Higher court upholds ruling
The state Commonwealth Court affirmed Wednesday a Greene County court decision that ruled various parts of Allegheny Energy’s Hatfield’s Ferry Power Plant tax exempt because they are either obsolete or directly related to the production of electricity. The ruling was the latest in a string of court battles over the power station situated along the border between Fayette and Greene counties, in Monongahela Township.
The Greene County Board of Assessment Appeals initially appealed the order of the Greene County court that fixed the value of the power plant at $7.7 million, about 10 percent of earlier estimates of the plant’s value utilized by area municipalities for taxation purposes.
The fixed taxation figure was used for 2002-2004 for the county as well as the Southeastern Greene School District.
According to the opinion handed down by commonwealth President Judge James Colins Wednesday, the power plant’s smokestacks, cooling towers and water intake facility are excluded from taxation as machinery used in the generation of electricity.
The court also upheld earlier rulings that the plant’s obsolescence, determining that improvements to the facility did not constitute improvements, did not change because the plant would still be used as a power station.
The ruling comes less than a year after the state Supreme Court denied hearing an appeal of a 2003 Commonwealth Court decision that ruled certain parts of Allegheny Energy’s Hatfield Ferry Power Station exempt from real estate taxation.
In January, the county asked the Supreme Court to hear an appeal of the Commonwealth Court’s affirmation of Greene County Judge William Nalitz’s ruling in December that set the value of the power plant at $7.7 million for 2000 and $8.2 million for 2001.
The Greene County Board of Assessment Appeals and the Southeastern Greene School District initially appealed Nalitz’s 2002 order to the Commonwealth Court last year to attempt to raise the taxable value for the power plant.
The case stems from the increase to the local tax assessment for the electric power station for 2000, after the school district sought an increase from the county assessment board.
The school district took advantage of a change in the Public Utility Realty Tax Act, which allowed taxes to be paid to the county, municipality and school district in which a power plant resides.
After the countywide tax reassessment, the appeals board set the power station’s value at $79.5 million, up from the plant’s $2.75 million in market value before the reassessment.
Allegheny Energy appealed, and in January 2001, Nalitz set the power station’s market value at $27.9 million for 2000 and 29.1 million for 2001.
Nalitz’s ruling was appealed to Commonwealth Court, which affirmed part of it, rejected another and remanded the case back to the common pleas judge for further hearings regarding the taxable value of the smokestacks, cooling towers and the water intake facility.
Nalitz ruled, and the Commonwealth Court affirmed last December, that the smokestacks, cooling towers and water intake system are classified as machinery necessary for electricity production and, therefore, should be tax-exempt.
In 2004, the county and the school district both voted to end any further litigation pertaining to the power station, at the recommendation of the district solicitor.