State Tax Officials Reduce Value of 4 Power Plants

State tax authorities agreed Thursday to reduce the value, and therefore the property tax, of four Southern California power plants owned by AES Corp., including one in Huntington Beach.

The action, which decreases the plants’ values by more than half, prompted immediate groans from that city’s administrator, who said Huntington Beach would lose more than $500,000 a year in income.

“What this does is defer any money being available for some of the projects we are committed to,” Ray Silver said.

State officials set the total value of the four plants -- which are in Long Beach, Redondo Beach, Newhall and Huntington Beach -- at $591 million instead of an earlier assessment of $1.3 billion. AES Corp., which bought the plants in 1998 for $850 million, had argued that their value has eroded because of decreasing electricity prices and a glut of power from newer, more efficient plants.

On Thursday, however, Silver said he doubted that theory. “The most incredulous thing to me,” he said, “is that you can spend $200 million on improving the property, yet in the eyes of the majority of the State Board of Equalization it is determined to have no more value.”

Among the projects in the city that will have to be put on hold, Silver said, are a plan to purchase several acres of wetlands south of the plant to preserve as open space, as well as plans to beautify the area.

“It will probably be a number of years now” before the funding is available, he said.

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Times staff writer Jean O. Pasco contributed to this report.