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Long Island Power Authority

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Graphic from the district website

Port Jefferson School District residents are confronting a major public referendum on Monday, Dec. 12.

Earlier this month, the district’s board of education passed two resolutions to put the combined $25 million in capital bonds projects out for a public vote. 

Now district officials are making their pitch to the general public, with three bond tours scheduled for October and November. Approaching this weighty decision, the community is evaluating its options.

 

Highlights

  • Capital bonds vote to be held Monday, Dec. 12
  • Proponents of Proposition 1 say facilities improvements are necessary to draw families into the district and maintain property values
  • Critics question the environmental risks and cost effectiveness of artificial turf in Proposition 2, district stands by the measure

Proposition 1

The lion’s share of the two ballot measures will go toward Proposition 1, a $23.1 million infrastructure package to modernize the district’s aging and outdated facilities. Such improvements target heating and ventilation systems, renovations to the locker rooms and team rooms, and relocation of art, technology and music rooms, among other reconfigurations.

In an email statement from Jessica Schmettan, superintendent of schools, she outlined how infrastructure improvements will help the district meet its academic standards. 

“Many of the existing items are original to the buildings, most dating back to the 1960s,” she said. “Our mission in Port Jefferson has always been focused on academic rigor and personalized instruction for all students. … In order to focus on these areas, we need to modernize and renovate aging facilities.”

Mayor Margot Garant expressed support for these investments. For her, it is prudent to invest now while district taxpayers are still subsidized by the Long Island Power Authority. 

“We are in a position right now where we have five years left on our glide path,” Garant said, referring to the gradual decline of LIPA subsidies in the coming years. “For every dollar that we spend, LIPA is still picking up 50 cents on that dollar. These facilities need to be protected, and they need to be invested in.” The mayor added, “If we don’t make those investments, that’s going to start to have impacts on property values and on whether people want to come and live here.”

New York State Assemblyman Steve Englebright (D-Setauket) has followed the matter closely. In an exclusive interview, he likened investments in school facilities to an oil change on a car: Residents can either pay now or pay in the long term.

“I think the mayor is right,” Englebright said. “This is a moment. If you miss that moment, then the buildings deteriorate and they become less appropriate for the next generation of students going into them.” He added failing to recognize these needs is “short-sighted thinking.”

‘There is still an open question as to whether these artificial fields are a) without biohazards and b) cost effective.’

— Steve Englebright

Proposition 2

The second ballot measure varies widely from the first in terms of scope and cost. It has also drawn significantly more opposition from the public and even members of the Board of Education. 

Proposition 2 concerns the $1.9 million proposed crumb-rubber artificial turf field for athletic competitions. This proposal also comes with continual costs for replacement every eight-to-12 years, a sticking point for some.

Paul Ryan, a district resident and former BOE candidate in 2022, is among the most vocal opponents of this measure. “My position on Prop 2 is that it is financially irresponsible in this economic climate of high inflation,” he said. “It’s a heat sink and will fill our harbor with microplastics, less safe than grass and less enjoyable for most of our community to play on.” He added that the process to put out the turf field for public referendum was “conducted in an ethically dubious manner.”

Ryan is not the only one against the turf field proposal. During a special meeting of the BOE on Tuesday, Sept. 13, numerous other residents raised objections to Prop 2 on similar grounds.

Citing the potential for environmental or ecological harm, Englebright, a geologist by training, expressed in his interview reservations about using artificial turf.

“The underpinnings of the artificial turf is rubber, and it usually comes from waste tires,” he said. “That has proven to be a source of contamination.” The state assemblyman added, “In the universal sense — I don’t mean specifically for this school district — there is still an open question as to whether these artificial fields are a) without biohazards and b) cost effective.”

On the other hand, during the Sept. 13 meeting, many parents and students showed support for the turf proposal, contending that it would foster school pride and bolster a sense of community identity.

Regardless of the mixed reaction, the school district remains supportive of Proposition 2. “The district is equally supporting both propositions on the ballot that represent a variety of needs,” Schmettan said.

Long-term uncertainty

During this year’s trustee election for the Board of Education, candidates debated the topics of declining student enrollment and the chance that PJSD will merge with another school district in the coming years. [See “Port Jeff BOE candidates tackle the issues,” The Port Times Record, May 12.]

Though these debates remain unsettled, Schmettan holds that the capital bonds will help draw families into the district while meeting its academic aims.

“There is no doubt districts across Suffolk County are experiencing a decline in student enrollment,” she said. “However, merging with another school district erases our unique opportunities and increases school tax rates.” The superintendent concluded, “We need to improve facilities to match our outstanding academic programs and explore ways to attract families with children to the area.”

Garant spoke in similar terms. She believes Port Jefferson remains a desirable location to raise a family. However, preserving a high standard of living and quality public schools comes at a price.

“When you go for a bond initiative, it’s a project of significant proportions,” the mayor said. “I’d rather see us make an investment and secure the quality of life that we have. And that will be up to the voters.”

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Northport power plant. File photo

A decade after the Long Island Power Authority sought to reduce the taxes it paid on the Northport Power Station, the Huntington Town Board voted to approve a settlement 56 minutes before the offer on the long-standing case expired.

With the possibility of a judgment that would not only hurt Huntington’s finances but would also have implications for the economy of Suffolk County, the Town Board voted 4-1 at 11:04 p.m. Sept. 3 to support a settlement that will cut LIPA’s taxes to $46 million from $86 million over the next seven years.

During a public forum that ran for well over five hours, Supervisor Chad Lupinacci (R) said he supported the settlement, in part because he wanted to protect the value of real estate. He also described it as a transaction the town could be “proud of.”

Councilman Gene Cook (R) voted against the terms because he suggested the board was elected to fight for the people.

Several residents spoke during the virtual hearing, with some expressing their reluctant support and others bristling at the deadline to agree to the settlement in the midst of the pandemic.

As part of the terms of the deal, LIPA also agreed to pay the town an additional $1 million each year for 2021-23.

LIPA had submitted an appraisal in 2019 that valued the property at the Northport power plant, which has the four tall red-and-white smokestacks that are visible from the Long Island Sound, at $193 million, considerably below the original $3.6 billion assessment. A judgment in favor of LIPA could have dramatically cut LIPA’s taxes while putting the town on the hook for a refund and interest liability of $825 million.

The Suffolk County Tax Act would require the county to pay the LIPA refund, which the county would then have to charge back to the town.

While the county could raise funds from public investors to pay LIPA, county Comptroller John Kennedy Jr. (R), who supported the settlement, laid out the extreme difficulty in such a course of action.

“We had to go into the market in April for a $105 million budget anticipation note,” he said. “We got slaughtered. We had to pay 4%” interest on that money. “That’s the equivalent of going to a leg breaker. We’re not in a good financial position at all. Saying we’re shaky” in raising any additional funds, let alone $1 billion, “is an understatement.”

Additionally, County Executive Steve Bellone (D), who voiced his support through a letter prior to the vote, argued that the settlement was “far better than anything [else] offered during the course of the dispute.”

As a part of the settlement, LIPA has agreed to waive all refund liability upon compliance, will pay $14.5 million to the Northport-East Northport school district and will have a lower assessed valuation for seven consecutive years to achieve tax payments not exceeding $46 million by 2026-27.

In years eight through 12, the taxes would remain steady at $46 million.

In addition to the financial implications, the settlement withdraws all appeals and pending lawsuits and gives the town a most-favored nation entitlement, which means that the town would be eligible for similar terms that other municipalities negotiated with the power authority.

The settlement also protects against a ramp down or the retirement of units, which means that the tax base won’t decline even if LIPA closes down some of the capacity of its Northport facility.

The implications of the deal are most profound for residents of Northport and East Northport. For an average residential home worth $484,868, taxes would increase by an average of $370.29. That is still well below the $4,558 increase residents would have seen if LIPA had won a court judgment.

For South Huntington, the increase in the residential tax assessment is a much more modest $22.57 per year for a home valued at $388,816.

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File photo by Lina Weingarten

Last week, the Town of Huntington announced the Long Island Power Authority agreed to provide an additional $3 million
to the town if a settlement were to go through. The money is in addition to the proposed settlement for the Northport Power Station tax certiorari case, according to a town press release.

After an Aug. 10 town public forum held at Heckscher Park, LIPA agreed to extend the deadline for the town to accept the latest settlement proposal on the Northport Power Station tax certiorari litigation to Thursday, Sept. 3, when the town will hold a public hearing via Zoom on the issue.

After the hearing, the board will vote on the settlement. According to town and LIPA officials, the additional $3 million is to reduce the impact of COVID-19 on Huntington residents.

“We recognize the challenge of the pandemic on the town’s finances and have accommodated their request for additional assistance in the first three years of the settlement,” LIPA officials said in an email statement. “The Northport-East Northport school board voted overwhelmingly to settle this long-standing litigation, and we believe we have made a fair offer for the town to move forward.”

Town Supervisor Chad Lupinacci (R) said in the release that the $3 million in additional payments will be made by LIPA to the town of $1 million per year in 2021 through 2023.

“While we were fortunate to be in a strong financial position when COVID-19 hit, the long-term impacts of this unprecedented economic crisis on our local economy and future government operations are not fully known,” the supervisor said.

Councilman Mark Cuthbertson (D) said he would continue to analyze the settlement “but any money that will go to the taxpayers is certainly a welcome development.”

Councilwoman Joan Cergol (D) said the money will soften any financial impacts of COVID-19 “and is certainly worthy of consideration in helping to protect and preserve vital town services and programs that our residents depend on and deserve, especially during these, and continuing difficult times.”

The proposed deal would reduce LIPA’s annual tax bill on the Northport power plant from $86 million to $46 million by 2027.

The public hearing will start at 6 p.m. on Sept. 3. Public comment may be submitted ahead of the forum at huntingtonny.gov/lipa-forum. The forum will livestream on Optimum 18, FIOS 38 and at huntingtonny.gov/featured-programs, where residents may sign up to speak during the forum.

The Town Board’s vote on the LIPA proposal will take place immediately after the public forum ends, and in addition to being livestreamed on Optimum and FIOS, it can be viewed at huntingtonny.gov/meetings.

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Northport power plant. File photo

After an Aug. 10 Town of Huntington public forum held at Heckscher Park, Long Island Power Authority agreed to extend the deadline for the town to accept the latest settlement proposal on the Northport Power Station tax certiorari litigation to Sept. 3.

“After receiving assurances from LIPA that the Aug. 11 deadline to accept the latest settlement proposal on the Northport power plant tax certiorari litigation would be extended to Sept. 3, the Town Board rescheduled both the second public forum on the LIPA proposal and the special Town Board meeting where they will vote on the offer for Thursday, Sept. 3,” a statement from the town read.

The second public forum on the proposal was originally scheduled for Sept. 16, and the Town Board meeting to vote was Sept. 29. Back in July, town Supervisor Chad Lupinacci (R) said he had hoped scheduling the two public forums and vote, despite being after the original deadline, would show LIPA “that they know all parties involved are serious and we are vetting this agreement out.” In turn, the goal was for LIPA to extend the settlement proposal deadline. While LIPA officials said in a statement they believe their offer is fair, they agreed it made sense to work with the town.

“LIPA’s settlement is a fair compromise, and it is the only option that will continue low taxes for the Northport community, protect Huntington residents from over $800 million of potential tax refunds, and begin the transition to a sustainable tax base and clean energy future for all Long Island residents,” a statement from LIPA read. “We believe the Huntington Town Board made a good faith effort with their decision to provide a second public forum, along with a vote on the Northport Power Station settlement agreement on Sept. 3. Because of this, LIPA has agreed to extend the terms of our settlement offer through the board’s Sept. 3 meeting.”

The proposed deal, which was approved by the Northport-East Northport school board last 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 court verdict in LIPA’s favor, though several local state officials and candidates have decried what they see as LIPA’s attempts to reduce their own tax burden at the expense of homeowners.

Lupinacci said in an email statement Aug. 20 that a ruling against the town would not only devastate the school district but the whole town.

“Our residents and businesses cannot afford that type of financial loss, especially with how we have been hit by the COVID-19 crisis,” he said. “We requested litigation be paused during the pandemic and LIPA rejected that request; now time is running out for us to make a decision. I came into office in 2018 and promised to fight for a better deal than was on the table; we achieved that and then some, including terms no other municipality has ever received from LIPA in a tax certiorari litigation, thanks to the vigorous advocacy of our legal team on behalf of our residents. This deal protects us against tax challenges during the entire seven-year term of the deal, which could be extended to protect us for 12 years, and LIPA has agreed to pay $14.5 million directly to the Northport-East Northport School District, which is an unprecedented offer of funding that could be used to help preserve educational programs while the district plans for its future and offset potential tax increases to residents.”

The Sept. 3 public forum will begin at 6 p.m. and will occur entirely online using a Zoom video conferencing platform. Public comments can be submitted ahead of the forum at huntingtonny.gov/lipa-forum. The Aug. 11 forum video can be viewed on the town’s website, huntingtonny.gov.

 

 

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Thomas Spota file photo

Ethical behavior has always been required and expected of government officials. In the pages of our newspapers, we are reporting on corruption cases, conflicts of interest and varying degrees of unfair, immoral and in some cases illegal practices in government — all levels of government. 

As one elected official recently stated, there’s a lot of this going on. You see it on federal, state and local levels of both major political parties and we need to eliminate that. 

An administrator in the Village of Northport recently pleaded guilty to using village funds as his “personal piggy bank,” according to Tim Sini (D), Suffolk County district attorney. Former county DA, Tom Spota (D), and one of his top aides were convicted of obstruction of justice and witness tampering. 

We are learning that the New York State Public Service Commission lacks oversight of the Long Island Power Authority, which can easily lead to abuse. Lawmakers are now looking to address that omission. We are not saying LIPA is corrupt, but if fraud is detected through agency audits, officials say they currently can’t take action. And with impeachment proceedings moving forward in the White House, there’s no shortage of examples of issues that deserve our attention. 

What exactly is corruption? It’s when elected officials steer contracts or use public policies and practices for their own personal benefit rather than the public good. When a government agency steers contracts to its family members, clients and business partners or to family members affiliated with these groups, it’s a red flag.

Corruption can, and often does, lead to fraud, wasteful spending and higher operational costs for government that you ultimately pay for personally. The costs are hard to quantify, but said to be significant. The state comptrollers office reports that over 215 arrests have been made and over $60 million recovered. 

Citizens need to sit up and pay close attention. Attend meetings, file Freedom of Information Act requests, look at government contracts, look at campaign contribution filings, demand transparency and ask for town hall-style meetings from your elected officials. If they’re not responsive, elect new officials. 

Among the best remedies known to prevent and beat corrupt practices is keeping citizens informed and engaged.

It may be tempting to look the other way and give officials a pass. It’s certainly easier. But turning a blind eye on corruption only breeds malfeasance. It’s about the worst response there is. Corruption ultimately corrodes the fabric of society and undermines people’s trust in their political systems and leaders. According to Transparency International, a global coalition against corruption, it can cost people freedom, health, money and sometimes even their lives. 

As governments struggle with budget deficits and aim to address urgent issues, the prudent thing to do is hold government officials accountable. We can’t fall asleep at the wheel. We the people need to make a point to stay engaged and informed in the new year and demand good government on all levels. 

State officials encourage the public to fight fraud and abuse. To report suspected abuse, call the comptrollers office at 1-888-672-4555 or email [email protected].

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Northport residents protest LIPA's ongoing lawsuit with the Town of Huntington. Photo by Donna Deedy

By Donna Deedy

On a sunny Sunday afternoon, more than 100 residents of all ages, including many families with young children and pets, attended another public rally against Long Island Power Authority. At one point, their chant filled Cow Harbor Park in Northport village where they gathered April 7. 

“Stop LIPA now,” they repeated in protest.  

The power authority, a quasi-governmental state agency, is suing the Town of Huntington to reduce its $82 million property tax burden by 90 percent. LIPA, since the state’s public bailout of LILCO, and its failed Shoreham nuclear power plant project, has been paying the property taxes for power stations now owned by National Grid.  

Northport power plant. File photo

Protest organizer Paul Darrigo formed a Facebook advocacy group called Concerned Taxpayers Against LIPA in mid-March, whose membership now totals more than 3,000 people. His group is concerned that if LIPA is successful it would devastate the Northport-East Northport school district, which currently receives $54 million annually from LIPA.

Northport village residents Kathleen and James Wansor have two very young children and attended the rally to learn more about the situation. Funding for education is important to the young family.

“It doesn’t make sense and it doesn’t seem fair for us to all of a sudden see increases in our taxes,” Wansor said. 

Darrigo’s group is also reaching out to people across Long Island. 

“I want to coordinate our efforts with the residents of Island Park, whose school district is also under assault due to LIPA’s tax certiorari filed in Nassau County,” he said. “The objective is to communicate with LIPA and our elected officials with a consistent message and reiterate a ‘strength in numbers’ mantra.” 

New York State Sen. Jim Gaughran (D-Northport) was among the elected officials who addressed the Northport crowd. He’s currently calling for LIPA reforms. 

“LIPA is a runaway authority that is not serving the public’s interest with their frivolous lawsuit. As I’ve said to LIPA, LIPA should uphold the promise that was made to my constituents and that the tax certiorari challenge should be dropped. Anything short of that would be detrimental to the vitality of the communities that I serve and would have a direct impact on their ability to provide indispensable programs and services.”

“The objective is to communicate with LIPA and our elected officials with a consistent message and reiterate a ‘strength in numbers’ mantra.”

— Paul Darrigo

But elected officials on different levels of government lack a firm position on the issue. Both County Executive Steve Bellone (D) and Gov. Andrew M. Cuomo (D) offered similar public comments on the LIPA tax lawsuit against Huntington.

“While we do not comment on pending litigation, we are monitoring the situation closely,” said Jordan Levine, deputy communications director for energy and the environment with the office of the governor. “It is our hope that LIPA and the Town of Huntington can reach a mutually beneficial agreement that is fair and beneficial to all parties.” 

Northport Village Deputy Mayor Tom Kehoe is particularly critical of the state’s position. 

“The governor better wake up and jump in on this,” he said. “People are mad.” 

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Northport power plant. File photo

Huntington’s elected officials are calling for changes to the structure of Long Island Power Authority despite being engaged in mediation with the utility company.

Huntington Town Board unanimously decided to send a message urging New York State Gov. Andrew Cuomo (D) and the state Legislature to enact the Long Island Power Authority Ratepayers Protection Act at its Nov. 8 meeting. The legislation, if passed, would require eight out of the utility company’s nine board members to be elected by public vote, among other changes.

“It is in the best interest of Town of Huntington residents to have a LIPA board that is elected by and answers to the ratepayers.

— Nick Ciappetta

“It is in the best interest of Town of Huntington residents to have a LIPA board that is elected by and answers to the ratepayers,” Town Attorney Nick Ciappetta said.

The bills were first introduced to the state Legislature in February 2017 by Sen. Kenneth LaValle (R-Port Jefferson) and Assemblyman Fred Thiele Jr. (D-Sag Harbor), co-sponsored by a coalition including state Assemblyman Andrew Raia (R-East Northport).

“I’ve been calling for the election of LIPA trustees forever, ever since there was a LIPA,” Raia said. “The best way to control our electric rates is to make LIPA trustees elected.”

Currently, LIPA’s nine-member board of trustees consists of five individuals appointed by the governor, two selected by the president or majority leader of the state Senate, and two chosen by the speaker of the Assembly.

The proposed ratepayers protection act calls for the state Legislature to create eight districts roughly equal in population based on the last U.S. Census, by May 1, 2019. A resident of each district would be elected to LIPA’s board to serve a two-year term as trustee, with the first elections to be held in December 2019. Candidates on the ballot would not be chosen by the political parties. Those elected to the board would not be paid, but could be reimbursed from the state for their related expenses, according to the draft of the bill.

In addition, proposed legislation would require LIPA to hold public hearings before making future rate changes, give residents 30 days advance notice of the hearing, and hold the event in the county it affects — Suffolk or Nassau. It would prohibit the utility company from increasing its rates to offset any losses from energy conservation efforts.

“It would make LIPA a whole lot more accountable than they are now,” Raia said. “Without a doubt.”

“The best way to control our electric rates is to make LIPA trustees elected.”

— Andrew Raia

The legislation, despite being proposed in 2017, has not made it out of committee to a vote before either the state Assembly or Senate, according to the Legislature’s website.

No action can currently be taken on the legislation, though, as the state Assembly’s 2018 session ended in June. There are no plans to reconvene before year’s end, according to Raia, particularly with midterm elections flipping the state Senate to Democratic control. The bill cannot be enacted by Cuomo without getting the legislative body’s approval. Raia said he suspects Huntington’s elected officials are hoping the governor will consider working it into his 2019 budget, which is currently
being drafted in Albany.

“I’m not the biggest fan of putting policy into the state budget, but many times it’s the only way to get things done,” he said.

Huntington Town officials had no further comment on the timing of the message. Mediation pertaining to the value of the Northport Power Station between the town, Northport-East Northport school district, LIPA and National Grid is ongoing, according to Ciappetta, as he anticipates the next mediation session before the end of November. The tax certiorari lawsuit’s next date in court is Dec. 5.

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The Port Jefferson Power Station may soon be repurposed. Photo by Alex Petroski

The Village of Port Jefferson is soon putting a lengthy legal battle with Long Island Power Authority in its rearview mirror, though the future of the property that houses Port Jefferson Power Station is still on the road ahead.

Bob Foxen, chief executive officer of Global Common LLC, a company dedicated to establishing energy partnerships and projects beneficial to its clients, was contracted by the village to study alternative future uses for the site. He presented options to the village board of trustees during a brainstorming session at a public meeting Sept. 17.

“I guess the goal is to try, to the degree possible, to make the people of Port Jefferson whole, or close to whole, assuming they lose some tax revenue,” Foxen said during his presentation.

Village Mayor Margot Garant expressed an interest for the village to formulate a plan of action for the site.

“Once we have our tax grievance settlement behind us, or we know that we’re at kind of a pause, the next question is ‘Now what?’” she said. “We want to advocate for a repurposing of the site to keep us viable on the grid.”

The village is among the municipalities preparing to imminently announce settlement terms with LIPA to resolve near-decade-long litigation regarding the property tax assessment of the plant, which the utility has argued is too high based on decreasing energy demand. Port Jeff has advocated for the refurbishment and repowering of its baseload plant to update its decades-old technology and to justify the property’s tax assessment.

By 2027, the power purchase agreement between LIPA and National Grid expires, and to resolve the tax certiorari challenges, LIPA negotiated with the village a nine-year “glide path” for tax revenue reductions to coincide with the agreement expiration, according to village attorney Brian Egan. The glide path includes gradual percentage reductions in assessed valuation on the property, deeming baseload repowering an unlikely future outcome. In addition, Caithness Energy LLC’s 2014 plans to construct a new 600-megawatt plant in Yaphank were revived temporarily by Town of Brookhaven’s town board this past summer, though the expiration of the company’s special-use permit for the site has put the plans back in doubt. If constructed, the Yaphank plant would further cloud the future of the Port Jeff plant.

Foxen admitted the options he brought ready to present during the meeting were dependent on Caithness II never getting off the ground, an outcome that is very much in doubt. The options also consider New York Gov. Andrew Cuomo’s (D) stated goal from 2016 that 50 percent of the state’s power come from renewable sources by 2030.

The consultant suggested turning the site into a 200- to 300-megawatt plant powered by peaking units or smaller energy generation systems capable of firing up only in times of high demand, as its best option. The units operate using gas or liquid fuel, though they are viewed as efficient supplements to renewable energy sources like wind and solar, which can’t handle demand on their own.

“I think it does help support renewables,” Foxen said of peaking unit plants, adding that financing the work needed to repurpose the site in this way would be hard to establish without a new power purchasing agreement with LIPA. Village officials are set to meet Sept. 20 with representatives from private Finnish company Wartsila to discuss the feasibility of installing peaking unit technology at the Port Jeff plant.

Foxen’s other brainstormed options included establishing the village as a municipal electrical utility, meaning it would assume control of energy distribution from the plant to customers to power homes, though he called the option costly and time consuming; and taking over energy distribution and limiting it to private customers at a reduced rate for businesses in specific industries that have high-energy demand, like data storage centers, for example, which could even be housed on the vacant site.

“It would be kind of an interesting magnet for a data center or somebody like that — saving money on energy might be a draw,” Foxen said.

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Town of Huntington, Northport-East Northport and Port Jeff school districts lose third-party lawsuits

Port Jefferson Superintendent Paul Casciano and Northport-East Northport Superintendent Robert Banzer. The two districts had legal challenges shot down by a judge Aug. 16 pertaining to property tax assessment claims made by LIPA. File photos

By Sara-Megan Walsh & Alex Petroski

A New York State Supreme Court judge has ruled Long Island Power Authority “made no promises” to the Town of Huntington, Northport-East Northport school district and Port Jefferson School District not to challenge the taxes levied on its power stations.

Judge Elizabeth Emerson dismissed the lawsuits brought forth by the Town of Huntington and the two school districts Aug. 16 which alleged LIPA broke a promise by seeking to reduce the power plant’s taxes by 90 percent.

“The court’s decision affirms our customers’ right to pay reasonable taxes on the power plants,” LIPA said in a statement from spokesman Sid Nathan. “We remain committed to reaching a fair settlement for both the local communities and our 1.1 million customers to put an unsustainable situation back on a sustainable path.”

Port Jefferson Power Station. File photo by Alex Petroski

The judge’s ruling is a big victory for LIPA as it allows tax certiorari cases to continue to trial, rather than being dismissed, and could have a widespread impact across Long Island for other municipalities with similar disputes against the utility.

“Obviously, we disagree with this decision and plan to appeal,” Northport Superintendent Robert Banzer wrote in a letter to district residents. “Please understand that Justice Emerson’s decision is not the end of our fight in this case.”

Port Jeff school district also responded to the development.

“While this decision is not the outcome the district was hoping for, we vow to continue to explore our options as we work to protect our school district’s financial future and the needs of our community,” the district said in part in a statement. “The district will work to keep the community apprised of any updates on the matter.”

In her 24-page decision, Emerson denied any notion that chapter 21, section 16 of the 1997 Power Supply Agreement signed by LIPA when it took over Long Island Lighting Company — which has been referred to as the 1997 Promise – was intended to benefit the school districts by preventing LIPA from challenging the tax-assessed value of its power plants.

Rather, she found it was to ensure other parties, including LILCO and GENCO, which owned the plants at the time, could not start initiating tax claims during the takeover process.

She also dismisses all claims that town governments or school districts were intended third-party beneficiaries of the contract.

“The Power Supply Agreement is clear and unambiguous and that it does not bestow any enforceable third-party-beneficiary rights on the plaintiff,” Emerson wrote.

The judge pointed to the PSA saying it “does not expressly name” either the town or school districts as a third-party beneficiaries.

“She applied contract law, not third-party beneficiary law,” said John Gross, the attorney representing Northport-East Northport school district. “That’s what we think she the mistake on.”

Gross said New York State law allows entities, like the school districts, to be recognized as third-party beneficiaries based on third-party conversations, letters, and promises. The school districts have filed thousands of pages of documents with the courts, according to Gross, that include official correspondence and records of conversations former LIPA chairman Richard Kessel had with school administrators and Huntington Town officials allegedly promising not to challenge the tax assessment of its power plants.

The judge ruled these “extra-contractual promises” made largely by Kessel “were gratuitious promises for which there was no consideration.” As such, the former chairman’s words “did not contractually bind LIPA.”

Gross said the school’s status as a third-party beneficiary “was wrongly decided.”

This recent decision could have large and profound impact not only on Huntington, Northport-East Northport and Port Jeff schools, but for all other municipal government and school districts that are LIPA’s power plants.

On Page 18 of her decision, Emerson wrote not only did the PSA contract not protect the Town of Huntington, Northport or Port Jeff school district taxpayers but “other similar situated school districts and municipalities.”

“This result was to a very large extent expected by the village, and that’s why the mayor and the board of trustees very early, initiated and drove settlement discussions with LIPA to resolve the issue,” Port Jefferson Village Attorney Brian Egan said.

The village board of trustees and Mayor Margot Garant in April passed a resolution approving “settlement concepts,” and the two sides are exchanging details of terms, expected to reach conclusion “at any time,” Egan said.

“When we’re a taxing jurisdiction and we’re going to subject ourselves to the back taxes on a longshot, that is not what we do with taxpayer dollars,” Garant said. “We have an obligation to not gamble, so to speak.”

“Please understand that Justice Emerson’s decision is not the end of our fight in this case.”

— Robert Banzer

Huntington town attorney Nick Ciappetta said the town plans to file an appeal of the judge’s decision.

“We believe there’s only one logical and legal way to interpret that provision,” he said. “That provision was there for the benefit of the taxpayers of Huntington.”

The town, Northport and Port Jefferson school districts will have 30 days to file an appeal once the decision is officially entered into court records, according to Ciappetta. He estimated an appeal of the decision could take 18 to 24 months.

“The decision does not affect the pending tax certiorari case between the Town of Huntington and LIPA scheduled for trial in December, nor do we expect it will impact the parties’ willingness to proceed with mediation,” Banzer wrote to the community.

Gross confirmed that Northport school district is still looking forward to sitting down for the first mediation session with the Town of Huntington, LIPA, National Grid  and third-party neutral attorney Marty Scheinman slated for Sept. 26.

Officials in Brookhaven’s Town Attorney’s office could not be immediately reached for comment, though the town has also said it is nearing a settlement in its case. Egan speculated settlements for municipalities attempting to resolve cases out of court might be held up by mediation in Northport and Huntington Town’s case.

This post was updated Aug. 17 to include a statement from Port Jefferson School District, and to attribute LIPA’s statement to Sid Nathan.

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Hurdles remain for project, which could have environmental and economic implications

Brookhaven Town Supervisor Ed Romaine. File photo by Erika Karp

They’ve got the power.

Brookhaven Town voted 6-0 with one abstention in favor of lifting a restrictive covenant on an application by Caithness Energy LLC to construct a new, 600-megawatt energy generation plant in Yaphank at a July 12 meeting. When the board approved the independent power producer’s initial 2014 application, when it sought to construct a 750-megawatt facility, it imposed strict regulations aimed at preventing Caithness from making any changes to its plans, or face starting over from square one getting approvals. The power company asked town officials to lift the covenant for its present-day plans that feature newly available technology — which is what required the second vote, preceded by a June 26 public hearing.

Councilwoman Valerie Cartright (D-Port Jefferson Station) abstained from the July 12 vote after voting against the application in 2014, which passed 5-2. Supervisor Ed Romaine (R) voted “no” in 2014, but approved the lifting of the restrictive covenant this time around.

Councilwoman Valerie Cartright voted against Caithness’ application in 2014, and abstained from the vote to remove a restrictive covenant on the application July 12. File photo by Erika Karp

“In requiring such covenant proposed in 2015, the town board did not intend to require the applicant return for covenant amendments when technology changes or improves, or to construct a less impactful energy generating facility,” Brookhaven Town Attorney Annette Eaderesto read from her office’s findings on the matter. “In fact, the town board finds that in consideration of the health, safety and welfare of the residents of the town, the town shall not regulate or restrict the technology that may be used by the applicant.”

Caithness President Ross Ain said in a statement the company was pleased to hear the town had repealed the restriction.

“We now look forward to consideration and approval of the site plan filed with the Planning Board for what will be the region’s cleanest, most fuel-efficient, and most water-conserving power plant,” Ain said.

Cartright explained she was abstaining from the vote to repeal the restrictive covenant because she thought a vote to either approve or disapprove of Caithness’ entire application would be more appropriate. She also raised a concern about the special use permit issued to Caithness in 2014, which according to her interpretation of town law, expired July 15, 2018.

“That’s under consideration,” Eaderesto said of Cartright’s concern in a phone interview.
The town attorney said she expected the Planning Board to decide if Caithness will be required to reapply for the special use permit for the Yaphank site this week.

Don Miller, a spokesman for Caithness Energy, did not respond to a question raised by email regarding Cartright’s suggestion the company’s special use permit expired Sunday.

Caitness’ renewed request comes as Port Jefferson Village and the town have said a settlement is nearing in an eight-year-long legal fight with Long Island Power Authority over the utility company’s contention its Port Jeff plant’s property taxes are over assessed based on the decreasing energy demand. The settlement would smooth the impact of a potential substantial loss of revenue for the village, Port Jefferson School District, Port Jefferson Free Library and Port Jefferson Fire Department based on a reduced assessment of the plant. It would also prevent the village from being held liable for years of back pay should it have chosen to play out the legal battle in court and lost rather than settling the case. The village has argued a way to make good with LIPA over its decreasingly needed plant could be to increase its output capacity. If constructed, the Caithness II plant, which would be built nearby the company’s first Yaphank plant opened in 2009, could theoretically kill plans to repower the Port Jefferson plant.

However, according to Ain, as of June 26 LIPA has made no commitment to purchase power from the company should a second facility be constructed in Yaphank. It does purchase power from the first Caithness plant.

“The construction of a Caithness II facility will have the inevitable effect of pushing our community off the economic cliff.”

— Margot Garant

The June 26 public hearing drew comments from those in favor of the proposal, many of whom being Longwood school district residents who would likely see a reduction in property taxes, similar to what Port Jeff residents enjoy currently for housing the Port Jefferson Power Station. Environmental groups and other residents opposed the plan, as did Port Jefferson Village Mayor Margot Garant and state Assemblyman Steve Englebright (D-Setauket), who each submitted statements to be read into the record by Cartright against the proposal and urging the board to vote it down June 26.

“The construction of a Caithness II facility will have the inevitable effect of pushing our community off the economic cliff at the end of the proposed period of gradual reductions, while leaving us to deal with an enormous, closed, unusable industrial site which will need serious environmental remediation,” Garant said in her letter read by Cartright. The mayor said she has sent a similar inquiry to the town board as was raised by Cartright regarding the life of the applicant’s special use permit, though has yet to hear back from Brookhaven.

A representative from Sierra Club Long Island, a local chapter of the national nonprofit dedicated to environmental advocacy, spoke out against Caithness II during the June 26 hearing.

“The Sierra Club strongly opposes any attempt to construct a new gas plant on Long Island, and we oppose the Caithness II proposal regardless of the technology involved,” said Shay O’Reilly, an organizer for the nonprofit. “It is absurd to argue that building more fracked gas infrastructure will allow us to meet our clean energy and pollution reduction goals.”

This post was updated July 17 to include comment from Port Jefferson Village Mayor Margot Garant.

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