Ohio municipalities group delays utility construction on Ohio River until 1995.

CHICAGO -- A group of 42 Ohio municipalities last week delayed construction on a hydroelectric plant on the Ohio River, which is being financed with tax-exempt debt, until early 1995.

The group, know as the Ohio Municipal Electric Generation Agency Joint Venture 5, planned to begin construction on the facility this year. However, the project was delayed and nearly derailed by an attempt by neighboring West Virginia to levy taxes on the facility.

Last month, the 42 municipalities reached an agreement with Wood County, W. Va., that calls for the group to pay the county $575,000 before September 1998 and $800,000 a year thereafter. The group also agreed to move planned power transmission lines.

The construction delay will give the Ohio municipalities time to obtain necessary federal approvals for constructing power transmission lines on the Ohio side of the Ohio River instead of the West Virginia side as previously planned.

In March, Wood County officials convinced the West Virginia legislature to pass a bill that would have levied $2.1 million a year in local property taxes and state taxes on the power plant, which will be located in West Virginia but owned by the Ohio governments.

West Virginia's Gov. Gaston Caperton vetoed the bill after the agreement was negotiated.

Robert Trippe, chief financial officer at American Municipal Power-Ohio Inc., a nonprofit agency for municipal electric systems in Ohio that represents the group of municipalities, said the delay should pose no problem for the project.

"We're saying at this point we don't contemplate issuing any additional debt to complete this project," Trippe said.

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