One of three owners at Hayden power plant appeals state’s valuation for local property taxes |

One of three owners at Hayden power plant appeals state’s valuation for local property taxes

Hayden power plant owner challenges state's property tax valuation

In 2014, Xcel Energy was in the midst of a $140 million upgrade at the Hayden Generating Station that included selective catalytic reduction equipment designed to further curtail the coal fired plant's emissions.
file photo

Hayden Generating Station and Salt River Project

Generation type: steam turbine

Ownership in addition to Xcel Energy: PacifiCorp, Portland, Oregon, and Salt River Project, Phoenix, Arizona. Xcel is the operator.

Capacity: 446 megawatts from two coal-fired generating units with Unit One producing 184 MW and Unit Two producing 262 MW with Salt River receiving 131 MW of that.

Ownership: Unit One: Xcel Energy - 75.5 percent, PacifiCorp - 24.5 percent; Unit Two: Salt River Project - 50 percent, Excel Energy 37.4 percent and PacifiCorp - 12.6 percent.

Pollution controls: bag houses remove particulates from flue gas, dry scrubbers reduce sulfur dioxide emissions and over-fire air equipment reduces nitrogen oxide emissions.

— Elected officials and boards of small taxing districts in Routt County are watching closely this fall as one of the nation’s largest public power utilities protests its property tax valuation at the Hayden Generating Station coal-fired power plant about 21 miles west of Steamboat Springs.

Accountants working on behalf of the Salt River Project, which owns about one-third of the capacity of the 446 Megawatt Hayden Station, are asking the Colorado Board of Assessment Appeals to reduce the valuation of its ownership share of Hayden Station by 75 percent, claiming functional obsolescence.

A similar effort is being made with regard to Salt River’s partial ownership of the larger Craig Station Power Plant about 20 miles to the west in Moffat County. The values were set by state appraisers, and Routt County government is virtually a bystander in the process.

“We might just be spectators in this,” process, County Assessor Gary Peterson said.

During a face-to-face meeting with State Sen. Randy Baumgardner, R-Hot Sulphur Springs, on Sept. 27, Routt County Board of Commissioners Chairwoman Cari Hermacinski sought Baumgardner’s help in bringing the situation to the attention of state officials.

“For Moffat County, if Salt River’s appeal is approved, it’s catastrophic,” Hermacinski said. “Our concern is that people on the Front Range at the state level are taking this seriously, and taking time to make it a full defense of what it’s worth.”

Peterson said accountants at Ernst & Young, working on behalf of Salt River. contend that the regulatory environment and transition to other forms of energy, are rendering are making coal-fired plants unsalable.

They assert that the utility’s assets at Hayden Station should be valued for taxes based on their market value rather than as equipment that generates revenue. State appraisers have looked at it the other way around.

County Commissioner Doug Monger observed that Salt River’s approach strikes him as being illogical, given that the asset continues to generate both electricity and revenues.

More than $10 million in valuation at risk

Peterson told the Routt County Board of Commissioners this week there is about $10.5 million in assessed valuation at risk at Hayden Station, amounting to a relatively modest $174,000 in 2016 property taxes payable to nine different taxing entities in 2017. But the larger concern is that should Salt River succeed in its appeal, Xcel Energy and PacifiCorp, who own the balance of the plant’s output, would seek the same property tax relief.

So far, they have not appealed their valuation here. If they did, it could potentially expose taxing entities like the Hayden School District, West Routt Fire Protection District and the East Routt Library District to a much bigger hit.

“The three owners of the Hayden power plant made up 53 percent of the (Hayden) schools’ taxable valuation in tax year 2014 (payable in 2015),” Peterson said, “So if Excel and PacifiCorp follow suit on a successful Salt River appeal of 75 percent reduction in value, the impacts to those taxing entities could be dramatic.”

Hayden School finance director Janl Linsacum said state law would protect the school district should there be a significant drop in the valuation of the power plant.

“The way the state school finance act works, if our valuation goes down, the state backfills the property tax money,” she said.

A different breed of taxed animal

Unlike homes and businesses in Routt County, which are appraised by Peterson’s office, utilities like power plants are appraised for taxes by the State Property Tax Division. Salt River was only seeking a 40 percent reduction in its valuation when it first appealed to the state, Peterson said.

When that appeal was rejected, they exercised their right to continue their appeal before the State Board of Appeals and bumped their ask to 75 percent.

To reach Tom Ross, call 970-871-4205, email or follow him on Twitter @ThomasSRoss1

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