Municipalities, counties and other governmental entities that host a privately owned nuclear electric generating station face a host of unique challenges and opportunities. In some ways the interface between the nuclear facility and the host is similar to the interface between the governmental entity and other manufacturing facilities located within its boundaries. But in many ways, the interface presents issues that are technical, complex and unique to the nuclear generating facility.
Many of these issues were dealt with and resolved decades ago when these plants were first put in service. However, now that the plants are applying for license extensions, and investing heavily in capital upgrades and additions, all of these issues are resurfacing, often in a much different environment.
Issues that host governments need to resolve include valuing these facilities for real estate tax purposes, negotiating tax settlements with generating plant owners, restructuring emergency plans to meet changing needs, developing proposals for modification and replacement of existing EOCs and other complex matters involving a mature and ever-evolving relationship with the generation owner.
Plant license extensions raise significant property tax issues. New valuations depend, in large measure, on an understanding of alternative valuation methodologies, all of which require a detailed understanding of capital additions and retirements, fuel costs, operating characteristics and capacity factors, and spent fuel storage, among others. In some situations, an accurate evaluation of the plant can be established only through an understanding of the market for the sale of power, energy pricing, and plant cost structures and margins both today and in the future.
Plant life extensions also stress government-provided infrastructure supporting the plant. Questions involving transportation, utilities, emergency preparedness, police and security support, and participation in the broader state and federal emergency planning process all need to be addressed.
Finally, a license extension provides the opportunity, and perhaps the obligation, for the host governmental entity to participate in the federal license extension process at the NRC. The process is lengthy and involves complex issues and multiple parties, many of whom will either strongly support or strongly oppose the plant and all of whom will be looking for local governmental support and encouragement.
Knowledgeable legal counsel who understand the unique relationship between the host governmental entity and the nuclear electric generating station can be essential for municipalities to best handle these sometimes daunting challenges in a way that maintains, and even improves, their relationship.
Experienced, sensitive and sophisticated counsel with knowledge of the political process and awareness of how to work with it at the federal and state levels are vital to reaching the successful outcome sought by host governments.
If you have any questions about this Alert or would like more information, please contact Charles W. Whitney, Sheila Slocum Hollis, any other member of the Energy Law Practice Group or the attorney in the firm with whom you are regularly in contact.
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