Taxes, Jobs to Go with AES

The company that bought AES Thames, the Uncasville-based coal-burning power plant that filed for bankruptcy in February, apparently plans to close it down, taking tax revenue and jobs from the town.

“This was very, very bad news for the town of Montville,” said Mayor Ronald K. McDaniel Jr. Monday's Town Council meeting. Not only will the town lose $1.2 million in tax revenue,  but AES Thames’ 34 employees also will be looking for new jobs come January.

Details of the deal are a little sketchy at this point. McDaniel said he’d been unable to speak directly to the company that bought AES, reportedly for $2.35 million, and was getting much of his information from AES Thames employees. On the contracts he has seen, McDaniel said, the buyer is listed as both BTU Solutions and as S&S Deconstruction LLC.

BTU Solutions, of Sugar Land, TX, sells, refurbishes and demolishes power plants. Calls and emails to BTU Solutions and to AES were not returned last week.

“I wish I had more information but they have not contacted the town at this point,” said McDaniel.

McDaniel speculated that S&S Deconstruction was most likely a subsidiary created by BTU to oversee the deconstruction of the power plant. He said that the information he’d heard suggested that the buyer plans to take out the power plant’s turbine generation system and reconstruct it at a power plant in South America.

The closing date for the deal is set for Dec. 28 and McDaniel said most AES employees expect to be laid off by Jan. 12, although it’s possible that some might be kept on to help with the deconstruction.

The plant’s closure has additional ramifications for RockTenn, the cardboard manufacturer located near the power plant on Depot Road. RockTenn, formerly Smurfit-Stone, has been using steam produced by AES Thames to help run its manufacturing plant.

McDaniel said he had spoken to RockTenn and the manufacturer apparently has a plan in the works that should provide the steam it needs to allow it to continue operating after the power plant closes.

The loss of the $1.2 million in taxes, however, is another matter. Finance Director Terry Hart said it was too soon to say quite how the town might make up for that loss at this point.

“You really don’t plan for businesses to fail,” said McDaniel. “Obviously it was the worst case scenario. We’re going to have to look elsewhere to make it up. Grim times.”