Constellation Energy could be paying $3 million more in taxes to Anne Arundel if a bill passes to lower a tax credit on its power plants inPasadena.
“This enables the county to generate several millions of dollars of revenue … while making up for state cuts,” said County Executive John R. Leopold, who drafted the bill, which is before the County Council.
Currently, property where electricity or steam is generated for sale gets a credit where only 50 percent of the value of the personal property is taxed.
But under Leopold?s proposal, 65 percent of the personal property that generates electricity would be taxable, with the percentage declining to 55 percent by July 1, 2010.
The bill would affect the Brandon Shores and H.A. Wagner power plants, which use coal combustion to produce a combined 2,380 megawatts of electricity, and are the second- and third-largest producers of electricity for Constellation Energy in Maryland, respectively.
It is unclear if Constellation Energy would pass the increased costs down to the consumers, as the company?s officials declined to comment on the bill, which they have yet to review.
A recent survey of Anne Arundel residents found that most are having a hard time paying their utility bills. Baltimore Gas and Electric Co., a subsidiary of Constellation Energy, is the main power supplier to Anne Arundel.
Anne Arundel is allowed to change the tax credit through approved state legislation as a way to make up for the General Assembly?s cut in the utility grant, which was the result of the of deregulation of BGE.
The county lost $7.8 million from the cut.
“This whole property tax credit was cooked up by the deregulation agreement,” said Del. Nic Kipke, R-District 31, who represents Pasadena.
“If we do not allow the counties to recoup, that?s more the taxpayer has to subsidize.”
The county is looking for extra money after state cuts and possible tax revenue shortfalls from the slumping housing market have decreased funds coming into the county?s coffers.
The power plants produced the coal fly ash that contaminated wells in Gambrills, and Constellation Energy is paying millions of dollars to ship it out of state.
