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Tax breaks sought for compressor station

Millennium Pipeline is asking for $3.6 million in tax abatements for these buildings, which will house a proposed $40 million compressor station on Hungry Hill Road in the Town of Hancock, NY.

By Fritz Mayer
December 12, 2012

The Millennium Pipeline Company is seeking to build a $40 million compressor station on Hungry Hill Road, in the Town of Hancock. The facility will allow the company to move a much higher amount of gas through the pipeline to new customers.

Mike Armiak, a Millennium representative, explained at a public hearing regarding tax incentives for the project that potential new customers are driving the project. Customers include power companies that are fueled by coal and oil that are considering changing to natural gas. The owners of oil burners in New York City and the owners of fleet vehicles are also considering the switch. He said the price of gas right now is extremely low compared to oil and coal.

The company has applied to the Delaware County Industrial Development Agency (IDA) for tax abatements that would amount to a savings of $2 million in property taxes over 15 years, and $1.6 million in sales taxes. But the company would also pay about $2 million through a payment in lieu of taxes (PILOT) agreement.

Glenn Nealis, executive director of the IDA, said the agency sees the project “as an investment in infrastructure that is crucial to future business development as well as community and residential access to natural gas,” which a couple of speakers noted is the least expensive form of fuel available today.

Several speakers, including Bill Gross, president of the Hancock Area Chamber of Commerce, echoed the view that ensuring a low-cost supply of natural gas to potential businesses was in the town’s interest.

But residents who live near the compressor station in Hungry Hill Road don’t have access to natural gas, and many of them have expressed serious concerns about health and safety impacts of the compressor. Resident Jessica Kenyon said carcinogens from the station “may have long-term health impacts on my children.”

As the debate over hydraulic fracturing rages around the nation, there are hundreds of cases of people to be found on the Internet who say their health has been adversely impacted by compressor stations, and Calvin Tillman, former mayor of Dish Texas, famously moved his family out of that town because of health concerns from compressor stations.

On the other side of the issue, pipeline companies assert that the equipment they use is improving every year.

On this project, Kenyon also said part of the road is seasonal and normally not used in the winter, but now that Millennium wants to build the compressor, town officials have removed the seasonal signs and are apparently planning to make it a year-round road.