MOSCOW, Ohio — Clermont County officials knew they would lose millions in future tax revenue when Vistra Corp. announced last year that it would close the William H. Zimmer coal plant in Moscow this May - five years early.
But that is just the beginning of the revenue loss that many Clermont communities, schools, and libraries could be facing this year.
Texas-based Vistra is challenging the county auditor’s $140 million property valuation of the plant and surrounding land, arguing that it is worth 80 percent less – or $28.5 million. A hearing is set before the Ohio Board of Tax Appeals in Columbus on July 26.
If Vistra wins its appeal, some public entities will be forced to repay the more than $4 million in tax revenue they received over the past two years. The village of Moscow, Monroe and Washington townships, New Richmond schools, county libraries, Grant Career Center, and Clermont County could be substantially impacted.
“It could be catastrophic for them,” said Deputy Clermont County Auditor Chris Mehlman.
While devaluation is possible, Mehlman said the burden of proof will be on Vistra at the July hearing to produce documents and testimony to show why their properties are worth far less than what Clermont County values them at.
“Vistra will continue to pursue all available legal and administrative remedies to ensure that the value of the Zimmer plant reflects a fair market value,” said Vistra spokesperson Jenny Lyons.
For decades Clermont County was flush with tax revenue from two coal power plants perched along the Ohio River. It paved roads, built new fire stations and schools, opened a community center, and replaced household septic tanks with municipally treated water.
But the last of that coal revenue is evaporating.
Duke Energy closed the former Walter C. Beckjord coal plant near New Richmond in 2014 and sold the 1400-acre site to Commercial Liability Partners four years later. CLP is now demolishing the plant.
When the Zimmer plant closes on May 31, it will be the sixth coal-burning power plant in the region to close since 2013. The trend is driven by the increasing cost of complying with air-pollution rules and cheaper energy sources like natural gas.
“What’s going to happen starting on June 1st of this year?” asked Dennis Cooper, chairman of the board of trustees in Washington Township, which gets 30 percent of its current revenue from Zimmer.
“The property is still going to be there, so there’s got to be some kind of tax on it. But I don’t know what it’s going to be,” Cooper said.
Zimmer is already worth far less than it was a few years ago, forcing communities to cope with far fewer tax dollars.
Zimmer’s devaluation has gradually reduced its property taxes from $11 million in 2015 to an estimated $5.2 million for 2021, according to data from the Clermont County auditor’s office.
That lost tax revenue has already forced deep cuts in Washington Township. Officials consolidated three fire stations into one centralized building, sold off the extra fire stations and cut the township’s workforce drastically since 2016.
“They’ve been devaluing (Zimmer) for the last three or four years,” Cooper told WCPO last year. “In three years, when you lose $700,000 to $800,000 out of your budget, you’ve got to start planning then. You can’t wait until the closure of the plant, that you know is going to come.”
The village of Moscow where Zimmer is located could eventually lose 90 percent of its revenue once the plant closes, Mayor Tim Suter told WCPO last year. The plant is the only economic driver for the village, which has 185 residents.
Village officials have already added new trash and wastewater treatment fees for residents.
“We’ve condensed our employees down as far as we can go,” Suter told WCPO in August. “We’re actually on an accelerated plan to do away with our employee health care and give them a stipend.”
With so much uncertainty, Clermont officials have many questions ahead of the plant’s planned closure in two months.
For example, Vistra may redevelop the site for renewable energy or battery storage. But Cooper said he doesn’t fully understand what that means.
Cooper also worries about what will happen to Zimmer’s landfill and the fate of other land that Vistra owns, some of it adjacent to township land.
“So, educate us on what your plan is,” Cooper said. “What are you going to do?”
Vistra officials have invited community leaders to a meeting in Washington Township on March 29. It will be the first time many locals will have a chance to ask questions since Vistra announced the plant closure.
“Contact with the parent company Vistra Energy has been nonexistent,” since then, Suter said.
One big question is the possibility of multi-year agreement with Clermont County and New Richmond schools that would reduce taxes gradually.
“In this case it would make sense to have kind of a stair step so that your local governments, especially the schools, wouldn’t take a real sudden hit,” Brad Watson, Vistra’s director of community affairs, told WCPO last July. “We care about our communities, and this is one way that we try to help them out.”
Vistra remains open to considering a multiyear agreement, but nothing is final yet, Lyons said.
In the meantime, Zimmer’s public utility personal property tax collections will also continue to decline as Zimmer stops operating as a generating plant.
“There was a $13.8 million reduction in the PUPP assessed value from tax year 2020 to tax year 2021. This reduction in value resulted in approximately a $135,000 reduction in the county’s share of tax collections from the Zimmer plant projected for this year,” Clermont County spokesman Mike Boehmer wrote in a statement to WCPO.
The state will release 2022 PUPP assessed values in October for calendar year 2023.
But the bigger question is what Zimmer’s real property will be valued at now, and in the future, with so many millions in taxes at stake.
Vistra short-paid its county 2020 property taxes by more than $1 million after filing its appeal and is now delinquent on those taxes, according to auditor’s data.
“Although Zimmer’s market value has been falling for several years as the plant struggled financially, there has been no corresponding drop in property tax value,” Watson told WCPO last July. “While Vistra is committed to pay its fair share of property taxes, the valuation of the Zimmer plant does not currently reflect fair market value … To that end, we will continue to pursue a fair valuation for the 2020 tax year and beyond.”
Vistra decided to close Zimmer after the plant was unable to sell electricity at a high enough rate to make a profit.
The closure announcement came four months after U.S. District Judge Susan Dlott approved a consent decree to settle more than a decade of pollution violations with the EPA at Zimmer.
The settlement called for Vistra to pay a civil penalty of $600,000 to the U.S. Justice Department and spend $45,000 on energy-efficient lighting at a nearby school.
Vistra also plans to close the Miami Fort power plant in North Bend by the end of 2027.
“Vistra's strategy is to responsibly and reliably grow our business through economically attractive investments in retail, renewable, and energy storage assets that assist in reducing our carbon footprint,” according to Vista’s SEC filing in December 2021.
“We have announced the retirement of approximately 7,500 MW of coal-fueled power plants by 2027, with plans to repurpose feasible sites to solar and energy storage developments. Repurposed sites provide a strategic advantage in the development of greener power … but additionally, and importantly, they allow us to continue supporting the local communities and our employees in those areas,” according to the SEC filing.