Despite the undeniable fact that Port Angeles is no longer a mill town, it’s also undeniable that a great many of the old guard here still cling to that identity. And we know that all of our so-called elected “leaders” are deathly afraid of seeming anything other than 110% pro-business at all times. With all that being so, Nippon – the Last Mill Standing – clearly has an outsize influence in Port Angeles. I would argue that that influence is generally malignant, or, at best, extremely self-serving.
Basic Fact: Nippon is a multinational corporation headquartered in Japan, despite Cherie Kidd’s seemingly unshakeable belief in them being “a local company.”
Background Fact: The City’s Utility Advisory Committee is very important when it comes to setting utility rates and policy. These decisions have a huge impact on both utility customers and the City’s overall finances. Nippon, for all intents and purposes, has two permanent seats on the UAC. No other business, local or not, has a presence on the UAC.
Background Fact: Related to the above…As the City’s largest utility customer, Nippon has historically paid hundreds of thousands of dollars a year to the City in utility taxes.
Background Fact: The City is debt-ridden, and strapped for cash, and likes the Nippon tax dollars very, very much. Utility tax dollars make their way into the City’s General Fund.
Background Fact: Nippon likes their dollars, too, and they have spent a great many of them on some very good lawyers. These lawyers have been very effective at challenging the local property tax assessments placed on Nippon. This is why, as their property has seemingly increased in value due to all the construction and upgrades, their property tax bills have actually been steadily declining.
Background Fact: Related to the above, for many years the Port was (and possibly still is) paying some of Nippon’s utility bills for the property they lease from the Port.
Think of it as a boon for doctors who treat asthma.
Background Fact: Nippon only ever started their biomass upgrade because A) The U.S. market for renewable (“green”) energy at that time was extremely strong and they smelled profits, and B) They had penciled it out in a way that had roughly half of the costs covered by U.S. tax breaks and other government giveaways.
Like a thief in the night, avoiding grief by taking flight...
Fact: The timing of Harold Norlund’s leaving Port Angeles was not random. Harold was the public face of Nippon for many years, and made many statements and promises on behalf of the company. Soon, many of those statements and promises will be exposed as lies, and Harold didn’t want to be here for that. Functionally it will work best for the company to have a new person introducing the new reality for Nippon in Port Angeles.
Fact: Since the biomass project has gotten underway, the U.S. market for renewable energy has fallen greatly, making it very doubtful that Nippon has found a buyer for any “green” energy the biomass facility will produce. (Remember: That’s why the biomass project in Port Townsend finally got stopped – the company realized there’s no market for the energy.)
Assumption: This being the case, it seems logical to assume that it is extremely likely that, sometime soon, Nippon will simply switch from buying electricity through the City and start using the electricity they produce to run their own plant.
Assumption: The last two years, Nippon has been challenging the City on the way they calculate Nippon’s utility taxes. This challenge resulted in the recent payout of $200,000 from the City to Nippon. It seems likely that this ongoing challenge will be part of the reason Nippon will give for switching to using their own power – they “just can’t afford” to pay the City all those pesky taxes.
Fact: If the above comes true in any way, it will result in the City suddenly and permanently losing hundreds of thousands of dollars a year in utility taxes. This loss, and the related loss of funds to the General Fund, will be crippling for the already threadbare City budget. Jobs, programs and services will be cut.
The bomb that will blow up the City budget is ticking...ticking...
Given all that, does it still make sense for the City Council to kowtow to Nippon? Do you think the Council members know some secret that makes this all go away and makes everything all right? Or are they whistling past the graveyard?
Put very simply, are you comfortable with the status quo? Or do you think the City could be doing a better job at being both proactive and protective?
Stay tuned for more on Nippon, coming soon…