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Board OKs $5M power-plant payment

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Warren County agrees to pay Dominion $1M in years six through 10 of contract

By Ben Orcutt -- borcutt@nvdaily.com

FRONT ROYAL -- A proposed gas-fired power plant is a little closer to reality thanks to help from Warren County.

On Tuesday, the Board of Supervisors voted to approve a payment of $1 million per year to Dominion Resources Services Inc. for the sixth through 10th years of its contract for water and sewer with the town of Front Royal.

"Well, it seemed like it was the last obstacle that we needed to get over, and after a lot of consideration and discussions with all that was involved, it seemed the best choice to enable us to go forward," Supervisors Chairman Archie A. Fox said on Friday. "We're not considering the short-term. We're considering the long-term and, as I understand it, the tax revenues will be somewheres in the neighborhood of $4 million on buildout. So long term, we think it'll be a positive cash flow for the county."

Dominion is proposing a gas-fired power plant on Kelley Drive, just north of Interstate 66 and east of U.S. 340-522.

During a specially called meeting at Town Hall on March 7, the Front Royal Town Council voted 5-0 to approve the contract with Dominion for water and sewer rates. Councilman Thomas E. Conkey was out of town and missed the meeting.

Town Attorney Thomas R. Robinett has said that the rates for the first five years of the contract will equal the in-town charge, with Dominion paying 1.5 times the in-town rate for the next five years, and double the in-town cost thereafter.

Dominion also has agreed to pay, over a five-year period, 75 percent of the cost of a water looping system -- not to exceed $3.5 million -- and will pay about $500,000 for the installation of some other equipment, Robinett said.

Dominion is pleased with its arrangement with the town and the county.

"This is a win-win-win for Warren County, Front Royal and Dominion," Jim Eck, vice president of business development for Dominion, said via e-mail on Friday. "This agreement on the water for our proposed power station is a valuable economic incentive for us and we thank the county board of supervisors. By all three of us working together, the power station is now a very viable project going forward."

Shenandoah District Supervisor Richard H. "Dick" Traczyk said it is not uncommon for industries to be offered incentives to encourage them to locate in Warren County. Traczyk said other industries along the U.S. 340-522 corridor, such as DuPont and Interbake, were offered incentives to locate in Warren County.

"So it was just a nice compromise between the town, the county and Dominion to get it going," Traczyk said. "So that's basically not a gift, if you will. It's an incentive the way we looked at it, and the incentive is to keep them here. They were having real problems with the price of water, and it was just another way of trying to smooth everything over and make sure they stayed here because the long-term benefits far outweighed that little issue."

Happy Creek Supervisor Tony F. Carter spoke in a similar vein.

"We had to work with Dominion in order to help bring them here," Carter said. "I think it's worked out well for them, for the town and for the county. The town's basically got what they needed to help protect the integrity of their infrastructure and system, and the county's got a great asset coming. It's going to help keep the taxes low for the citizens, and Dominion's got some help to make their model work in order to get their final approval from the" State Corporation Commission.

"I think it's also a good example of the county and the town and Dominion working well together to ensure that we could bring them to our community," Carter added. "I think it's a good deal. I think it's good, and I think it'll be good for years to come."

Mayor Timothy W. Darr agreed, and is pleased with the county's help.

"I think it's a good thing that they worked out a deal with Dominion that will help get them here," Darr said. "We worked the best deal we could with Dominion. We had a very good dialogue with Dominion. We worked what we thought was a very fair contract for all parties, and we accepted that contract as well as they did, and then I thought it was good that the county stepped up and helped Dominion, helped them get to where they needed to be to bring the plant here to Warren County."

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