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Regional Chamber president: Middletown in position to absorb loss of Three Mile Island

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 5/15/19

If Three Mile Island closes, Middletown is in the best place it can be in Pennsylvania in terms of absorbing the impact, Harrisburg Regional Chamber President David Black told the Middletown Business …

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Regional Chamber president: Middletown in position to absorb loss of Three Mile Island

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If Three Mile Island closes, Middletown is in the best place it can be in Pennsylvania in terms of absorbing the impact, Harrisburg Regional Chamber President David Black told the Middletown Business Association on Thursday.

The greater Harrisburg area is seeing projected population growth from 3.5 to 3.8 percent compared to 1 percent for the state, Black said, citing a report by the Pennsylvania State Data Center based at Penn State Harrisburg.

Dauphin County is wedged between the two fastest-growing counties in Pennsylvania from 2010 to 2018 — Cumberland, growing by 6.8 percent, and Lebanon by 5.8 percent. Dauphin County saw 2.6 to 5 percent during the  period, according to the PSDC.

“Middletown is here and there is growth all around us,” Black said. “You’re right in the heart of a thriving economy in Pennsylvania. This is as good as it gets.”

Black said the borough has made “great progress” in recent years, noting the downtown improvement project and Tattered Flag, which he called “one of my new favorite places.”

He sees Middletown as well-positioned to take advantage of young professionals who want to live in “walkable communities,” especially given growing Penn State Harrisburg. Harrisburg is “filling up with young people” moving into downtown office space being converted into apartments, Black said.

He pointed to the successful transition the Middletown area made when Olmsted Air Force Base closed in the late 1960s. The base is now home to Penn State Harrisburg and Harrisburg International Airport, both key drivers of the area economy.

“Where there are challenges there are also opportunities. That’s when a community comes together,” Black said. “They took lemons and made lemonade, and it turned out really well.”

The Middletown area impact of TMI closing will be mostly felt by businesses, compared to Londonderry Township and Lower Dauphin School District, which depend on tax revenue from TMI to balance the budget and provide services.

Middletown borough receives no “revenue stream” that will go away due to TMI closing, Finance Director Kevin Zartman told the Press & Journal in an email.

Middletown Area School District expects to see some reduction in earned income tax revenue from TMI workers living in the district losing their jobs, district Chief Financial Officer David Franklin told the Press & Journal. The district has not yet been able to quantify the potential impact, Franklin said.

Otherwise, Franklin said he is not aware of any ongoing financial contributions that TMI makes to the school district or its programs. Seventy-eight of TMI’s 675 full-time employees live within the 17057 area code, according to figures provided by Exelon.

That could impact earned income tax revenue received by the district, Middletown and Royalton and Lower Swatara Township, depending on where these employees live, how many leave for jobs elsewhere, and how soon.

Speaking by phone after the meeting, Black said Middletown businesses worried about TMI closing should first determine how much of their business is tied to TMI — and then come up with a plan to regain “what I may lose, and continue to grow,” Black said.

Black was invited to speak to the association’s May meeting at Tattered Flag Brewery and Still Works before Exelon announced May 8 that closing TMI this Sept. 30 is now certain, given state legislators failing to act on a proposed nuclear subsidy in time to meet Exelon’s June 1 deadline to refuel the Unit 1 reactor.

About 25 people attended, including association members and guests. The association signed up three new members at the meeting, said Scott Sites, who is on the interim board of directors.

While the Olmsted transition is often cited as an example of the area’s resiliency, Black during the phone interview acknowledged that unlike Olmsted, TMI can’t be converted to another use in the foreseeable future. The cooling towers won’t come down until 2074, under the decommissioning plan Exelon submitted to the Nuclear Regulatory Commission.

Even were re-use possible, the island is nowhere near as large as Olmsted was, further diminishing its potential for future economic activity, Black said.

But as with Olmsted, the impact of TMI closing will be phased in over several years, giving the community time to adapt, Black said.

Olmsted had up to 8,000 civilian employees being transferred to other bases from late 1964, when the Pentagon announced it was closing Olmsted, to June 30, 1969 when the base was shuttered.

That’s nearly 12 times the 675 full-time employees at TMI, although that number grows by about 1,500 for a month during the refuelings every other year.

The number of full-time employees at TMI will drop to 300 shortly after Sept. 30, according to the decommissioning report. Full-time staff is down to 200 by 2021, and to about 50 by the end of 2022.

But that’s a lot better than the days of the steel mills closing in the 1980s — one day everyone at work, the next day everyone gone, Black said.

The immediate impact for local governments could be a reduction in earned income tax revenue as the number of full-time workers at TMI goes down, he said.

But also in contrast to the steel mills, the TMI workers are not concentrated in one town, or even in one county.

According to figures Exelon provided in June 2017, 202 of the 675 workers live in Lancaster County and 193 in Dauphin — including the 78 within 17057. Another 76 live in York County, 50 in Cumberland, and 43 in Lebanon. The rest are scattered in Perry, Franklin and other counties.

“That is going to dissipate the impact of the earned income tax (reduction) on any one municipality and school district,” Black said.

The property tax impact, while ultimately more significant than the earned income tax impact for Londonderry, Lower Dauphin, and Dauphin County, doesn’t happen overnight but is subject to assessment changes that must be approved by the county, Black noted.

“Just because a business closes doesn’t mean the property taxes aren’t due. Somebody still owes those real estate taxes.”

Officially, the chamber doesn’t have a position on the nuclear subsidy legislation, which would make nuclear plants eligible for credits by adding nuclear to 16 forms of renewable energy, including wind and solar, that utilities must purchase electricity from in Pennsylvania.

But the chamber was “not supportive” of the proposal, Black said, noting Exelon told the chamber that even if the legislation passes, it would only keep TMI open another five or six years.

“TMI was a tool to subsidize the entire nuclear industry in Pennsylvania” at an added annual cost to ratepayers of $500 million, Black said.

Proponents say without the subsidy, the cost to Pennsylvania will be $4.6 billion a year if all nuclear plants close, including $788 million in higher electricity costs and $2 million in lost gross domestic product.