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Power Plant

Brookhaven Supervisor Ed Romaine and the town board have taken steps that would allow the construction of a power plant in Yaphank, complicating the status of Port Jefferson's LIPA-run plant. File photos by Alex Petroski

It’s one step forward, two steps back for Caithness Energy, LLC in Brookhaven.

After securing a win in its efforts to advance the construction of a 600-megawatt power plant in Yaphank earlier this month, Caithness Energy LLC, an independent, privately held power producer informed by Brookhaven Town its special use permit for the site expired July 15.

The special use permit, initially approved in 2014,  granted Caithness permission to build a power plant on the site, according to Town Attorney Annette Eaderesto. It was granted for two years and  one-year extensions were approved twice, which is the limit under town law.

“We’re looking into it, but believe it has no bearing and we look forward to the next steps before the Planning Board,” Caithness President Ross Ain said in a statement.

The possibility that the permit might have expired was first raised by Councilwoman Valerie Cartright (D-Port Jefferson Station) during a July 12 meeting. She abstained from voting on a motion to lift a restrictive covenant preventing the project’s advancement due to amendments made to Caithness’ original 2014 plans, which included a reduction to the plant’s output capacity and updated technology. The other five councilmembers and Supervisor Ed Romaine (R) voted to remove the covenant.

“They’ll have to file a new application for the special permit and we’ll certainly accept it,” Eaderesto said.
The town attorney noted Caithness still has a pending site plan application before the Planning Board, which would remain as such as a new special use permit is sought.

The proposed project has drawn opposition for its potential environmental impact from groups like Sierra Club Long Island and state Assemblyman Steve Englebright (D-Setauket).

In addition, Port Jefferson Village Mayor Margot Garant has spoken out against the proposal, warning the construction of a second Caithness plant could push her community “off the economic cliff.”

The village has argued a way to make good with Long Island Power Authority over its decreasingly needed plant — and LIPA’s legal contention its Port Jeff plant’s property tax value is over-assessed and has been for years — 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 plan, according to the village.

Port Jeff Village and the town have said a settlement is nearing in an eight-year-long legal fight with LIPA, that will likely result in a gradual decrease in revenue from the plant’s property taxes, which help fund budgets for the village, Port Jefferson School District, the fire department and the public library.

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Extreme low temperatures caused enough demand to require use of the Port Jefferson Power Station. File photo by Erika Karp

In Port Jefferson, the stacks are impossible to miss. They stick up in the sky, visible from Setauket and Port Jefferson Station when not in use. However, when electricity demand spikes, the billowing, white steam coming from the red-and-white, candy-striped stacks of the Port Jefferson Power Station is a sight to behold.

With the emergence of energy-efficient appliances and a general societal shift toward being “green conscious,” the power station is only activated in times of peak electricity demand these days, like when temperatures and wind chills start flirting with zero. From late December into early January, the New York office of the National Weather Service reported that for 13 straight days, ending Jan. 9, the maximum temperature at Long Island MacArthur Airport in Islip failed to exceed 32 F. It was the second longest period of below-freezing temperatures reported at the airport since 1963.

As a result of an Island-wide rush to crank up thermostats everyday from Dec. 27 through Jan. 10, the steam-powered electrical generation station was ready to go, serving as an addendum to the Island’s regularly used energy production. In 2017, the Port Jeff plant was operated for 1,698 hours through November, with an additional 260 hours of run time needed in December, according to Sid Nathan, director of public information for the Long Island Power Authority, which oversees operation of the station.

When running, its two steam units produce the white clouds or water vapor, which is a byproduct of burning oil or gas. As the vapor exits the stacks, contact with colder air causes condensation of the water vapor, producing the cloudlike white color. The two steam units ran for 1,958 hours in 2017, the equivalent of running for 41 days, or 11 percent of the year, Nathan said. The power station has the ability to generate about 400 megawatts of power.

The historic stretch of cold temperatures definitely generated an unusually high energy demand at the station, according to Nathan.

“Generally, on a typical 35 degree day, PSEG Long Island would not expect to dispatch the Port Jefferson plant,” he said.

For those concerned about the white steam yielded by the energy generation process, Nathan said the station is not producing more or different steam than normal and that the byproduct is more visible at extremely low ambient temperatures.

“There is no cause for concern,” Nathan said.

State Assemblyman Steve Englebright (D-Setauket) said the white smoke is mostly steam that could potentially contain particulates other than steam, and he reiterated residents shouldn’t be overly concerned. Although Englebright did say it would be “prudent to try to separate yourself from the atmospherics of the plant.”

As a North Shore resident and chair of the Assembly Committee on Environmental Conservation, Englebright said he was thankful the plant was ready to roll when needed most.

“Yes, during most of the year they are not in use,” Englebright said, of the stacks. “But when we really need it, it’s there. And we really needed it just in this cold spell and it went into high operation. Thank God it was there.”

The Shoreham power plant on North Country Road provides peak power to the community and payments in lieu of taxes to the Shoreham-Wading River school district. Photo from Jason White

A Brookhaven organization recently saved energy in the most literal sense, and a reliable revenue stream too.

The Town of Brookhaven Industrial Development Agency (IDA) announced Nov. 27 it prevented the shutdown of an electric-generating plant in Shoreham, which provides peak power to the community and is expected to contribute $852,000 in property taxes or payments in lieu of taxes, commonly known as PILOTs, to the Shoreham-Wading River school district this year.

Brookhaven’s business arm has entered into a new, 20-year PILOT agreement with owners of the 90 megawatt, jet-fueled facility located on 10 acres of land on North Country Road, leased by the Long Island Power Authority. The facility’s previous PILOT and power purchase agreement between LIPA and Brookhaven expired this past August after 15 years.

In the proposal for the PILOT, which became the adopted policy when it was approved by the IDA in January 2017, projected gradual benefits range from $1.2 million in its first year to $1.7 million in its 20th.

The partnership began in September 2016 when members of J-Power USA — owners of the facility since 2010 — realized the expired pact would bring about a 33 percent reduction in revenue and a 50 percent reduction in economic benefits. The members were also told by LIPA representatives that the nonprofit would not be involved in negotiating a new PILOT.

“We wanted to see if Brookhaven would be able to offer a new PILOT that would  allow us to remain financially viable and our agreement has removed that big uncertainty,” said Jason White, director of asset management at the J-Power Shoreham branch. “Our facility uses General Electric combustion
turbines and while it doesn’t operate a lot, it’s important to the electric grid for stability purposes. It’s maintained so that it can respond very quickly if it’s called upon.”

White said although there had to be consideration to disassemble the power plant and move off Long Island in the case an agreement couldn’t be reached, it wouldn’t be a simple process, and the facility’s six
employees live close by.

“Our preference all along was to continue to operate the plant site and to continue to be a contributor to the local community,” White said.

By securing the power plant’s place in Shoreham, revenue is boosted for the school district, which relies heavily on it as a source of both energy and property tax revenue.

“I am pleased that we have been able to close on this new agreement with J-Power,” said Frederick Braun, chairman of the IDA. “Had we been unable to keep this plant from moving off Long Island with this new agreement, the Shoreham School District and other taxing jurisdictions would receive no payments at all, resulting in an even larger loss to those taxing jurisdictions.

The school district, which included the finalization of $852,000 in PILOT revenue in its Revised and Lowered Expenditure Budget & Tax Levy in October, approved the agreement in a resolution during a board meeting last Jan. 10.

“Be it resolved that the Board of Education of the Shoreham-Wading River Central School District supports the proposed financial assistance contemplated by the Brookhaven Industrial Development Agency in connection with the J-Power Peaker Plant,” the letter read.

Lisa Mulligan, the IDA’s chief executive officer, said she had been in contact with the district’s board of education since meetings began with J-Power “as they were the most impacted by this.”

“We didn’t want to pursue something if they were not interested in it,” Mulligan said. “But the board wrote to us and told us they were … I think it’s important to bring money into the school district and also provide this power to residents when it’s needed.”

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The Port Jefferson power plant sits along the edge of Port Jefferson Harbor. Photo by Elana Glowatz

A provision in the new state budget sets aside $30 million that could support communities where a power plant has closed and stopped paying property taxes.

According to the budget bill that state lawmakers agreed upon last week, that sum would be available for a local government, school district or special district — such as a library or fire district — where an electric generating facility has stopped operating, causing a reduction of at least 20 percent of the money it owed through property taxes or payments in lieu of taxes, commonly known as PILOTs.

There are limits to the provision, however: The bill says the New York State Urban Development Corporation will distribute the relief funds on a first-come, first-served basis and will not offer the support to a specific group for more than five years. Additionally, in the first of the five years, the corporation will not award funding equal to more than 80 percent of the local entity’s lost revenue.

Port Jefferson Village could possibly be on the receiving end of some of the $30 million in the pot, dubbed the “electric generation facility cessation mitigation fund.” That community’s power plant — which company National Grid owns and operates, and sells the power generated to utility PSEG Long Island for distribution — is old and runs on antiquated technology. For the past several years, village residents have waited to learn the fate of the plant, whether it will be reconstructed to keep serving Long Island or dismantled.

A lot hangs in the balance for the plant’s neighbors: Property taxes from the site fund more than 40 percent of the local school district’s budget and a significant portion of the Port Jefferson Village budget.

“We’d soak up a lot of it,” village Trustee Larry LaPointe said about the relief fund, noting that his government’s budget gets about $1 million in property taxes from the local power plant in addition to the school district’s hefty share. “But we certainly appreciate any efforts” to help mitigate the impact on the community.

The state budget provision specifies that local entities seeking assistance, once a power plant’s owner serves official notice it plans to retire the facility, will be helped in the order they apply for relief, but only after the facilities go offline. The urban development corporation will decide the amount of the annual assistance payments based upon how much revenue is lost.

Port Jefferson schools currently get more than $18 million from the plant, between taxes and PILOTs. Superintendent Ken Bossert said, “We are hoping that a resolution can be found that will not place an unfair burden on the home and business owners … in order to maintain the excellence of the school district.”

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Extreme low temperatures caused enough demand to require use of the Port Jefferson Power Station. File photo by Erika Karp

Port Jefferson Village moved another chess piece in its match against the Long Island Power Authority last week, filing a lawsuit to dispute the utility’s property tax challenges from the last few years, which are still pending in court.

Village Attorney Brian Egan said at the board of trustees meeting Tuesday night that the village filed the lawsuit last Friday contending LIPA had promised not to challenge its property tax assessment at the Port Jefferson power plant unless the assessment was disproportionately increased.

That perceived promise links back to a 1997 letter from former LIPA chairman Richard Kessel, upon inking a power supply agreement between LIPA and the Long Island Lighting Company, as the former was taking over for the latter. That agreement covered power plants now owned and operated by energy company National Grid, which includes those in Port Jefferson and Northport.

Back then LIPA and local municipalities were embroiled in other tax assessment challenges. Kessel’s letter said the utility would drop those challenges and would not “initiate any further tax certiorari cases on any of their respective properties at any time in the future unless a municipality abusively increases its assessment rate.”

Port Jefferson has actually gone in the opposite direction on the neighborhood power plant’s assessment, officials confirmed Tuesday — LIPA’s assessment was only proportionately increased over time, and since it began challenging its assessment in 2010, it has in fact seen a decrease. Officials called that 10 percent decrease an act of good faith as they negotiated with the utility on the matter.

At the heart of the issue is a disagreement over the worth of the local power plant: LIPA contends it is grossly overassessed, forcing the utility to pay more in property taxes than it should.

The power plant is a large source of tax revenue for the area, particularly the Port Jefferson school district and the village. Smaller stakeholders include the Port Jefferson fire and library districts and the Town of Brookhaven.

As LIPA’s property tax challenges trickle through the court system, Port Jefferson’s latest lawsuit piggybacks on an idea from out west — Huntington Town and the Northport-East Northport school district filed a similar suit a couple of years ago in their battle on the Northport power plant, which mirrors the situation in Port Jefferson. That inceptive lawsuit, challenging LIPA’s ability to challenge its property tax assessment, faced a motion to dismiss that New York State’s highest court recently denied — allowing the case to play out. Seeing the ruling in favor of Huntington and Northport, Port Jefferson followed suit.

“I feel very strong,” Egan said about the case.

According to the village attorney, he will ask that court action on LIPA’s tax challenges be delayed until the new lawsuit is resolved.

The Port Jefferson and Huntington area lawsuits may also be joined, and it is possible more plaintiffs, such as Brookhaven Town and the Port Jefferson school district, could jump in.

At the time the courts denied LIPA’s motion to dismiss Huntington Town and the Northport school district’s lawsuit, a LIPA spokesperson said the utility does not comment on ongoing litigation.

If the municipalities win their lawsuits regarding LIPA’s right to challenge its property tax assessments, those pending challenges would be thrown out.

State appellate court sides with municipalities in rulings

The Northport power plant. File photo

Huntington Town and Northport-East Northport school district’s fight to knock the lights out of a Long Island Power Authority lawsuit that looks to drastically decrease how much the utility pays in taxes on the Northport power plant recently got a big boost.

Last week, a New York State appellate court ruled in favor of the municipalities, clearing the way for both to go to trial against the utility and engage in pretrial depositions and discovery. In 2010, LIPA filed a tax certiorari lawsuit against the town, claiming the town greatly over-assessed the Northport power plant and that it should be paying millions less in taxes.

Northport-East Northport schools, along with Huntington Town, filed companion lawsuits in May 2011 that claimed LIPA didn’t have the right to file to reduce its taxes and that it breached a 1997 contract promising it wouldn’t. In 2013, a New York State Supreme Court justice upheld the district and town’s rights to sue LIPA and National Grid, and last week’s court ruling upheld that lower court ruling.

LIPA sought to have the school district tossed out of the suit, but the district claimed it was a legal third-party beneficiary of a 1997 power supply agreement between LIPA and the Long Island Lighting Company. Last week’s court ruling upheld that claim. It cites a 1997 letter from LIPA to the Nassau-Suffolk School Boards Association, to which Northport-East Northport belongs, that upon the issuance of a 1997 power supply agreement, “LIPA will immediately drop all tax certiorari cases against all municipalities and school districts,” and that “neither LIPA nor LILCO will initiate any further tax certiorari cases on any of their respective properties at any time in the future unless a municipality abusively increases its assessment rate,” as “spelled out in the [PSA].”

Stuart Besen, the town’s attorney on the case, said he believes the letter from Richard Kessel, former chairman of LIPA, was integral in swaying the judges to rule in favor of the municipalities.

“I just think that Supervisor [Frank] Petrone really deserves a lot of credit for having the foresight for one, making sure the clause was in the [power supply agreement], and two, demanding that Richard Kessel reiterate that position in a letter.”

If successful in the suit, the town wouldn’t have to pay approximately $180 million in taxes the utility claims it overpaid in a three-year period, Besen said. LIPA pays roughly $70 million in taxes on the Northport power plant, town officials have said.

The utility contends the plant is worth less than 11 percent of the value reflected by its current assessment. If LIPA was successful in lowering its assessment and thus the amount it pays in taxes, town residents could be hit with tax increases of up to 10 percent. Those who live in the Northport-East Northport school and library districts could get a whopping 50 percent increase in their taxes.

John Gross, senior managing partner at Ingerman Smith, who represents the school district in the case, said the next step is to move forward with discovery and a motion for summary judgment in favor of the district.

“And if we win that, that means the claims they made to reduce the value of the plant are thrown out,” Gross said in an interview on Tuesday.

The town and the school district are partners in the lawsuit, Gross said.

Asked what town taxpayers should take away from the development, Besen said “that the town is fighting.”

“The town is fighting a big entity, both National Grid and LIPA. But we feel we’re right. We feel that those three years we don’t have to pay, that LIPA and National Grid made a promise to the people of Huntington and the town is going to do everything possible legally to uphold that promise.”

Sid Nathan, a spokesman for LIPA, said the authority couldn’t comment on ongoing litigation.

The Northport power plant. File photo

A new Huntington Town citizens group will boost a movement to upgrade the Northport power plant, independently studying the issue and submitting ideas to town officials.

The town board, on Tuesday, unanimously supported a measure co-sponsored by Huntington Town Supervisor Frank Petrone (D) and Councilman Mark Cuthbertson (D) to create the Repower Now Citizens Committee, a group of nine who will weigh in on an analysis the Long Island Power Authority and National Grid are conducting with respect to repowering, or upgrading, the plant.

Earlier this year, the state charged LIPA and National Grid with studying the feasibility of repowering the Northport power plant, the Port Jefferson power plant and others. Having the Repower Now Citizens Committee can only boost that effort, Cuthbertson and Petrone said in interviews with reporters after Tuesday’s meeting.

Local leaders want to see the aging Northport plant repowered so it will remain a source of energy and property tax revenue for years to come. Several local budgets, including that of the Northport-East Northport school district, rely heavily on the tax revenue.

Upgrading the Northport power plant can be done, Petrone said. It will be the new group’s responsibility to support repowering by producing a factual analysis on the issue.

“Our plant is probably the most viable plant to be utilized for that,” Petrone said, explaining Northport’s advantages in being repowered. “It has property available and it can be expanded. The need now is to put together a group to basically put some kind of study together … to support this. And there are many people out there that have expertise that we would wish to tap.”

Membership would include at least one person each from Northport and Asharoken villages, someone from the Northport-East Northport school district and members with engineering and sustainable energy backgrounds.

Repowering has another benefit: It may help settle a lawsuit LIPA brought against the town, challenging it over the value of the power plant.

LIPA claims the plant has been grossly over-assessed and the utility has overpaid taxes to the town. If LIPA’s suit is successful, the judgment could translate into double-digit tax increases for other Huntington Town and Northport-East Northport school district taxpayers.

If, however, the utility chooses to repower by upgrading the facility, the town has offered to keep its assessment flat, preventing those skyrocketing taxes.

“It’s a lawsuit that’s a very, very high-stakes lawsuit,” Cuthbertson told reporters after the meeting. “We have to look at both legal and political solutions, and political being through legislation. This is a part of trying to formulate a legislative solution and come up with a compromise that we might be able to work through.”

Petrone said he hopes to have the repowering citizens group assembled within a month.

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

A clerical item on the Brookhaven Town Board’s agenda regarding Caithness Long Island II, a proposed Yaphank power plant, caused a stir among some Port Jefferson residents on Thursday, as they questioned what exactly the board was voting on.

Earlier in the week, Supervisor Ed Romaine (R) predicted the issue at a Monday work session meeting. The item — accepting documentation about covenants and restrictions at the project site — was included under the board’s Communication Consensus agenda. Romaine said the town received correspondence that the information was filed with the Suffolk County Clerk’s Office, and the board had to vote to accept it. He added that the Town Board was not trying to sneak anything by residents.

“We have to list correspondence that we receive,” he said Monday.

Last July, the Town Board granted Caithness Long Island II a special permit for its proposed 752-megawatt power plant. Romaine and Councilwoman Valerie Cartright (D-Port Jefferson Station) remained in the minority and voted against the permit.

Some Port Jefferson residents adamantly oppose the project, as they fear it could negatively impact the chances of the Port Jefferson power plant being upgraded. Critics allege the Caithness project’s environmental impact statement was flawed and didn’t adequately address impacts on the surrounding communities and species living near the property, which is adjacent to an existing 350-megawatt Caithness power plant.

At Thursday’s meeting, standing together in the minority as they did on the special permit vote, Cartright and Romaine voted against accepting the Caithness communication. Cartright said the project should be re-evaluated, as PSEG Long Island has stated there will be sufficient local energy capacity until about 2020, and thus there is no need for Caithness II.

“In light of that fact, it appears to me that the [environmental review] process was based on an erroneous premise, as the original … findings for this project were in part based on an additional need of power,” she said.

During public comment, Port Jefferson Village Trustee Bruce Miller expressed his frustration with the Town Board granting the special use permit and with how backup documents, which officials said are available at the town and county clerk’s offices, weren’t provided with Thursday’s agenda.

Miller said he sympathized with Medford residents, some of whom attended the same meeting to advocate against a proposed casino in their neighborhood.

“Only two people on this board are voted for by the people from Port Jefferson,” he said, referring to the supervisor and the councilwoman, “and yet the rest of the board members can vote with impunity against us and against our interests.”

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