January 19, 2008
Alliance Withdraws Offer To Buy Mirant Plant
Laura Incalcaterra
STONY POINT - Alliance Energy Group has withdrawn its $10 million offer to buy the Lovett generating station.
The upstate New York company made the announcement yesterday, just a week after making the pitch and 13 days before its Jan. 31 deadline.
A company spokeswoman said the offer had been made based on Alliance's belief that Lovett, owned and operated by the Atlanta-based Mirant Corp., was to shut down in 60 days.
Under that scenario, Jane E. Rubinstein of Rubenstein Associates of Manhattan said, Alliance believed that an offer to buy the plant "would have been in the best interest of all parties."
"It now believes there are additional considerations," Rubinstein said. "Until they are sure of the facility and its disposition, they have withdrawn the offer."
A message left for Mirant spokeswoman Felicia Browder on her cell phone was not returned yesterday.
Stony Point town Supervisor Phil Marino said he had not received any information about Alliance's decision to withdraw its offer.
But he continued to express concern regarding the $10 million offer; the town values the plant at more than $300 million.
"If they were going to come in with such a low-ball figure, it was ridiculous," Marino said. "It's like somebody coming into my house and saying they'll buy it for $1,000."
One concern, he has said, was that Alliance would seek a property-tax reduction based on the purchase price.
Town and North Rockland school district taxpayers have been grappling with higher tax bills following a successful tax assessment challenge by Mirant.
If Alliance were to receive a substantial reduction, taxpayers potentially could face an even harder hit, Marino has said.
One generator that mostly uses coal, Unit 5, and a second generator that uses natural gas are operational at Lovett. Another coal-burning generator, Unit 4, was shut down in the spring after Mirant failed to switch to a cleaner fuel source, such as natural gas, or update pollution controls.
A 2003 legal agreement between Mirant, then-state Attorney General Eliot Spitzer and the state Department of Environmental Conservation required the shutdown if Mirant didn't act. Current state Attorney General Andrew Cuomo enforced the agreement.
But if the past is any indication, Mirant again will seek to work out an agreement with the state to allow it to keep the existing coal-burning unit in operation.
It again will be up to Cuomo, with input likely from DEC Commissioner Pete Grannis and Spitzer, to push enforcement of the 2003 agreement.
Lovett is routinely on the lists of worst-polluting power plants in the state and nation, according to the DEC and the federal Environmental Protection Agency.
Mirant originally was to shut down Unit 5 first, but after negotiating with the state, was allowed to shut Unit 4, which needed maintenance. In exchange, Mirant agreed not to pursue any further tax reductions for a two-year period and to create a $1 million energy and conservation fund for projects in northern Rockland.
In a Jan. 11 letter from Alliance's managing member, Samuel G. Nappi, to Mirant Chief Executive Officer Edward R. Muller, Nappi outlined the benefits of a sale, including his company's intention to turn Lovett into a "green" facility that would use renewable fuel sources.
The letter, a copy of which was obtained by The Journal News, also set a 5 p.m. Jan. 31 deadline for Mirant to respond.
Mirant's spokeswoman also had not returned calls seeking comment on the original offer.
Reach Laura Incalcaterra at lincalca@lohud.com or 845-578-2486.