Rupert Howell column

Published 12:00 am Friday, February 24, 2012

Bankruptcy reveals extent of LSP factor in economy, tax base

The recent bankruptcy of LSP Energy was a wake up call. When I saw how much money is to be paid in property taxes, just in Panola, I gasped.

The approximate $4.5 million in property taxes doesn’t include the over $360,000 in annual payment Panola Partnership receives that can be used toward infrastructure development, matching funds and a few other enticements to lure industry and jobs.

It’s a sweet deal. A deal that not many other communities enjoy. Currently, those funds are helping put infrastructure and building “pads” at the new industrial park near Panola County Airport. Most other counties or communities would have to raise taxes or float a bond issue to do what has been done there.
It was no accident. The power plant was enticed to come here when Panolian Ronnie Musgrove was Lieutenant Governor, a position that at the time probably wielded more weight than governor.

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With the help of others, some in our legislative delegation and others, money to build a large water line from Enid Lake to the industrial park, where LSP would locate, was obtained.

The company now had water for steam and nearby natural gas lines that would heat the water to make the steam to turn the turbines to generate the electricity. Don’t forget there are transmission lines belonging to Tennessee Valley Authority, which supplies electricity to much of the southeast and all of Appalachia, and Entergy,  which supplies most of everything else around here.

Put it together with the fact that the company paid $3.5 to $4 million in wages to 33 employees over a year, and there is more than just a substantial amount of concern that needs to be given to the economic health of this facility.

The company is seeking a $20 million debtor in possession loan to reorganize and sell. The tax debt will be one of the first debts paid when the company comes out of bankruptcy, we are told. The plant is now healthy with reworked units and an  abundance of affordable natural gas and plenty of water nearby.
Let’s hope and pray that the federal bankruptcy judge and governing agencies are just, fair and especially prompt.