McAlester News-Capital, McAlester, OK

March 19, 2012

Tax issue ties up millions of county dollars

By Jeanne LeFlore
Staff Writer

McALESTER —  More than a half-million county tax dollars have been spent and millions more are held in an escrow account while a lawsuit involving Kiowa Power Partners, the Pittsburg County Assessor and the Pittsburg County Board of Equalization filed in District Court of Pittsburg County waits to be heard. 

 The suit has cost the county $616,338,000 in attorney’s fees according document received by the deputy clerk in the Pittsburg County clerks office.

Beginning in 2009 the lawsuit Kiowa Power Partners LLC vs. Jim Kelley, Pittsburg County Assessor and the Pittsburg County Board Equalization was filed after a five-year manufactures exemption granted by the Ad Valorem Division of the Oklahoma Tax Commission expired in 2008.

Kiowa Power Partners is a combined-cycle gas-fired power plant with 1,220 megawatts of capacity designed to supply electric energy to 1.2 million households. The company operates as a subsidiary of Omaha based Tenaska, inc. which owns and operates KPP, according to a press release.

 Located in Kiowa off old Highway 69 Kiowa Power Partners employs 35 people and sells capacity and energy under an 18-year electricity manufacturing agreement with Shell Energy North America L.P.S. 

In an interview Thursday with the McAlester News-Capital, Mike Meyer vice president of Asset Management for Tenaska said the company expects to pay its tax bill.

”Kiowa Power Partners desires to be a good community member and we work hard to comply with all of the applicable laws and regulations of the State of Oklahoma, Meyer said. “We take our responsibilities as an Oklahoma business seriously and expect to pay our property tax bill based on a proper valuation of the property.”

He said the taxes in dispute are based on the value of the tangible personal property, machinery and equipment, owned by KPP. “The tangible personal property should be valued at fair market value; what a willing buyer would pay a willing seller in an arm’s-length transaction.” 

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Contact Jeanne LeFlore at jleflore@mcalesternews.com.