Developers of two new natural gas pipelines in Ohio want to reduce their valuation, which would decrease by millions anticipated tax dollars slated for schools and municipalities, Kallanish Energy reports.
Owners of the Rover and NEXUS lines filed separate requests with the Ohio Department of Taxation earlier this month to have the values of their pipelines lowered by 30% to 50% in many places, The Toledo Blade reported.
The values sought by the companies vary from county to county and will ultimately be determined by the state. Valuations are what auditors use as a basis for calculating property taxes.
Specifics of the appeals are confidential, and the process could take months to decide, department spokesman Gary Gudmundson told the Blade.
At least one community expected to use pipeline property taxes for up to 50% of its tax base, while the tax fluctuation could impact the building schedule for a new school in another.
The pipeline developers are within their rights to seek lower property taxes annually, but the process makes it especially difficult for school districts, which depend the most on such windfalls to plan ahead, Mike Kovack, former president of the County Auditors’ Association of Ohio, told the Blade.
Canada’s Enbridge and Detroit, Michigan-based DTE Energy partnered to spend $2 billion to build the 255-mile line that stretches across northern Ohio and into Michigan.
Energy Transfer’s $4.3 billion Rover Pipeline consists of twin 42-inch, high-pressure lines that flow natural gas roughly 700 miles from northern West Virginia into Michigan.
In separate statements, the two pipeline companies said the appeals were justified based on market conditions and what they considered to be inflated valuations by the taxation department.
Auditors can go to court to challenge the final decision of the taxation department.
This post appeared first on Kallanish Energy News.