ASHLAND – The Maine Supreme Judicial Court has decided that the town of Ashland correctly denied property tax abatements in 1997 and 1998 to owners of a wood-fired electrical generating plant.

The decision, issued Wednesday, has saved the town about $1.37 million, the amount of property tax money that plant owners Northeast Empire Limited Partnership sought in their abatement of property taxes and interest for the two years.

The town had maintained that a company-developed valuation was not credible, and the town’s finding was upheld by the State Board of Property Tax Review and affirmed by Kennebec County Superior Court. NELP had appealed the town’s refusal of a tax abatement.

The company, and its subsequent owner, Boralex Inc., which bought the plant in 2001, still have three years of abatement requests before town, county and state officials. Those requests may be negotiated now that the state’s highest court has upheld the denial of abatements.

“This involved quite a bit of money,” interim Town Manager Deborah Carney said Thursday. “It was real good news when we received the notification yesterday.

“I hope this is the end of it, but I don’t know,” she continued. “This has been hanging around for quite some time.”

A decision against the town could have been very difficult for the municipality as tax revenues are raised each year to meet town expenses. Repaying huge amounts of money from five and six years ago would have placed the town in the position of having to borrow money to pay the abatements.

If the large abatement had been granted to NELP, the current owner of the wood-fired plant, as a taxpayer, would have had to pay about 28 percent of the abatement cost.Boralex’s present valuation of the plant at $21 million is about 28 percent of the town’s total valuation of $75 million.

NELP wanted the town to drop the 1997 assessment of the property from $39,220,397, the amount assessed by the town, to $2.5 million, the amount NELP said the plant was worth.

For 1998, NELP wanted the town to drop the valuation from $25,100,998 to $3 million.

Ashland’s total valuation in 2001 was $75 million. The abatements sought by the company amounted to about 70 percent of the town’s total valuation, or about $59 million.

NELP paid $696,000 in property taxes in 1997 and $475,000 in 1998.

The company was looking for a rebate of $652,000 for 1997 and $418,000 for 1998. In addition to the rebates, the town could have had to pay 10.5 percent interest of the requested rebate amounts, if the town had lost the case, adding another $300,000 to the town’s cost.

The town’s annual budget is between $1.2 million and $1.3 million. NELP wanted an abatement of about that amount on its property taxes.

The plant is still valued at $21 million by the town for the 2002 tax year.

The NELP plant at Ashland was completed in 1993 at a cost of $60 million, and NELP sold power to Central Maine Power Co. In 1994, CMP renegotiated the electrical contract. In 1997, NELP was not generating power at Ashland, but was receiving $8 million a year from CMP, according to court documents.

In late 1997, NELP negotiated a contract to sell electricity to Maine Public Service Co. at substantially lower rates than it had received under the agreement with CMP.

Efforts made Thursday to reach company attorneys in Portland were unsuccessful.

Robert J. Crawford, a Portland attorney representing Ashland, said Thursday the case was a major concern for the town.

Crawford said a NELP tax appeal for the tax year 1999 has been withdrawn. The company has appealed the taxes for 2000. NELP and Boralex have appealed the 2001 taxes jointly, and Boralex has appealed the valuation for 2002.

In the fall of 2001, Boralex bought the Ashland and Livermore wood-fired electricity generating plants from NELP for $26 million, Crawford said.

The appeal for the year 2000 is at the Aroostook County commissioners’ level, while the 2001 appeal is at the State Board of Property Tax Review level.

The two appeals had been stayed pending the decision by the Maine Supreme Judicial Court, Crawford said.

The attorney said the town is attempting to negotiate the pending property tax appeals with the company. The valuation for 2002 and 2003 also are involved in the negotiations.

“Maybe this decision by the law court will open the door for negotiations,” Crawford said Thursday. “The town is looking for a resolution.

“There is a lot more money pending,” he said. “We are hopeful that we have an opportunity to resolve this, instead of fighting through appeals.”

Crawford said the Maine Supreme Judicial Court is the last step, at least in Maine, in the process. He said the Maine high court decision could be appealed to the U.S. Supreme Court, but he did not think a property tax case in Maine would be a high priority for the country’s highest court.