Plant Washington financing questioned

A study released Tuesday by opponents of a new coal-fired power plant in Washington County questions the economic benefits and risks taxpayers might face if the plant is built.

A coalition of electric cooperatives called Power4Georgians has proposed building the 850-megawatt Plant Washington, which would produce 130 permanent jobs north of Sandersville.

The new evaluation of the possible financial impact was conducted by the Ochs Center for Metropolitan Studies at the request of residents and the advocacy group Georgians for Smart Energy, which opposes the plant for environmental reasons.

“We’re not taking a position against Plant Washington, but we’re providing a bright flashing light to caution taxpayers and local governments,” said David Eichenthal, who wrote the report for the Ochs Center, based in Chattanooga, Tenn.

Officials with Power4Georgians and the Development Authority of Washington County say the study is based on faulty assumptions.

“It’s pretty bad policy analysis,” said Dean Alford, whose company Allied Energy Services is developing Plant Washington. “They’re wrong. They don’t know what they’re talking about.”

The Ochs report questions whether county taxpayers would be held responsible for new infrastructure for the plant, as well as possible revenue bonds to help finance infrastructure or plant construction.

It notes that last year the state Legislature created a Washington County Public Facilities Authority, which has the power to borrow money and issue revenue bonds. Eichenthal suggested Tuesday that this authority was formed to help finance Plant Washington using public tax money, without a vote from taxpayers.

However, Theo McDonald, executive director of the public facilities authority, said the authority was created only to help fund the Board of Regents shared service center planned for the county.

The authority is now issuing the bonds for the center and probably will become dormant afterward, McDonald said. It will “absolutely not” be used to finance privately funded projects such as Plant Washington, said McDonald.

But Lisa Hamilton, an attorney specializing in public financing who coordinated with the Ochs Center, said the law seems to allow this. It also permits the authority to use “more exotic, riskier financial deals” than other such authorities in Georgia, she said.

The Ochs Center report accurately points out that Washington County and local cities have become directly involved in financing other new industrial projects.

“This is yet another opportunity for real risks to be passed along to the taxpayers,” Eichenthal said.

McDonald, who is also executive director of the Development Authority of Washington County and president of the chamber of commerce, said the county guaranteed revenue bonds for three companies: Trojan Battery, Zorlu Linen and Bennett Building Systems. (He said Trojan Battery has created only a couple of jobs instead of the 150 projected but continues to pay rent to cover the bond payments.)

With a $2.1 billion price tag, Plant Washington won’t receive that kind of financing, McDonald said.

The Ochs Center report questions whether the county might end up paying big bucks for infrastructure for the plant, but McDonald and Alford say no new water or sewer service is needed.

Alford said the company will pay for a new road and any road improvements needed. McDonald said Power4Georgians has agreed to this in writing.

Tuesday’s report evaluated a 2008 Georgia Tech study that had been requested by the Washington County Chamber of Commerce. That study showed the county providing $66 million in tax abatements over six years. In his report, Eichenthal pointed out that this would amount to more than half a million dollars in tax abatements per permanent job.

McDonald said the Georgia Tech analysis was preliminary and based on his own estimates, which have since been refined. The authority is considering an abatement of 37 percent over a 20-year period, which is the same deal it gave two natural gas plants already located in the county, McDonald said.

“We don’t expect any special treatment,” Alford said. “There’s nothing different in this than any previous projects.”

McDonald estimated the value of such a Plant Washington abatement at about $57 million over 20 years but said local governments would recover more than $97 million in return based on the company’s taxable property and equipment.

As part of the abatement, Power4Georgians would purchase bonds issued by the development authority. Alford said the company would use the bonds as collateral to finance the plant.

McDonald said any abatement agreement would specify that the authority would not be liable for the bonds if the Plant Washington project failed.

“It does not put the development authority at any risk whatsoever,” he said.

Some Washington County residents have repeatedly claimed they can’t get information about financing and ownership of the project.

Katherine Cummings, president of Fall Line Alliance for Clean Energy, said the Washington County Commission required her to submit her questions in writing a month ago but hasn’t responded.

Tommy Walker, chairman of the Washington County Commission, could not be reached for comment Tuesday. Lee Lord, county administrator, said he hasn’t been involved in the Plant Washington negotiations.

Information from The Telegraph’s archives was included in this report.

To contact writer S. Heather Duncan, call 744-4225.