TAXING SITUATION

MARQUETTE – We Energies has filed a petition appealing its property tax valuation for the Presque Isle Power Plant.

The company is seeking a $148 million reduction in the true cash value, attorney Jack Van Coevering of the Grand Rapids-based law firm of Bloom Sluggett Morgan, PC, confirmed in an email.

Van Coevering, the former chief judge and chairman of the Michigan Tax Tribunal, has been hired to represent the city in the case. He said the true cash value on the tax roll is $210 million, with the company wanting it reduced to $61 million.

The city of Marquette is expected to file a response by the end of the month, Van Coevering said. The only comment from the city will come from Van Coevering, city staff said.

The Marquette County Board voted unanimously Tuesday, after a brief closed session, to join with the city in the case to protect the county’s tax base.

Brian Manthey, senior communications specialist for We Energies, said in an email the petition filing marks the first time the company has contested the value of the plant for tax purposes.

“The recent change in our customer demand, predominantly due to the decision by the Tilden and Empire mines to switch electricity providers, has changed the economics of the plant,” Manthey said. “Following our unsuccessful efforts to sell the plant and our request to retire it, we believe that the estimated value of the facility for real estate purposes is now much less than it had been in the past.”

No bidders had submitted proposals to buy the plant from the Wisconsin Electric Power Co. by the March 3 deadline. A successful bid would have included the purchase of 100 percent of We Energies ownership in the plant, continued plant operation, retention of the current workforce for at least 18 months, assuming long-term contracts in effect at closing and all future and historic liabilities.

Cliffs Natural Resources announced in 2013 it would get power for its Tilden and Empire mines from another provider. We Energies then filed a request to the Midcontinent Independent System Operator Inc. to suspend Presque Isle Power Plant operations. However, the MISO decided the plant should remain in operation at least through this year to maintain a reliable electric system for Upper Peninsula customers.

The Federal Energy Regulatory Commission approved an agreement allowing We Energies to collect monthly payments of $4.35 million for one year from the MISO as compensation for operating the plant, retroactive to Feb. 1.

The Marquette City Commission on June 9 decided to retain the services of Van Coevering during a closed session at its regular meeting.

According to his law firm’s web site, Van Coevering has worked exclusively in state and local tax, and has held government and private-sector positions as a Michigan assistant attorney general and administrator of the Michigan Department of Treasury’s legal and hearings divisions. Van Coevering also has represented municipalities in property tax matters involving litigation and legislative consulting.