Burn plant revenue forecast jumps $1.4 million, relief to taxpayers projected

HUDSON FALLS Notorious for inflicting financial pain on taxpayers, the Warren-Washington counties trash burn plant is now apparently paying back an unexpected pleasant dividend. Due primarily to boosted revenue from electricity generated and plant operational efficiency, the burn plant may be losing $1.4 million to $1.7 million less than budgeted this year by the two counties, area government officials said Wednesday. According to the contractual split in financial responsibility, Warren Countys budgetary savings is likely to be $1 million to $1.2 million this year alone, according to Warren County Board of Supervisors Chairman Fred Monroe. This is really excellent news, really outstanding for taxpayers, Monroe said. Hopefully this extra revenue will hold up through 2011. The primary source of the projected financial dividend is the same factor thats now crippling so many household budgets: the rising cost of fuel prices, according to trash burn plant financial analyst R. Stephen Lynch. Due to an agreement for the plant operation to sell electricity to National Grid at a price of avoided cost of generation, that amount has soared from about 6.5 cents per kilowatt hour to a projected price of 9.5 cents. The counties had budgeted for 7.5 cents per kilowatt hour, yielding $5.1 million projected revenue. This boosted price means the two counties are likely to earn $6.8 million from electricity sales in 2008 from burning trash, up from $4.3 million in 2007, Lynch said Wednesday. Some of the increased revenue, however, is likely to be offset by reduced income from less tonnage of trash arriving at the plant, Lynch said. When the economy slows down, so does the amount of trash produced, he said. The plants unexpectedly high operational efficiency so far this year, however, is expected to blunt this trash revenue shortfall, Lynch said. The plant has endured less downtime this year than expected. Monroe praised the plant operators, Wheelabrator LLC, for their continuing efforts to maximize efficiency. Also, the counties will be benefitting from boosted revenue from the sale of scrap metal salvaged from the plants ash output yielding $50,000 to $60,000 more than expected due to soaring international commodity prices and the cost of disposing the ash is remarkably less than was budgeted, Lynch said. According to Lynch, Warren County had budgeted $3.4 million for its share of the operating cost of the plant. If energy costs stay high, Warren Countys required financial contribution will drop to $2.2 million for fiscal year 2008. Washington countys share also will drop proportionately. Lynch said he expected electricity prices to stay at it's current level or increase. The total operating cost from 2007 was $4.3 million, with Warren County shouldering two-thirds of that total. This year, if the current trends continue, the total operating cost will be only $3.3 million. Washington County is likely to spend $1.1 million towards the plants operation, rather than the $1.5 million budgeted for 2008. In the 1990s, the counties lost as much as $5.5 million annually on the plant, and taxpayers were enraged. Renegotiation of the trash plant contracts in 2004 with the original plant operator which included re-sale of the plant to Wheelabrator LLC helped reduce the annual shortfall. But this latest rebate of $1.4 million to $1.7 million was unexpected and welcome, officials said. Warren County Budget Officer Kevin Geraghty said the new projections of savings at the burn plant was great news, considering the countys ongoing budget crunch. Warren County is on the right track, he said. I believe we are doing significantly better. He warned that the $1 million to $1.25 million dividend to Warren County should not sidetrack the county supervisors current cost-cutting measures. Windfalls are not an excuse to stop budgeting conservatively, Geraghty said. We have to focus on how to make government smaller and lessen the burden on the taxpayer. Warren County Supervisor Fred Champagne, an at-large representative of the Town of Queensbury, also expressed budgetary caution. I am not sure where the money will end up, said Champagne, who represents Warren County on a governmental committee that oversees the trash plant. Hopefully it goes back to the taxpayers in some form. He said that officials for both counties are now reassessing whether to buy the trash plant or not in 2011 when the county has a option to do so by contract with the operators, Wheelabrator, LLC. We are now assessing how to proceed after 2011, when the plant is paid for, Champagne said. Lynch noted that the trash plant may now be less of a financial burden but he predicted that it will always operate in the red. I doubt it will ever break even, but we are definitely doing better, he said. (Adirondack Journal Editor Thom Randall contributed to this report.)

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