its effort to build a state-of-the-art natural gas-powered electric-generating plant.
The deregulation of Maine’s electric utilities is expected to change forever the way electricity is made and sold here, the company observed in a written proposal prepared by one of its consultants, Governmental Services.
The state’s traditional power companies, which have had to contend with escalating overhead costs, are making the shift from producers to distributors. The producers poised to take their place will have to make power at costs that are attractive to consumers, who soon will be able to buy their power in a competitive market.
Casco Bay’s proposed Maine Independence Station is one of the first major projects in this area that hopes to tap into the proposed Maritimes & Northeast natural gas pipeline. The pipeline is expected to be completed in late 1999. If all goes according to plan, the Veazie plant will go on line around April 2000.
But time is of the essence, Herter told town officials Monday night. When Casco Bay first unveiled its project proposal at a public meeting in September, it was among two or three such plants planned for Maine.
The field of competition has since grown to at least eight plants. Gas-fired plants have been proposed for Jay, Rumford, Wiscasset, Gorham and Westbrook, with Yarmouth being eyed by two developers.
In his meeting with town officials, Herter discussed Casco Bay’s request to create a TIF district on a 50-acre portion of Graham Station, a Bangor Hydro-Electric Co. holding which houses an obsolete oil-fired power-generating facility.
Casco Bay has chosen Bangor Hydro-Electric Co.’s Graham Station in Veazie as the home for its power plant. The Brunswick-based company is in the process of applying for the state and federal environmental permits and licenses it needs.
Among the reasons the Veazie site was chosen are its more than 40-year history of housing an oil-fired generation station, its proximity to the gas pipeline, and its good access to the New England Power Pool.
Tax-increment financing districts, which exist in more than 50 Maine communities, are partnerships between communities and developers.
TIF districts, subject to both local and state approval, also enable municipalities to shelter new tax revenues, thereby preventing the new value from reducing the community’s levels of school funding and municipal revenue sharing, or increasing its county tax bill.
According to Herter, a TIF district would keep Casco Bay competitive and would provide predictable tax payments.
It would benefit the town, he said, by reducing and stabilizing the tax rate over its 22-year lifespan, by helping the town pay for public safety upgrades and new access road that would open additional land to economic development, and by giving developers an incentive to continue investing in the plant, among other things.