Port Jefferson is saying it's owed concessions Huntington received in their settlement with LIPA. File photo by Erika Karp
Though litigation between North Shore towns and LIPA have ended, the story of the stacks is not yet over, not by a long shot.
The Town of Huntington, with one hour to spare on deadline, approved the settlement with the Long Island Power Authority on its tax certiorari case over its Northport power plant Sept. 4. The agreement cuts LIPA’s power plant property taxes from $86 to $46 million in a 7-year glidepath. The settlement also included an extra $3 million sweetener on top of the deal to be paid in $1 million installments in the next three years. This settlement addition came just a few weeks before the deadline neared.
Though Huntington residents and the local school district will have to deal with the financial impact over the next seven years, Port Jefferson and its residents are in the middle of its own glidepath from its 2018 settlement over the Port Jefferson power plant. Village officials said LIPA is contractually obligated, based in their own settlement, to also grant any beneficial deals to the Town of Brookhaven and Village of Port Jefferson.
Mayor Margot Garant said during the Sept. 8 village board meeting that Port Jeff’s attorney is in contact with LIPA’s counsel to get those same “sweeteners” by repassing their settlement.
Port Jefferson’s case was finally settled in December 2018, reducing the plant’s assessment from $32.6 million to $16.8 million over 9 years. Port Jefferson is currently in year 3 of the glidepath, with the first two years of the settlement effectively rolled into one.
Port Jefferson is in the midst of dealing with the loss of property tax revenue from the Port Jefferson Generating Station. This year’s budget reflects a $50,000 increase from last year in the total amount that Port Jeff has to raise from resident taxes, partially due to the LIPA settlement.
Village Attorney Brian Egan said he has been in contact with LIPA’s lawyers and is just waiting for the power authority to finalize the details of the Huntington settlement. He expects there could be the benefits of an extended payment and the potential to extend payments out over a longer time, adding that he hopes to have greater details of what Port Jeff should be able to get later this month.
In a statement, LIPA officials said that the power authority, Town of Brookhaven and the Village of Port Jefferson “have started discussions to consider amendments to the 2018 settlement agreement for the Port Jefferson Power Station. LIPA intends to provide comparable settlement terms for Port Jefferson residents once the Northport settlement is finalized. Terms will be based on the size of the plant and existing tax payments.”
Egan also touted the village board’s decision to settle their plant’s case earlier than Huntington’s, adding that this means Port Jeff has a more gradual route to weather the drop in property taxes from the plant.
“The mayor and this board bore this settlement on their backs,” Egan said. “It was an early exit on this and Huntington is never going to recoup the costs they did.”
Trustee Bruce Miller said it’s important that Port Jeff receive that extra $3 million that Huntington will also be getting in their settlement over three years. In the past, LIPA has also argued that the plants in both townships may close in the near future. Meanwhile, Port Jeff has argued for keeping the plants running and retrofitting the property with newer technologies.
“We have been speaking with National Grid [which operates the Port Jeff plant] and they have been a little close-lipped,” Miller said. “LIPA, whether they have just been trying to get a settlement from Huntington, has been a little bit intimidating with talking about closing plants and not dealing with us in terms of what a better future will be.”
This post was amended Sept. 10 to add a statement from LIPA.
Hurricane Laura is expected to cut across the breadth of the U.S. and come at Long Island as a series of storms. PSEG LI said its ready for any cleanup afterwards. Image from NOAA
Amid numerous investigations about its failed communication systems and inaccurate estimated time to restore power after Tropical Storm Isaias, PSEG LI is returning to an earlier version of outage software.
Tropical Storm Isaias uprooted a tree in St. James. Photo by Rita J. Egan
The utility, which is overseen by the Long Island Power Authority, is rolling back from version 6.7, which was installed earlier this year, to version 5.5, according to an email from LIPA in response to TBR News Media’s questions.
This is one of several steps PSEG, under LIPA’s supervision, is taking to address any future storms that might hit Long Island.
“LIPA is currently conducting an end-to-end review to understand the root causes of the communications and restoration systems issues, including the outage management system and the various feeder systems,” LIPA representatives explained in its email.
The power authority also indicated that it was closely overseeing PSEG’s immediate, corrective actions through daily calls and reports and an independent review of system modifications and testing.
LIPA and Electeds Conduct Reviews
LIPA is planning to issue 30, 90, and 180-day reports to the LIPA Board of Trustees and the public.
The reviews include an evaluation of pre-storm readiness of the telecommunication systems, a root causes analysis of unprocessed calls and text message, and review of the design and implementation of outage management and restoration systems and processes and actionable recommendations on storm preparedness, system and management controls and approaches to increasing system reliability and performance.
“It’s good that they’re doing an outside report … It’s not going to help us now.”
– Jim Gaughran
While State Sen. Jim Gaughran (D-Northport) welcomed the review, his primary concern, he said, was whether the utility was prepared for the next storm, particularly in the immediate aftermath of Hurricane Laura, which devastated parts of Louisiana.
“It’s good that they’re doing an outside report,” Gaughran said in an interview. “It’s not going to help us now. This is a crisis situation and you would think that they would have an emergency task force… that would come up with changes and implement them” within days of the response to a storm that knocked out power for more than a week to parts of Long Island.
PSEG said in an emailed statement that the company is “working diligently to be prepared for the next major weather event and ensure that our response to Tropical Storm Isaias was an anomaly.”
The utility company indicated it had made configuration and capacity changes to the phone system, rolled back the outage management system to a more “stable” version and put “processes in place to continuously monitor our IT systems for capacity and bottleneck issues.”
A tree lies across Old Post Road East in Mount Sinai after Tropical Storm Isais. Photo by Kyle Barr
While New York State Attorney General Letitia James is conducting her own investigation into the company’s response to the storm, LIPA indicated that the Department of Financial Services, in cooperation with the Department of Public Service, was also participating in a review.
The involvement in the DFS is “good,” said Gaughran, who has been a consistent critic of both LIPA and PSEG even before Tropical Storm Isaias. “The more the merrier.”
One of the questions Gaughran and other representatives asked about LIPA’s oversight of PSEG LI related to the timing and effectiveness of the most recent stress test. In response to a letter Gaughran and Assemblyman Fred Thiele, Jr. (D-Sag Harbor) sent to LIPA, CEO Thomas Falcone indicated that the outage management system was most recently stress tested in June of this year.
“Part of LIPA’s review includes the stress-testing procedures used in the past and improvements for the future,” Falcone said in his response.
Cost of the Cleanup
Senator Gaughran and Assemblyman Thiele said they are also focused on the source of any reimbursement the company receives in connection with costs related to the storm.
Long Island rate payers “shouldn’t be paying for the cost of out-of-town crews sitting around waiting to do work and not doing work because the management failed to communicate,” Gaughran said. The costs of bringing in those crews from out of state and feeding and housing them should be shared by shareholders of PSEG, Gaughran contended.
“I believe shareholders have to be responsible for at least any portion of the additional costs related to their incompetence and failure in dealing with the communication system,” he said. Had the communication system worked as it should, the time to restore power might have been cut down dramatically, Gaughran argued.
“LIPA retains a third-party auditor for storm recovery costs where federal funds are involved, as will likely be the case for Isaias,” Falcone said in the letter.
LIPA estimates that the cost of restoration, which involved over 6,000 personnel, was over $350 million, with $260 million eligible for FEMA reimbursement. The main driver of the costs, Falcone said in his letter, was the extensive damage to the electric grid, which occurred at over 20,000 locations.
Reiterating sentiments he shared during a virtual joint hearing of the New York State Senate and Assembly, Falcone said the system PSEG LI designed and implemented did “not meet the standards of our contract. LIPA retains all of its contractual rights and remedies and will pursue the appropriate course of action after the conclusion of the various investigations.”
“LIPA retains a third-party auditor for storm recovery costs where federal funds are involved, as will likely be the case for Isaias.”
Thomas Falcone
Gaughran said he would consider Falcone’s response to his letter and would likely respond with additional questions that address additional concerns.
“There are a lot of issues I hope” LIPA addresses, the state senator said, including why the company didn’t contract with workers from National Grid, who were already on Long Island.
“You had Long Islanders ready to work,” Gaughran said. “They could have been put into operation immediately.”
Gaughran doesn’t necessarily think LIPA needs to revoke its contract with PSEG LI. Rather, he wants to “get a system so the lights can go back on at a reasonable time.”
Ultimately, the state Senator believes the way LIPA oversees PSEG LI may not provide sufficient reassurance for residential and business customers.
Ultimately, Gaughran would like the legislature to revisit the structure of the agreement between LIPA and PSEG LI.
“This structure isn’t working,” Gaughran said.
In his letter to the politicians, Falcone agreed that “Long Islanders deserve better” than the response they got from PSEG LI after Isaias. “LIPA is working to ensure they get better.”
A large tree in front of Emma S. Clark Memorial Library was no match for Hurricane Isaias. Photo by Pam Botway
Politicians with long memories and short fuses demanded answers from PSEG and LIPA for the communications problems and the slow restoration of power after Tropical Storm Isaias, even as they lamented how this wasn’t supposed to happen again after the long recovery from Superstorm Sandy in 2012.
State Assemblyman Steve Englebright (D) said LIPA and PSEG were inconsiderate with their spoiled food policy. Photo by Kyle Barr
In a full-day hearing of the combined New York State Assembly and Senate, local politicians including Assemblymen Steve Englebright (D-Setauket) and Doug Smith (R-Holbrook) and Senators James Gaughran (D) and Todd Kaminsky (D-Rockville Center) questioned everyone from the chairman of the Public Service Commission, John Rhodes, to the President of PSEG Long Island, Daniel Eichhorn, and the CEO of LIPA, Thomas Falcone.
“We were told after Superstorm Sandy that things would change, but they did not,” Kaminsky said. “Why do we pay some of the highest electric and internet bills in the country when we couldn’t reach a provider, when the information we got was inaccurate? Why is it so hard to receive a reimbursement? Who is funding those reimbursements?”
Indeed, Rhodes, of the Public Service Commission, said he wanted answers from numerous utilities throughout the state and that the commission was not going to leave “any tool on the table.”
That proved small consolation for politicians and their constituents, some of whom were without power for over a week and many of whom had to throw out the entire contents of their powerless refrigerators and freezers. That is an especially problematic proposition in the aftermath of the pandemic, when budgets are tight and the recession caused by the lockdown has cut jobs in numerous industries.
Englebright questioned why PSEG is reimbursing customers for food spoilage only if their power was out for at least 72 hours. The reimbursed amount totaled $150 if the customers didn’t have receipts and could be as high as $250 if they had receipts, photographs, a canceled check or a credit card bill.
Englebright suggested the timeframe should allow for food spoiled after about 48 hours and wondered why the utilities had not settled on a longer time frame. The Setauket assemblyman wondered whether PSEG believed food “spoils more slowly on Long Island than any other place.”
Eichhorn said the 72 hour threshold defined numerous factors in a storm and “aligns with some of our processes.” The three day time frame “triggers certain things.”
Falcone added that the 72 hours defined a major storm.
“That’s not a health definition,” Englebright countered, but, rather was a “storm definition. That doesn’t necessarily reflect what somebody’s suffering from if their refrigerator is out for perhaps even half of that length of time.”
PSEG’s Eichhorn acknowledged that the company’s response to the storm was “not in line with our expectations.” He said the company is conducting its own reports to figure out what went wrong and to make changes and improvements.
“I’m not here to make excuses,” Eichhorn said. “We own the experience our customers had and we are committed to fixing it.”
Kaminsky asked whether PSEG had tested its system prior to the storm. Eichhorn responded that the company did a simulation in June and that PSEG passed that test.
That passing grade, despite the performance a few months later, will be a focus of PSEG’s own review, as well as a review conducted by LIPA.
“The most relevant stress test was the storm and [the PSEG system] was obviously inadequate,” Falcone said. The systems were “not robust enough” to allow customers to report power failures to PSEG.
On behalf of their constituents, politicians also lamented the shifting timeline for restoring power. In several cases, representatives at the virtual meeting recounted how residents spoke with people in utility trucks or representatives from PSEG who told them their power was on when their constituents were still struggling through the ongoing outage.
In an interview, Gaughran expressed his frustration with the utility arrangement on Long Island, where LIPA oversees PSEG, while the Public Service Commission has no direct authority or recourse.
“The Public Service Commission cannot fine them or sanction them,” Gaughran said. “They’re totally out of the loop.”
Sen. James Gaughran and Cold Spring Harbor Laboratory officials at an Aug. 18 press conference. He has called for additional oversight of both LIPA and PSEG Photo from Sen. Gaughran’s office
Reflecting the concerns of his fellow senators and assemblymen and assemblywomen, Gaughran wondered what the utilities would do to protect Long Islanders in the event that another storm, with potentially stronger winds and heavier rain, impacted the region.
Gaughran said he would like to ensure that PSEG and LIPA don’t tap into a storm reserve fund, which is a collection of money set aside with rate payers money.
“The language in that fund is clear: they can’t access that for any part of the cost” from mismanagement or inadequate storm response, Gaughran said. “If you have an out-of-town crew sitting at the side of the road for hours waiting for instructions … those extra costs are costs of incompetence.”
Gaughran introduced a bill that would give the Public Service Commission the authority to investigate and sanction and fine the company and force them to take corrective action.
To prevent this kind of communication failure from happening again, Eichhorn said the company was conducting reviews of its computer system, which includes its outage management system and the telephone and digital experiences.
“We have made interim changes during and since the storm,” Eichhorn said. “We are continuing to do an after-action review to identify additional short and long term changes to ensure we’re ready for the next storm.”
Falcone added that LIPA would “go back and see why the system failed. We are hiring independent people to redo the stress test.”
Assemblyman Smith asked whether PSEG knew that National Grid employees weren’t a part of the storm response crews, even though people with experience were on Long Island.
“National Grid [employees] were not used during the storm,” Eichhorn said. “That will be included in the review.”
Old Field resident Tim Hopkins took this picture late on Aug. 1 saying the black plume came out of the stack for some time before later drifting out over the Long Island Sound. Photo by Hopkins
The Port Jefferson Generating Station on the shores of Port Jeff Harbor has displayed emission issues at least twice in the past two months, photo evidence and a statement from Long Island Power Authority have shown. While plant operators said they were minor incidents, local environmentalists were much more uncertain.
On Aug. 1, past president and current member of the Cornell Cooperative Extension of Suffolk County, Tim Hopkins, was out on the water in PJ Harbor when he took a picture of one of the chimneys belching black smoke into the air.
Hopkins, who as a Village of Old Field trustee from 2016-18 chaired its environmental committee, said he goes out on the waters of Port Jeff Harbor on average six times a year, and this was the first time he saw the stack make that sort of cloud. He watched the stack exude the black smoke and snapped the picture at 7:40 p.m. The smoke, he said, continued to pour from the stack for some time before he left to go to Flax Pond. When he returned to the harbor, he saw the cloud had drifted over into Long Island Sound, where it lingered for some time.
John Turner, a local environmentalist who previously worked as Brookhaven Town’s director of the Division of Environmental Protection, said during a phone interview that, living on Long Island for 65 years, he could not recall seeing Port Jeff’s or any other power plant expelling emissions “that looked that disturbing, that’s potentially problematic from a health perspective.”
He said he also strongly suspects the black smoke could contain particulate matter, or dust and particles other than the normal gaseous emissions, that could be potentially damaging to breathe.
“That can’t possibly be just carbon dioxide or nitrogen oxide or other gases — that has to be particulate matter, which could be very troublesome to people’s lungs,” Turner said.
State Assemblyman Steve Englebright (D-Setauket) is also the Assembly environmental committee chair. When first he saw an image of the plant’s emissions, he said, “It looks deadly,” adding, “This is not a good day to breathe.”
What it looked like to the assemblyman, a geologist and ardent environmental advocate, was black particulate mixed with the emission plume. Englebright said the emissions were as bad as he’s ever seen in the three decades he’s been in office, and it far exceeds normal opacity standards. Normally when the plant is active there may be a white plume coming from the stack, especially visible in winter when much of the visibility is the hot vapor interacting with cold air to create condensation.
The plant is operated by United Kingdom-based utility company National Grid, and LIPA said in a statement National Grid is aware of all environmental regulatory requirements and the plant normally operates in compliance.
In an email response to inquiries, a spokesperson for National Grid said that the Aug. 1 incident was caused when Long Island’s electric system began to vary load and the unit became unbalanced. The black particles, National Grid said, were “most likely unburnt carbon due to the boiler imbalance,” adding it is similar to what can happen to a home heating system.
The statement said the situation lasted for six minutes while the operator made adjustments to correct the situation. Hopkins reaffirmed he saw the stack smoking for much longer than that.
In response to the assemblyman’s inquiries, LIPA sent an answer instead about another emissions failure which occurred on a separate date, July 11.
LIPA said for 12 minutes, the plant exceeded U.S. Environmental Protection Agency opacity limits on that early July date. The electric utility said the incident was a result of the plant “combusting a mix of natural gas and residual oil,” while increasing load to meet demands on the grid. While increasing load, LIPA said the boiler “experienced an upset, resulting in a temporary interruption of the fuel supply and subsequent loss of load. This caused the unit to smoke (opacity) for a short period.”
LIPA said the emissions on that date were made of various gases such as nitrogen and nitrogen dioxide, but the power authority claimed they were below regulatory limits. It also claimed the plant is unable to measure the amount of carbon dioxide and sulfur dioxide released by the emissions.
National Grid’s statement said the plant’s automated monitoring system notified the control room about the issues. Opacity incidents are reported to the New York State Department of Environmental Conservation 60 days following the end of each quarter. The company added that while opacity exceedance does occur, it maintains compliance a vast majority of the time.
“The plant is well maintained and operates in compliance with environmental regulations greater than 99% of the time,” National Grid’s statement read. “National Grid operators are highly skilled, receive ongoing training and operate the units to maintain compliance with all regulatory requirements. … However, there is no fail-safe item that will guarantee no events in the future.”
In a statement, the DEC said National Grid has reported about the Aug. 1 boiler issue but has no record of a July 11 event. The agency said plant emissions are run through filters to remove particulates before they are released into the atmosphere.
“DEC reviews the data logs from these monitors as part of our rigorous oversight of these facilities to ensure protection of public health and the environment from long-term particulate matter releases,” the agency wrote in its release.
The U.S. Environmental Protection Agency said in a statement the New York DEC is the primary regulator of the facility and sets opacity requirements, though all facilities must follow federal guidelines set by the Clean Air Act. The EPA website lists that it last inspected the Port Jeff site June 16, where the plant passed its compliance inspection.
The units entered service in 1958 and 1960, and have since gone from using coal to diesel, and now runs as a hybrid that takes in both natural gas and oil. The plant only operates a small percentage of the year, but use often peaks during the heat of summer, as more people run their air conditioners, and in the winter when more customers are working their heating systems.
Port Jefferson Mayor Margot Garant said in an email she had not been made aware by LIPA about the opacity violations. She said the sight of the black cloud was highly unusual, as the only time emissions are normally visible at all is during the winter.
Garant and other village officials have been working with an engineering firm in drafting a report to argue for retrofitting the power plant with newer technologies, including a hybrid battery to store energy in case of demand.
“You have old iron here, and when you need help to offset the peak demands, a cleaner plant would be an improvement at the site,” the mayor said.
LIPA Study Hints at Decommissioning Port Jeff Generating Station
Port Jefferson is fighting to keep property tax revenue flowing from the power plant and to prevent restrictions from being lifted on peaker unit output. File photo by Lee Lutz
Port Jeff officials are trying to combat potential LIPA plans to decommission the PJ generating station in the next few years, saying there is potential for the site when, or if, renewable energy isn’t enough to meet demands.
With so much attention put to the Long Island Power Authority over PSEG LI’s challenged storm response and upcoming public hearings over the Northport power plant, village officials now have their hands on a report by Robert Foxen, the CEO of Garden City-based engineering consultant Global Common, who was asked to create a study of potential use for the Port Jefferson generating station. The village board approved the study in June at a price not to exceed $7,500.
“If they have to unload 400 megawatts of power, we would prefer that would be somebody else and not Port Jefferson.”
—Margot Garant
In a draft version of his report, Foxen says there are advantages to the power facility on the harbor, including that it already has existing utility hookup for gas and electric and would serve as an “adequate” space for a new hybrid battery without demolishing the existing plant. He also cites in the report the site has strong capacity to switch from liquid fuel to natural gas to reduce costs, and that the site could serve as a host to potentially make Port Jeff electrically independent on its own microgrid, ensuring power for the village in case a shutdown to the main grid.
This comes down the pipe as the village’s purchase power agreement is set to expire in 2027, but because of a provision in the contract, LIPA could give notice and end its agreement as early as 2025.
Port Jeff Mayor Margot Garant was one of the main major players involved with the tax certiorari case about the Port Jeff Power Plant in advocating for the eventual settlement. Now that LIPA has made mention of decommissioning the plant, she argues losing that facility would mean a loss of reliable standard power to supplement the general push toward renewable energy.
She related it to the recent snafu with PSEG’s handling of Tropical Storm Isaias, where major sections of Port Jefferson went without power for days and the utility company was next to impossible to reach.
“It’s interesting we have a lot of plans on paper, but when you get into the everyday of how things are working or not working, it gets complicated,” Garant said. “We still really believe that our fossil fuel plant will benefit everyone in the long run because it will be reliable power. We want them to know that Port Jeff is doing their homework and is looking toward the future, and if they have to unload 400 megawatts of power, we would prefer that would be somebody else and not Port Jefferson.”
The report emphasizes that LIPA seems set to offer a PPA to large-scale battery projects “and will issue a [request for proposal] this fall.” Foxen notes that National Grid is set to propose a 100 megawatt battery for the Port Jeff site and expects to respond for an incoming RFP in late 2020.
National Grid did not respond to a request for comment.
Foxen writes in the report the next step is to create a phase 2 to the current study, and discuss strategy with Jim Flannery, the vice president of National Grid.
LIPA’s Future Plans
New York has set a lofty goal of having 70 percent of all electricity come from renewable sources by 2030 and that the electrical grid will be entirely carbon free by 2040. To that end, two wind power companies have won bids to create 1,700 watts of power from offshore wind farms. One of the two companies, the Denmark-based Orsted, has made previous announcements it plans to base its service and repair crews out of Port Jefferson Harbor. Though the timeline for those to be up and running have started to fall behind, as in April the company said they have experienced delays, some due to the COVID-19 pandemic.
In a May release, LIPA presented a study about closing down a number of its Long Island power plants, including stations such as Glenwood Landing in Nassau, Northport and Port Jeff. It cites new renewable energy has caused a general decrease in need from plants like Port Jeff. The document states it will craft a review by the end of this year on whether to retire “1960s-era steam plants” in Island Park and Port Jefferson as well as recommend an additional decommissioning of 400 to 600 megawatts of steam plants by 2022. Thomas Falcone, the CEO of LIPA, also said reducing the taxes on the plants would lead to “hundreds of millions in tax subsidies for years to come, even if the plants close, averting the immediate, drastic increase in residents’ tax rates that will result from a valuation of the plants reached by a court.”
Perhaps most vague, was the release supporting the idea that redeveloping the Port Jeff and other plants with cleaner technologies was “uneconomical.”
Whether this report was a way of aiding LIPA’s case against the Town of Huntington as it looks to nail down a settlement in that plant’s tax certiorari case, it still hints at what could be a loss for Port Jeff if it truly were to pack up its toys and leave. In a statement, LIPA clarified that “the overassessment of taxes at each of the steam plants, despite their declining energy production, is a significant factor in the early retirement of the plants. Any redevelopment of the sites with cleaner technologies, like storage, would likely be uneconomical because of the current tax assessments. The taxes on these properties are unsustainable for our customers.”
The LIPA plant as seen from Harborfront Park. Photo by Kyle Barr
Garant responded to the idea of the plant being uneconomical saying “They have to also look at is having an unreliable power grid, [keeping the plant open] is a drop in the bucket to what the storm just did to us.”
LIPA, in a statement said the after-storm repairs relates “to the transmission and distribution system, not to generating capacity. The storm experience does not affect our plans for achieving a clean power supply.”
The load on power plants often peaks when weather gets extreme, such as the middle of summer and winter, but according to a May report by LIPA, the forecast for peak load has declined steadily over the past year. LIPA has that while four fossil fuel plants built around the 1960s supply just 21 percent of Long Island’s electricity, the plants make up 80 percent of taxes of what customers pay. In December 2018, when LIPA was signing the settlement, it said the Port Jeff plant only ran 11 percent of the year in 2017.
According to a draft edition of the Global Common study, all Long Island plants have seen an annual decrease in the power output of these plants over the past decade, yet Foxen and now the village is arguing that there will be spikes in demand during extreme weather, and plants such as the one in Port Jeff will be needed to carry that extra load. Batteries, Garant argued, will also not be able to store the day’s worth of electricity if the grid is shut down.
Though the Town of Brookhaven and Village of Port Jefferson have settled on a 10-year glidepath for the Port Jefferson generating station, the Town of Huntington has yet to make a final decision on its Northport plant for what would be a seven-year glide path to an overall 50 percent reduction in the plant’s assessment.
LIPA Settlement and Finances
PSEG Long Island customers pay power plant taxes through monthly surcharges on their electric bills, but LIPA owns the electric grid and has agreements with National Grid for the power plants in both Port Jefferson and Northport. In 2009 LIPA challenged both the towns of Brookhaven and Huntington saying it had been overassessed for years, especially since the Port Jeff plant runs for so little time during the year.
For Port Jeff, however, the glidepath reducing the Port Jeff assessment by 50 percent over 10 years has caused additional problems during a year of pandemic. This year’s village budget saw a 3.19 percent decrease from last year’s budget, while residents have been asked to shoulder more thanks to the loss of power plant property taxes. The pandemic has eliminated a good amount of surplus carry over from last year, and village officials voted to put up a bond for multiple projects that were in varying stages of getting done, rather than letting them fall to the wayside.
On the Huntington side of the tax lawsuit, things seem to be coming to a head, though the Town of Huntington has not yet signed any deal and is hosting public forums to gather comments on the proposed 50 percent glide path settlement. Officials have also previously asked LIPA to beg the court to delay any verdict because of the pandemic. LIPA has refused.
Officials from the Town of Brookhaven, which also were part of the Port Jeff plant settlement, declined to comment because Huntington’s case is still being litigated, but Garant said she feels the best way to reduce economic harm to village finances and the community is to keep that power plant property open in some way shape or form.
“That was a major component of what I promised when I ran in 2009 that I would do everything I can to keep our plant open, and now we’re facing that again,” the mayor said. “I think I want to make sure Port Jeff is never not part of that discussion and is ahead of that discussion. Meanwhile everyone else is looking backward.”
A tree lies across Old Post Road East in Mount Sinai after Tropical Storm Isais. Photo by Kyle Barr
While crews from several states continued to restore power this week after the outage caused by Tropical Storm Isaias, frustrated residents and politicians expressed their dismay at PSEG for the pace at which they were restoring power and for the communications problems from a storm that passed more than a week earlier.
Indeed, Brookhaven Town Supervisor Ed Romaine (R) characterized PSEG’s response to the storm as “underwhelming” and “disappointing.” He expressed further frustration at the moving target PSEG had for restoring power.
Romaine called on PSEG to give families and businesses that lost power for more than 48 hours $500 to cover the cost of lost food. He also said he plans to send Governor Andrew Cuomo (D) a letter calling for the appointment of an independent arbitrator who could hear the claims of businesses in a “swift” and proper manner.
President and Chief Operating Officer of PSEG Long Island Dan Eichhorn said the company is still discussing any possible reimbursement to customers and hasn’t made a final assessment.
Meanwhile, State Attorney General Letitia James (D) launched an investigation of PSEG in connection with their response to a storm that knocked out power to 420,000 customers.
As of mid-day Tuesday, a week after the storm hit, 3,800 homes were without power directly from the storm. At the same time, PSEG Long Island reported 25,142 total customers without power, which includes new outages after the storm.
Eichhorn acknowledged the call for accountability from local and state leaders.
“We know there’s been a couple of agencies that want to come in and do an investigation and audits,” Eichhorn said in a press conference Sunday night. “The way I would characterize this storm [is that we] did a very good job of preparing for it. Our communications were not up to our expectations. We know that created a lot of angst.”
PSEG, which has operated under the direction of LIPA since 2014, planned to conduct its own internal analysis.
“We do recognize that our communications channels did not meet our customers’ expectations. We’re going to look at that immediately, make fixes” and will improve those processes, Eichhorn said.
PSEG has maintained during the aftermath of Isaias that the communications problems did not impede the company’s ability to restore power and that it brought in numerous additional crews and continued to request additional staff even on Tuesday.
Over the weekend and into the beginning of the week, PSEG Long Island brought in close to 2,000 more lineworkers, tree trimmers and other personnel, bringing the total to over 6,000,
That compares with the Long Island crews and contractors the company operates on a daily basis of about 600 people, bringing the response teams to about 10 times the usual operating staff levels.
Eichhorn said the crews were practicing safe social distancing protocols and were also polled prior to the start of work about how they were feeling. The PSEG executive recognized the frustration residents have felt during the outage.
“We know customers have waited a long time,” Eichhorn said.
Several politicians have threatened consequences for PSEG’s storm response, including Governor Andrew Cuomo (D) who floated the idea of revoking the franchise. Eichhorn suggested the company’s legal team would consider Cuomo’s comments.
Romaine said PSEG sent in four crews to Brookhaven, the largest town by area in the state, the first day and 10 the second. Given the number of downed trees, Romaine said he believes that should have been closer to 30.
Councilman Kevin LaValle (R-Selden) said the area was fortunate this wasn’t a bigger storm because a larger hurricane, with more rain and more intense winds, could have caused more of the population to lose power for a longer period of time.
Residents were upset that they couldn’t talk to somebody at PSEG to get answers.
Starting in 2015, PSEG received $729 million secured by Cuomo over a three-year period to strengthen the resiliency of the electric grid.
Eichhorn said that investment protected many of the customers who would otherwise have lost their power during this storm.
Local leaders, however, didn’t feel so fortunate.
“This is something that was not supposed to happen again,” Assemblyman Steve Englebright (D-Seatuket) said.
Englebright further said his office has heard of numerous problematic situations in restoring power, including in the S section of Stony Brook, where one side of a street had power and the other didn’t. When residents saw a repair truck and expressed their appreciation and excitement about power returning, the crew told them they were “here for the other side of the street” and drove off, Englebright said.
Englebright recognized the context for solutions to the ongoing problem of restoring power after major storms, including hurricanes that could come during this active season later this year.
He urged a short term plan, in which the area could return to the way things stood the week before last, and a long term plan, which could include more than cutting overhanging branches before storms wreak havoc.
Englebright and Romaine urged the area to consider burying some vulnerable lines. Romaine suggested burying one to two percent of the lines for the next several decades, increasing the resilience of the grid.
This storm serves as a wake-up call for the area, said Englebright, who lost power for four days and whose mother in Stony Brook lost power for five days.
To prepare for the storms that may come later this year, Long Island should have fuel depots with generators that are fitted for gas stations to prevent a shortage of gas, which occurred in the aftermath of Superstorm Sandy, Englebright said. He also urged greater preparation for people who are home bound and who need special medicine.
The Huntington Town Board has unanimously voted to hold two public forums on the proposed settlement with the Long Island Power Authority. The decision pushes a vote on the matter to Sept. 29, more than a month after LIPA’s Aug.11 deadline.
The passed resolution calls for a public hearing Sept.16. The Town Board added a second scheduled date Aug. 10, the day before LIPA’s deadline, to be held at Heckscher Park. Both forums will be available on Zoom.
Town Supervisor Chad Lupinacci (R) said the amendment that would call for a vote on the settlement in late September.
“I think it’s good that we are inviting the public to put their thoughts on the record, this is the most serious court case since 1653,” he said, alluding to the year the town was founded, at a July 21 town meeting. “If we go forward with scheduling these two [forums], we [should] schedule a vote on the settlement offer so LIPA knows we are not disregarding any timetables … that they know all parties involved are serious and we are vetting this agreement out.”
Town Councilwoman Joan Cergol (D) supported the move to add a September vote on the settlement.
“We’ll have two bites at the apple to be able to host public forums as the supervisor is suggesting, so that we don’t end up getting this settlement pulled from the table,” she said.
Town Councilmen Edmund Smyth (R) and Mark Cuthbertson (D) both raised questions about LIPA’s deadline.
“I was under the impression that LIPA’s counsel gave us a drop deadline date in August, and that there was not going to be any settlement offer left on the table after that date,” Smyth said. “Has there been any communication with them that they’ve agreed to extend that date?”
Lupinacci said there hadn’t been communication with LIPA but was hopeful that if the authority saw that the town had a timetable for a vote that they would extend the deadline date.
“Hopefully we can go back to them and say, ‘Look, we’re going to vote [on this],’” he said. “By at least setting this date we can go back to LIPA and say we have this August public hearing, we have a September public hearing and a scheduled vote soon after.”
The proposed deal, which was approved by the Northport-East Northport school board earlier this month, would reduce LIPA’s annual tax bill on the Northport power plant from $86 million to $46 million by 2027. The tax impact on residents would be lessened compared to the implications of a verdict in LIPA’s favor.
Owners of a $500,000 house paying $10,861 in taxes would see their tax bill increase to $13,741 in the seventh year of the agreement. Annual increases for residents would go from an additional $288 a year in the first year to $556 a year by year seven, according to John Gross, an attorney for the school district.
Gross said if LIPA was to win the lawsuit and was able to achieve a 75 percent reduction in assessed evaluation “that taxpayer [of a $500,000 home] would immediately have to pay $3,723, in addition to the refund liability that could range from $12,000 to $13,000.” If the authority were able to secure a reduction of 90 percent, those figures would increase significantly.
At the July 21 meeting, the Town Board also approved a measure to retain the Manhattan office of Mercury Public Affairs for public outreach related to the LIPA tax case.
LIPA did not respond to request for comments by press time.
District Lawyer Defends Agreement, Outlines Cost for Taxpayers
Northport power plant. File photo
After a webinar where a lawyer for the Northport-East Northport school district discussed the LIPA tax case and proposed settlement, the school board voted to accept an agreement that would reduce Long Island Power Authority’s annual tax bill on the Northport power plant at a July 20 board meeting.
In a 6-1 vote, with board president David Badanes being the only “no,” board members reiterated that they wanted to avoid the possibility of losing the tax case and be stuck having to pay years of back taxes.
The approved deal would reduce LIPA’s annual tax bill on the Northport power plant from $86 million to $46 million by 2027.
During a July 15 webinar, Northport parents and community members were provided figures and a detailed overview of the agreement.
John Gross, a lawyer for the school district, defended the proposal while fielding questions from both the public and trustee members. He detailed the tax impact on residents.
“Now we get to the difficult part,” the lawyer said. “I don’t want to mince words. There will be an impact on how much taxes are paid. The efforts of the school board through this attempted settlement is to minimize that as much as possible.”
Gross said owners of a $500,000 house paying $10,861 in taxes would see their tax bill increase to $13,741 in the seventh year of the agreement. Annual increases for residents would go from an additional $288 a year in the first year to $556 a year by year seven. Those increases don’t include LIPA’s payments to the school district, totaling $14.5 million, nor any reduction to the school district’s costs and programs which would reduce taxpayers annual payments.
Gross discussed the implications if the district were to lose the current tax reduction case.
“If there is no settlement and LIPA is successful and able to achieve 75 percent reduction in assessed evaluation, that taxpayer [of a $500,000 home] would immediately have to pay $3,723, in addition to the refund liability that could range from $12,000 to $13,000,” the lawyer said. “[A reduction of] 90 percent would be utterly horrendous.”
The district and LIPA could extend its agreement for an additional five years beyond 2027-28, when its contract with the Northport plant ends. If there is no extension, the payments would cease, according to Gross.
Critics of the deal have called for more transparency, public input and a delay to the approval of the settlement.
Huntington Town Councilman Eugene Cook (R) at a news conference earlier in the day July 15 called for a public forum to allow residents to voice their opinions. He plans to offer a resolution that would set a public meeting Sept. 16 — which would be more than a month after the Aug 11 deadline set by LIPA to approve the deal.
Cook was joined in support by fellow Councilman Ed Smyth (R) and Tom Kehoe, Northport Village trustee. Both Cook and Smyth detailed a previously promoted plan for the town to condemn the plant and take it over through eminent domain.
“We don’t need your permission to take it, we’ll pay you 154 million pounds and take it,” Smyth said, alluding to British-based energy company, National Grid.
Kehoe reiterated the need for a public meeting and said the Northport plant has been “a burden on the people of this district for many, many years.”
Huntington Town Supervisor Chad Lupinacci (R) has recently stated that “LIPA’s latest settlement proposal is, by far, the best offer presented to the town to date.”
A ruling on the tax case is expected to come from the state Supreme Court in Riverhead sometime this summer.
The Northport-East Northport school district has come to a proposed agreement with the Long Island Power Authority on a settlement that would resolve the 10-year tax case between the two sides.
The school board has approved a deal which would reduce LIPA’s annual tax bill on the Northport power plant from $86 million to $46 million by 2027. Under the proposed settlement, LIPA will make several upfront payments to the school district, totaling $14.5 million, that would help offset tax increases to residents and businesses.
In addition, LIPA and National Grid would forgive the collection of in excess of $800 million in taxes and interest that they claim are owed. National Grid owns the Northport power plant, and has been a party to the tax challenge case. The plant’s output is distributed through LIPA’s Long Island electric system.
The proposal ensures that LIPA would pay in excess of $460 million in taxes to various jurisdictions in the Town of Huntington over the first seven years of the settlement, including $312 million to the school district, according to Town Attorney Nicholas Ciappetta. It also includes the likelihood of a five-year extension with the authority.
In a letter to the district community on July 10, Robert Banzer, school superintendent, said the proposed settlement comes as the court ruling in the tax certiorari case against the Town of Huntington appears to be imminent, adding that “the very real possibility of a court ruling against the town could result in drastically reduced tax revenue from LIPA to the school system and create significant hardship for our community.”
The settlement would also protect residents from having to pay retroactive tax payments of $10,000 to $25,000 per household in addition to significant increases to property taxes, according to Banzer.
The deal still must be approved by the Huntington Town Board and Northport school board. The school district will host a virtual workshop this week to answer questions and concerns from community members. The school board is expected to vote on the settlement at a July 20 meeting. The Huntington Town Board has until Aug. 11 to approve the settlement. The town plans on holding informational meetings and answer any questions that residents or others may have regarding the settlement framework and its impact.
“LIPA’s latest settlement proposal is, by far, the best offer presented to the Town to date — and that includes any municipality that has negotiated with LIPA over legacy power plants on Long Island,” said Huntington Supervisor Chad Lupinacci (R) in a statement. “That’s not my opinion; it’s a fact. The town’s ability to negotiate such terms is due in large part to the substantial resources devoted to the defense of the case and the zealous advocacy of the town’s attorneys.”
If the settlement is not approved by both the school board and the Town Board, LIPA has advised that the settlement offer will be withdrawn and will not be revived.
Suffolk County Executive Steve Bellone (D) responded favorably to the news.
“I have said from day one that it is critical for the parties to come together to settle this litigation and avoid a court decision that could be catastrophic for the community,” he said. “I commend all parties involved and particularly the community leaders whose advocacy helped produce a far better outcome for Northport residents.”
LIPA settled similar suits with the Town of Brookhaven/Port Jefferson over taxes for the Port Jefferson plant back in December 2018.
When the Town of Huntington’s planning board originally authorized in 1965 a site plan for the Northport power plant’s first generating unit on the shores of the Long Island Sound, the impact on the greater safety, health and general welfare of the community was an overarching concern. In fact, the town’s approval stipulated that plant operators were required to submit emissions reports to the town, which were subject to regular review by town officials.
Today, the plant has expanded to four units, and while the town is still searching for records, officials do not know the last time the plant submitted an emission report from on-site monitors for a review. Town attorney Nick Ciappetta said the town is reviewing whether or not it has monitoring authority. The EPA and DEC, he said, have jurisdiction over plant emissions.
Some lawmakers firmly disagree, and State Sen. Jim Gaughran (D-Northport) is calling for action.
“The town has had more power than it’s realized,” he said. “It should take whatever action it needs to take.”
Gaughran said he regularly drives past the plant and smells foul odors. Last year, he requested a state health investigation after learning that graduates of Northport High School Class of 2016 were diagnosed with leukemia and lymphoma, after community members said they want to know if the plant’s emissions are a factor.
State health department investigators have now expanded their study to look at cancer rates in a broader population to look for patterns. (See story on Page A3) With that investigation underway, Gaughran finds it prudent to take steps to better protect the community.
Town Council member Joan Cergol agrees.
“If the Town, in its rezone of the property, or any of its agencies or boards in the 1960s imposed conditions on LILCO to protect the health and safety of Huntington residents, then it stands to reason that its successors should be bound by the same,” she said.
It is unclear what action if in any will be taken, but some are saying additional precautions would be prudent.
Danielle DeSimone is one several young adults diagnosed with leukemia from the Northport High School Class of 2016, who received a bone marrow transplant and is now in remission. She said she would absolutely support any policies that would better protect the public’s health.
“May no more families be faced with this burden unnecessarily,” she said in an email.
As the state’s health investigation continues, and as the town bears the additional burden of fighting LIPA and National Grid, spending $4.2 million to date, many people are looking at the plant with a discerning eye.
According to the DEC, the Northport Power Plant emissions are in severe violation of state and federal the air pollution standards for nitrous oxide and VOCs, which contribute to ozone. When inhaled, ozone chemicals react chemically with many biological molecules in the respiratory tract, the EPA reports, leading to adverse health effects.
It’s difficult to know whether or not a specific environmental toxin will cause a particular individual to develop cancer or other diseases, according to a 2003 report “Cancer and the Environment” published by the U.S. Department of Health and Human Services.
But significant sources of VOCs are chemical plants, gasoline pumps, oil-based paints, autobody shops, and print shops. Nitrogen oxides result primarily from high temperature combustion. Significant sources are power plants, industrial furnaces and boilers, and motor vehicles, according to the state Department of Environmental Conservation Permit Review Report from February 2019.
In response to inquiries,National Grid spokesperson Wendy Ladd said, “we submit our emissions report to the EPA and NY DEC.”
The DEC states that ozone is a regional air pollutant and most human and economic activity in the NYC metro area contribute in some way to ozone exceedences.
“If the DEC finds any facility poses an imminent threat to public health or the environment, the agency works to address the situation immediately,” said DEC spokesman Kevin Frazier.
Correction: An earlier version of this story reported that the Town Attorney Nicholas Ciappetta said that the town had no authority over emissions monitoring. The town is actually still reviewing the matter. (updated 1/29/2020)
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