Luminant Response to the Texas Observer


Luminant_logo_sm300x189To no surprise, the Texas Observer piece on Luminant’s 2015 property tax litigation is an incomplete description of the company’s effort to reach fair taxable values at our plants that are much lower because of sustained low wholesale power prices.

Our goal is paying our fair share and without the court challenges, those valuations would result in the company paying excess property taxes for 2015. To suggest any other motive, as this article does, is inaccurate and cynical.

Although we provided the Texas Observer with extensive responses and data explaining how market forces drastically reduced plants revenue, income and property values and why power plants are valued differently from homes, those points were excluded leaving the reader with insufficient context.

Historically low natural gas prices and, increasingly, subsidized wind generation, especially since 2014, have driven power prices sharply lower with forecasts for them to remain low for years.

The Texas Observer implies homes and power plants for property tax purposes are valued the same through comparable sales. They’re not, despite material we gave to the reporter explaining the distinction. Unlike the residential market, there are very few sales of power plants that can provide a good comparable value.

The best, most accurate and sensible way to determine the fair taxable value of a power plant is by using what’s called a market-based income model. Market-based income models are widely relied on in Texas by owners of large industrial properties that are income-producing assets.

Counter to what the Texas Observer reported, we have shared with county appraisers for the past several years that many of our units have lost significant amounts of income – well into the tens of millions of dollars for 2015 alone. And our annual filings with the Securities and Exchange Commission have shown a steadily decreasing value for these same plants.

Just as plant values were higher when power prices, revenue and income were greater, values must now accurately reflect the impact of low prices. What remains constant is that as a longtime member of the communities where our plants, mines and many employees call home, we remain deeply concerned about their overall success.

More Pov

 

TCEH Corp., Parent Company for Luminant and TXU Energy, Emerges from Chapter 11 as a Competitive, Well-Capitalized Company






News Release   TCEH Corp., Parent Company for Luminant and TXU Energy, Emerges from Chapter 11 as a Competitive, Well-Capitalized Company     *** Energy Industry Veteran Curt Morgan Formally Named CEO   *** Restructuring Eliminates More Than $33 Billion in Debt   *** Benefits from Low Leverage Relative to Peer Group   *** Company […]

Job One Profiles: Razen Thomas






Razen Thomas is proud to be Powering Texas and proud of the hard work and innovation that she sees from her colleagues every day at Oak Grove Power Plant. As support manager, Razen makes sure everyone has the tools, equipment and processes to do their jobs safely and effectively. Watch this month’s Job One Profile […]

A Soaring Success






An abundance of wildlife, including numerous bald eagles, call Luminant’s sites and reclaimed land home. When Liberty Mine’s resident bald eagle pair returns this fall, they’ll find a few home renovations – most notably, a new nest location. The eagles’ nest was recently moved away from mining activities to a new location on company property […]