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Ogdensburg will collect $655,629 in back taxes from cogeneration plant in deal that forgives $98,000 in interest

Posted 10/27/15

By JIMMY LAWTON OGDENSBURG -- Ogdensburg will receive a total of $655,629 in back taxes thanks to a deal stuck with Alliance Energy in which the city will forgive $97,862 in interest payments from …

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Ogdensburg will collect $655,629 in back taxes from cogeneration plant in deal that forgives $98,000 in interest

Posted

By JIMMY LAWTON

OGDENSBURG -- Ogdensburg will receive a total of $655,629 in back taxes thanks to a deal stuck with Alliance Energy in which the city will forgive $97,862 in interest payments from the struggling operator of the cogeneration plant.

The plant provides heat to Ogdensburg Correctional Facility and the St. Lawrence Psychiatric Center via steam. It formerly produced electricity using natural gas, but removed the generation turbines in 2007. That decision was made with hopes of converting the plant to biofuel, but those plans never came to fruition.

According to documents provided by City Manager John Pinkerton the company owes the city more than $655,629 in back taxes and an additional $97,862 in interest. In an agreement approved by city council Monday, Pinkerton was given the authority to waive the interest fees in exchange for payment of the back taxes.

Alliance Energy Vice President of Alliance Energy Group Greg Sharland indicated that the taxes would be made whole in approximately two weeks.

Pinkerton said the forgiveness is only legal if it can benefit the City of Ogdensburg. He says this deal will allow the city to recoup the back taxes, will create jobs and ensure that the Ogdensburg Psychiatric Center and Ogdensburg prison will continue to have heat.

Sharland says company will reinstall its gas turbines and begin generating power again. He said this will create temporary construction jobs and eventually lead to eight permanent high paying jobs once the turbines are reinstalled.

The company has struggled to make good on it's 25-year contract with the state, but has responded to a request from information with the intent of acquiring a new contract with the state in 2018.

Pinkerton said the company was losing as much as $2 million per year since 2007 when the decision to remove the gas turbines was made.

Sharland said despite the losses the company was able to provide heat as required under the contract.

Sharland said the company is ready move forward and reinvest in the cogeneration plant and is hopeful it can acquire a new contract with the state

The resolution regarding the deal was not included on the agenda.