Council bids to pay £236k AES rebate ‘over period of years’

NEGOTIATIONS are taking place in a bid to ensure that Larne Borough Council does not have to fund a massive rate rebate for Ballylumford power station in a single payment.

The Larne Times has learned that the shortfall between what the local authority budgeted for in its new district rate in February has increased by £1,300 for every day that AES has been unable to produce electricity at full capacity. And a rebuild of the gas-powered generator had still not been completed on Friday – six months after the unit failed on December 7.

At the end of last week, with the council’s liability for the rebate standing at £236,000, chief executive Geraldine McGahey had an opportunity to lobby Finance Minister Sammy Wilson, the East Antrim MP, at the Ledcom complex in Willowbank, where the 2012 Larne Business Awards, organised by the Larne Times, were being launched.

East Antrim Sinn Fein Assemblyman Oliver McMullan, who was also present, received a response from Mr Wilson to a written question submitted at Stormont. It revealed that AES Ballylumford - which is rated on its output – was due a total refund of £322,000 up to the end of March when district and regional rates are combined, which means Mr Wilson’s Department of Finance and Personnel will also be assessing the impact on the Executive’s budget.

Mrs McGahey told the Larne Times that “as a prudent organisation”, the council was planning for the worst-case scenario, which would be a one-off repayment of the full amount in the current financial year. She confirmed that it would mean further efficiency savings of 2.5-3 per cent, but added: “What we would like to see is agreement between Land and Property Services and DFP that any clawback is not taken off us in a lump sum. We would ideally like come to an arrangement whereby it is paid back over a period of years, which would ensure that the impact on our budget is manageable.”

Mrs McGahey said the council sympathised with AES Ballylumford, adding: “We can’t expect to enjoy the benefits of such a substantial contributor to the rates if we don’t also take the bad with the good,” she added.

Mr Wilson said the generator failure could not have been predicted, but it was obvious that the loss of income would “play havoc” with the council’s finances.

He added: “If it is felt by Land and Property Services that there would be a long-term catastrophic effect on the council, the repayment could be phased in over a period of time. I have no doubt that the council will be coming to us about that.”

Mr McMullan hopes to be in a meeting with Mr Wilson by the end of this week to discuss the issue. “I have now spoken to the minister and he did share my concerns about the potential impact of the rebate on the whole Larne borough and we are going to set up a meeting between himself and myself to discuss this further in the Assembly this week,” he revealed.

“Part of what I want to discuss is the fact that the power company’s rates contribution is based on its output and it is my belief that for every day that this generator is out of commission it costs the council between £1,000 to £1,500 in lost revenue. I will ask the minister to look at this because there is no way that the council and ultimately the ratepayers should be liable,” Mr McMullan added.