Judge to sort out $457 million dispute over nuclear plant

The courts may have to resolve a tax dispute over the Kewaunee Power Station, which hasn’t generated a kilowatt of power in two years and is now being dismantled.

To Dominion Resources Inc., its plant is all but worthless. But to Carlton, Wisconsin, the Lake Michigan town where the plant pumped out electricity for four decades, it’s still worth $457 million. Those views put the two sides nearly half a billion dollars apart in valuing the facility for tax purposes, the Milwaukee Journal Sentinel reported this weekend.

Dominion sued the town last month, seeking a refund of taxes it expects to pay later this year. A victory for the company eventually could lead to higher local property taxes. Absent a settlement, a Kewaunee County circuit judge will have to sort it all out.

Amie Trupke, the town’s lawyer, acknowledged that the property is difficult to value. But she said the town made a valid effort to determine the value of both the land and the structures on it.

“The town did its duty by going out and obtaining an appraisal for the real property and the personal property from experts in the field,” she said, adding that the town has not seen the appraisal commissioned by Dominion that puts the value at zero.

Losing the nuclear plant is already creating challenges for the area, including the loss of hundreds of jobs. And it’s hitting local governments and school districts in another way. While the plant never paid property taxes, it helped fund local governments and schools through a utility fee that was based on how much power it generated. With the shutdown, those fees are being phased out, so local governments want to start collecting property taxes instead.

Town officials have expressed frustration that the site can’t be redeveloped until it changes hands. Dominion has up to 60 years to restore the site under federal nuclear regulations. Adding to the frustration is that the used nuclear fuel that powered the reactor remains on the site in concrete casks. Since there is no national disposal site for spent nuclear fuel, the lakefront property will continue to store the fuel indefinitely.

Similar situations are playing out at shuttered nuclear plants elsewhere. For instance, in Zion, Illinois, property tax payments dropped 55 percent when an Exelon Corp. reactor closed in the late 1990s. Earlier this year, legislation was proposed in Illinois to assess an “impact fee” for communities required to store nuclear waste.