Schumer: Green Light Fed Funds Necessary to Craft a Plan to Secure Tonawanda's Financial Future

Press Release

U.S. Senator Charles E. Schumer today launched his push to secure federal funding to study ways to better ensure the financial stability for the Town of Tonawanda. Schumer explained that the University of Buffalo's Regional Institute (UBRI) recently applied for funding through the 2015 Economic Development Administration's (EDA) Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative to determine a long-term plan to address the Huntley Station's slowdown in production, and possible impending closure.

Schumer said this coal-fired power plant in Tonawanda has continually diminished its output over the years due to increased coal costs and decreased demand. As a result, the town's tax base has taken a major hit in recent years. Schumer said last year, the town was forced to cut many services and the local Ken-Ton School District was forced to close two schools and lay off more than 100 teachers. While it still serves as a source of employment for 75 local workers, the workforce has been reduced significantly over time, and NRG recently announced a plan to retire the plant as of March 2016. Therefore, Schumer said UBRI is looking into ways to partner with the federal government to begin a plan for economic transition in the Town of Tonawanda. Schumer said the EDA POWER Initiative presents the ideal opportunity to utilize federal funding to generate alternative funding sources and job opportunities, and to begin implementing a course of action.

"The Huntley plant's reduced operations has diminished tax revenue for the Town of Tonawanda and the Ken-Ton School District, and the total loss of tax revenue will hurt area residents, businesses, and even students. As a result, teachers are losing their jobs, schools are shuttering their doors and town services are in danger," said Schumer. "What Tonawanda needs now more than ever is a comprehensive economic plan to help determine its future -- and that is why I am urging the federal Economic Development Administration to approve UBRI's application to study how we can better ensure Tonawanda has a strong financial standing for generations to come."

The Huntley Generating Station has remained operational in Erie County for nearly 100 years. Throughout that time it has remained a staple along the shoreline of the Niagara River. For years, coal served a suitable form of energy but increasing production costs and low natural gas prices have paved the way for alternative energy sources. Schumer said, however, the Huntly plant's diminished operations has led to a loss of revenue, and by extension decreased tax revenue, for Tonawanda. This has produced broader negative impacts for the community and a comprehensive analysis of the Huntley Station's local and regional impacts would determine solutions and opportunities to support the long-term economic future of Tonawanda and the Western New York region,

Schumer said the high cost of coal production and decreasing energy demands has forced the Huntley Generating Station to reduce their operations and workforce. A 2014 report by the Institute for Energy Economics and Financial Analysis found that the Huntley plant was losing $3 million annually due to decreased coal consumption. Although the plant was paying over $4 million in taxes to the Town of Tonawanda in 2009, it was placed on a Payment in Lieu of Taxes program in 2012 and revenues to the Town reduced to $2,246,256. Between Payments in Lieu of Taxes and tax revenue, the plant now pays about $6.1 million total to the county, town and school district, down from $13 million in 2003. In order to account for the loss in revenue, the Town of Tonawanda and the Ken-Ton School District have been forced to make a number of difficult financial decisions, such as laying off 133 teachers, closing two schools, and making substantial cuts to the Town Budget.

Schumer said that, in light of these cuts and the announced plan to retire the plant, a comprehensive economic development plan should be initiated for Tonawanda. UBRI requested EDA funding to prepare a comprehensive analysis of the Huntley plant's future in Tonawanda. UBRI has consulted with the Clean Air Coalition of Western New York, Western New York Area Labor Federation, the Town of Tonawanda and other regional partners in their application for federal funding. This study would allow regional and local officials to determine the plant's future. Schumer said this study would not signal the end of the plant, but rather provide a clearer picture of how the town would need to revise future budgets to account for diminished tax revenues from the plant. Schumer said the study will also address the future employment and job security of the 75 workers currently employed by the plant.

The funding will be distributed through the EDA's Partnerships for Opportunity and Workforce and Economic Revitalization Initiative, which seeks to fund economic development planning projects. The initiative seeks to grant funding to a wide range of local economic development leaders, such as local governments, regional planning organizations, workforce agencies, and leading research and education institutions.

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