Local leaders who have long bet on coal are preparing to double-down on the natural resource, hoping that drying up rainy-day funds will get them through a tough patch in the industry that’s pushed the county’s largest taxpayer to the brink of extinction.
Many have been preparing for the next step on the AES Somerset plant upon hearing that the company was filing for bankruptcy.
Members from the Town of Somerset, the Barker School District and Niagara County will all meet with members of the county’s IDA on Wednesday to discuss plans for the plant.
This isn’t a new scenario, as the groups have been through multiple negotiations before, but this one presents a different twist.
The bondholders who are expected to assume control of the plant next week have yet to close on the plant and they need a new PILOT (payment in lieu of taxes) agreement to do so.
Town of Somerset Supervisor Dan Engert said he was part of a group that met with the plant’s leadership last week and no qualified bidders have come forward to buy the plant.
Engert admits there are no factions looking to squeeze money out of the plant now, as many just hope it can survive.
“There was a side before that would say, they’re making all kinds of money, and there’d be a discussion about the value. But that’s not been part of our discussion at this point,” he said. “The school, the town, the county all recognize that this is a worst case scenario.”
According to officials, the purchase agreement will be acted on by the court later this week.
Next week is when the group needs to have an agreement on what the value of the plant is. Engert said that means plenty of nervous waiting.
Officials for AES have said this is part of a cycle that’s keeping the coal industry down, but they don’t expect it to last more than a few years.
“We’re going to approach this from the perspective that we’re going to give everything we can for two years,” Engert said. “We’re going to tighten, tighten, tighten for two years, and use reserves that were taken in for this very reason. And we’re going to try to weather it.
“Hopefully, on the end of that two-year cycle, an energy company will purchase the plant and the value goes up.”
AES is the county’s largest taxpayer,