Owners of Chambers coal plant in New Jersey sue over tax payments

Chambers Cogeneration LP, the operator of a coal-fired plant in New Jersey, on July 1 sued its host township at the U.S. District Court for the District of New Jersey over claims the township has illegally collected about $62 million over the last 20 plus years from the facility’s owners under an invalid agreement that calls for almost $116 million in future payments out until 2033.

Chambers Cogeneration alleges that Carneys Point Township in Salem County coerced the plant’s original developers to enter into an unlawful, 40-year agreement in January 1991 that relates to a Payment in Lieu of Texas (PILOT) agreement offered by the township. The company said that under new ownership (referred to in the lawsuit as the “EIF managed funds”), in 2015 it undertook a review of the plant’s tax burden and found that tax payments have been too high. It said the actual tax amount charged by the township is higher than the facility’s actual fair value for taxation purposes. Chambers said it has filed a complaint in this matter at the state Superior Court, but with no decision handed down yet.

Chambers wants the federal court to order a refund on past tax overcharges and for authority not to pay such alleged overcharges in the future.

This plant is a 262-MW, pulverized-coal cogen located on land leased from chemical company DuPont. It provides steam and power to an adjacent chemical plant formerly owned by DuPont and now controlled by Chemours Co. The cogen also sells 184 MW of capacity and energy to Atlantic City Electric under a 30-year power purchase contract that expires in 2024. The cogen began commercial operations in 1994.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.