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Residents file into Northport High School to speak out over LIPA's power plant. Photo by Donna Deedy

By Donna Deedy

More than 500 residents joined forces in the Northport High School auditorium March 16 to challenge the Long Island Power Authority. The quasi-governmental agency is seeking through the courts a 90 percent reduction in the approximately $82 million in annual property taxes it pays to the Town of Huntington for the Northport power plant. 

A number of Northport residents were galvanized to take action. Paul Darrigo, a local commercial banker with Capital One, launched a new Facebook page, Concerned Taxpayers Against LIPA.

“We now have 1,200 members and are still growing at a rate of 15 members per hour,” Darrigo said. 

LIPA states in its report, “2019 Fair Property Taxes for Electric Customers,” that New York charges more of the cost of government on utilities than other states. As a result, the not-for-profit entity alleges that it’s overassessed for its aging assets. 

“I am advocating for the governor to support my two initiatives to provide Long Island residents with $139 million in state aid to communities impacted by tax certiorari issues.”

— Jim Gaughran

“The plant’s units were built in 1967 and 1976 and its technology is outdated,” LIPA spokesman Sid Nathan said. The plant operates at 12 percent capacity today compared to 54 percent capacity in 1999, a 78 percent decline. 

The tax reductions LIPA seeks will reportedly be used to reduce customers’ electric bills.

Gordian Raacke, executive director of nonprofit advocacy group Renewable Energy Long Island, stated by email that he agreed. 

“All LIPA customers pay more than would be the case if the properties were assessed at fair value,” he said. 

But many Town of Huntington residents aren’t buying into what they call more empty promises. 

If LIPA’s case is successful, as the agency has been in previous cases, critics say it could inflict a major economic blow to the community. Northport schools would annually loose an estimated $49 million out of some $54 million it receives from LIPA, according to district’s attorney John Gross.

To compensate for the loss, the Town of Huntington states on its website that residents would be forced to pay higher property taxes.

New York State Sen. Jim Gaughran (D-Northport) organized the town hall meeting to answer questions and to let the community know that he aims to seek funding to soften the blow if LIPA’s case prevails. His legislative bills, however, would require the approval of state lawmakers and Gov. Andrew Cuomo (D). The state senator said he’s working to build consensus in Albany, but urges citizens to contact elected officials at all levels of government to encourage cooperation in the battle. 

“I am advocating for the governor to support my two initiatives to provide Long Island residents with $139 million in state aid to communities impacted by tax certiorari issues,” he said. “I am fully supportive of the town and school district in continuing their fight against LIPA.” 

The situation raises questions about how education is funded in New York state. However, many community members question why National Grid and PSEG aren’t bearing tax liabilities when shareholders are earning dividends. National Grid, a business based in the United Kingdom, owns the Northport plant and operates under contract to LIPA; PSEG Long Island manages transmission and distribution for LIPA. 

Gaughran said that he’s looking into reforms that ensure the public’s interest is properly represented.

“Local communities should not be bankrupt by runaway authorities like LIPA,” he said.

“I love this place, but if I can’t afford to pay my bills what good is it.”

— Joseph Sabia

Northport resident Michael Marcantonio was among people who spoke during the meeting. Now a lawyer specializing in mergers and acquisitions, corporate governance and hostile takeovers, the Northport High School graduate blames the problem on the government’s practice of using public funds to bail out shareholder-owned businesses. LIPA, he explained to the crowd, was formed when officials used the public’s money to buy all the debt and some of the assets of the Long Island Lighting Company after it mismanaged the Shoreham nuclear project, which
ultimately failed. 

“This is what corruption looks like,” Marcantonio said. “Do not trust LIPA, they are robbing us, and we need to fight this.” The Northport resident ran for the state’s 12th Assembly District in 2018, largely on the LIPA issue, but he was forced to drop out due to a court decision over him voting locally in 2012 and 2014 while a student at Duke University Law School in North Carolina.

Newspaper reports from 1998 show that the now defunct Bear Stearns, the investment firm involved in the subprime mortgage crisis, served as the state’s financial adviser for the LILCO bailout, before quitting to successfully bid and broker the deal’s bond offering. At $7 billion, it became the largest public offering for municipal bonds in U.S. history.  

The LILCO deal was originally promoted publicly as a 20 percent rate reduction plan, as reported in the May 28, 1998 New York Times article titled “The End of LILCO, as Long Island has come to know it.” Long Island ratepayers reportedly paid the highest electricity bills in the nation at the time. As details began to surface, critics found the scheme entailed delaying interest payments on the debt and permanently saddled ratepayers with 33 years of liability.

Nicole Gelinas, a senior fellow at the think-tank Manhattan Institute wrote a 2013 op-ed piece in Newsday titled “Long Islanders are still paying for three bailouts.” The policy analyst explained that Long Islanders need to understand the past mistakes related to the bailouts to prevent similar situations in the future. 

LIPA restructured part of its debt in 2013. That plan, as reported in Newsday, aimed to reduce the cost of debt, instead of paying it down.  

LIPA reports today that customers pay 10 percent in debt reduction and another 10 percent goes in interest. An additional 15 percent of a LIPA bill pays taxes and other fees. LIPA’s report does not specify what those other fees are. 

“Do not trust LIPA, they are robbing us, and we need to fight this.”

— Michael Marcantonio

Business leaders, who also spoke at the meeting, urged others to join the Northport Chamber of Commerce. School board members passed out red business cards instructing residents to visit STOP LIPA NOW on Facebook and get involved.  

LIPA states in its report that it ensures it’s working on all customers behalf to lower tax bills on its power plants and other equipment to reflect their fair value. It estimates the plant tax valuation at $200 to $500 million. Huntington assessed the value on the tax code at $3.4 billion.

The plant sits on some 244 waterfront acres near Asharoken, which LIPA estimates is worth “roughly $50 million.”

“We are confident that the court will agree that the Northport power plant is accurately assessed,” said Nick Ciappetta, Town of Huntington attorney. 

For people like Northport resident Joseph Sabia, the situation has become unbearable. 

“I love this place, but if I can’t afford to pay my bills what good is it,” he said.

The original article had the wrong first name for Sen. James Gaughran. We regret the error.

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Northport power plant. File photo

The Town of Huntington and Long Island Power Authority have finally made their opening statements in a court trial that has been more than eight years in the making.

Huntington town officials, LIPA and National Grid are presenting their arguments over the proper tax-assessed value of the Northport Power Station beginning Feb. 25 before Justice Elizabeth Emerson at Suffolk County Supreme Court in Riverhead.

LIPA filed its tax certiorari case over the assessed property tax valuation of the Northport plant in 2010 seeking to reduce its annual taxes by 90 percent, in addition to repayment of all taxes it claims to have overpaid since 2010 — currently more than $550 million.

“It doesn’t differ all that much from when you grieve your property taxes, but this is on a much bigger scale.”

— Nick Ciappetta

Huntington Town Attorney Nick Ciappetta said all parties have agreed to start with the bench trial, decided solely by Emerson, by challenging the taxes paid on the plant in 2014.

“Even though they have filed petitions to challenge every year beginning in 2011, they have to file petitions individually for each year,” the town attorney said.

Ciappetta said that the burden of proof to demonstrate that the Town of Huntington tax assessor’s assessed value of the plant was incorrect lies with the utility company. LIPA will need to provide documents and expert testimony that convinces the judge that Huntington was in error, according to the town attorney.

“It doesn’t differ all that much from when you grieve your property taxes, but this is on a much bigger scale,” Ciappetta said.

LIPA started the trial with its opening statement and by calling on two expert witnesses for testimony Feb. 25. The Huntington town attorney said he expected the utility company to call on two additional expert witnesses to the stand to testify on its behalf before the town responds.

“We feel good about our position and that LIPA will not be able to sustain their burden,” Ciappetta said. “They have an appraisal that makes the plant seem as if it is worthless. That plant is vital to Long Island’s power grid.”

The Huntington town attorney said the town’s legal arguments will highlight how the Northport Power Station is unique given its “ideal location” and several factors, including its ability to operate based on either gas or oil, and is believed to be fundamental to meeting electrical demands during severe weather events.

“We feel good about our position and that LIPA will not be able to sustain their burden.”

— Nick Ciappetta

The trial is open to the public and any who wish to observe the proceedings or listen to the arguments are welcome to the Riverhead court room, located at 1 Court St.

LIPA did not respond to request for comment on the ongoing court proceedings.

Ciappetta previously stated although the Town of Brookhaven settled its case with LIPA earlier this year, he does not believe that agreement will have any impact on Huntington’s case.

While six months of mediation between the town, LIPA and National Grid under their hired third-party arbitrator attorney Marty Scheinman has not yet resulted in a settlement, it remains a probable outcome according to Ciappetta.

“There’s always the possibility it will settle,” he said.

The court trial proceedings, if not wrapped up this week, will continue in April.

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Northport power plant. File photo

New York State and town officials are renewing their calls for changes to be made to Long Island Power Authority’s operations as the trial over the tax-assessed value of Northport Power Station is slated to begin Feb. 25.

State Sen. Jim Gaughran (D-Northport) reintroduced legislation Jan. 31 that called for LIPA to be restructured so that eight of the utility company’s nine board members would be elected by public vote, among other changes.

“I don’t believe LIPA’s board as it exists offers any protection to the citizens of Long Island,” he said. “I think it needs to be scrapped and replaced.”

““I don’t believe LIPA’s board as it exists offers any protection to the citizens of Long Island.”

— Jim Gaughran

Assemblyman Fred Thiele Jr. (D-Sag Harbor) has partnered with Gaughran to sponsor the bill in the state Assembly. The concept of the ratepayers protection act was first introduced in February 2017 by Sen. Ken LaValle (R-Port Jefferson) and Thiele, co-sponsored by a coalition that included state Assemblyman Andrew Raia (R-East Northport). Those early bills failed to ever make it the Legislature’s floor for a vote.

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 size based on the last U.S. Census by May 1, 2021. 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 2021. Candidates on the ballot would not be chosen by the political parties, and those elected would not be paid but could be reimbursed from the state for their related expenses, according to the draft.

In addition, the 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.

“I promised the residents of his district once elected, I was going to hold one of my first town halls on this — a town hall in Northport to drill down and deal with the issues of LIPA,” Gaughran said.

He will hold a town hall-style forum 10 a.m. March 16 in Northport High School’s auditorium with town and school district officials present to answer questions and review various options moving forward with LIPA, including the ratepayers protection act.

“We are encouraged to hear this legislation is being reintroduced, as it will provide the oversight and transparency needed to restore residents’ confidence in LIPA — ensuring that the best interests of the ratepayers are served,” Huntington spokeswoman Lauren Lembo said.

Huntington’s town board also voted unanimously Jan. 29 to petition its elected officials to amend state law to allow the Town of Huntington and Northport-East Northport school district access to the state’s Electric Generating Facility Cessation Mitigation Program funding in case LIPA is successful in getting the Northport power plant’s annual taxes reduced, as well as to put more money into that state fund. This bill also failed to find sufficient support to pass the state Legislature last year.

“We’ve reviewed the Brookhaven settlement and found it to be irrelevant to our case.”

— Nick Ciappetta

The tax certiorari case is slated to begin trial Feb. 25. While the town and Northport school district have entered nonbinding mediation with five sessions being held to date, according to Lembo, an agreement has not been struck.

In contrast, the Town of Brookhaven formally settled its lawsuit with LIPA over the Port Jefferson power plant Dec. 14 agreeing to decrease taxes on the plant 50 percent incrementally over the next nine years.

“We’ve reviewed the Brookhaven settlement and found it to be irrelevant to our case,” Huntington Town Attorney Nick Ciappetta said. “The Brookhaven agreement has nothing to do with the Northport power plant.”

Ciappetta cited what he believes are several key differences between the Northport and Port Jeff stations: Northport’s output capacity is four times larger, it is a dual-fuel plant that is capable of operating on both natural gas and oil, and that its operation is vital to helping maintain the state’s power capacity requirements.

Gaughran said he is willing to review and support any state legislation which may aid Huntington and Northport in their ongoing legal battle with LIPA and National Grid.

“It’s clear that everyone has to continue to fight this,” he said. “We can’t be preparing to lose. Everyone must continue to fight — it’s too important.”

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Deputy Superintendent Sean Leister. Photo by Kyle Barr

While the Port Jefferson School District is preparing its budget for the 2019-20 school year, the shadow of LIPA still hangs over the small school district.

Superintendent Paul Casciano said the LIPA outcome, at least in terms of drafting next year’s budget, was not as bad as it could have been. 

“It was translated by the town to be on the assessment rather than our payments,” he said. “With the glide path it gets more challenging later on, but we have time to make adjustments.”

“With the glide path it gets more challenging later on, but we have time to make adjustments.”

— Paul Casciano

In December 2018, the Town of Brookhaven settled with LIPA over the tax assessment of the Port Jefferson power station whose white and red smokestacks can be seen almost anywhere near the harbor. LIPA filed a lawsuit almost a decade ago against both Brookhaven and the Town of Huntington saying its plants in Port Jeff and Northport have been overassessed by millions of dollars and were seeking a 50 percent reduction. The settlement decision agreed to lower LIPA’s assessments by 50 percent over a nine-year period from $32.6 million to $16.8 million starting with the 2017-18 tax year.

Even after the settlement, district officials said the Port Jefferson School District would have the second lowest school tax rates compared to others in Brookhaven Town, only being beaten by Riverhead. The district, going into the ninth year of the settlement, would have a tax rate approximately 100 less than the average of non-Port Jefferson school rates, according to the district.

The school district, along with several village residents, feared what a 50 percent reduction could do to school taxes. Casciano, along with Deputy Superintendent Sean Leister, hosted a special meeting for district residents where they estimated a tax rate of 159 in the 2019-20 school year, and an estimated 243 by the 2026-27 school year.

If local revenues remain flat and with their expected tax levy cap sitting at 1.18 percent, the district expects their current $43.9 million budget will adjust to a $44.1 million rollover budget next school year, an increase of $232,930 if the district maintains all current programming and staff. The current school tax levy — the money a school makes in local area taxes — of $36,434,479 would jump to $37,075,627, more than the schools expected 1.2 percent tax cap.

Leister said this would mean reductions, but the district is currently in the process of creating the upcoming school year’s draft budget.

“We haven’t identified those reductions yet,” Leister said. “We are going to take the next few weeks to see if it can be done through efficiencies: We have to identify what our enrollment looks like, what our student interest looks like and what our scheduling looks like.”

Casciano said this difference is minimal, and it can be made up on the school’s end by tighter budgeting.

“If the community stays in support of the district, it won’t be as dramatic,” the superintendent said. “If the school has to absorb the entire cost of the tax loss, it will be.”

“A cynic would look at it and say you’re just trying to dampen any resistance in the short term and pushing it back.”

— Todd Pittinsky

Before news of the settlement, residents had proposed that the district combine with other area districts, but Leister said that combining with a district like Comsewogue or Mount Sinai would overall increase tax rates. Port Jefferson’s estimated tax rate in the 2019-20 school year is 159 compared to Comsewogue’s 262, assuming an annual levy increase of 2 percent, or under the New York State tax cap.

While the difference is minimal for this school year, the district said the glide path of LIPA’s assessment reduction ramps up over time. While the 2020-21 and 2021-22 school years see a 3.5 percent reduction, later years show reductions going up to 7.5 and 8.25 percent.

Todd Pittinsky, a Port Jeff resident and professor in the Department of Technology and Society at Stony Brook University, said it would behoove the district to think long term when it comes to the reductions over time, and not make those cuts more drastic when the reductions start to increase dramatically.

“A cynic would look at it and say you’re just trying to dampen any resistance in the short term and pushing it back,” Pittinsky said. “I would hope that the effort is one-eighth each year. The formula you are using is going to push back the pain of dislocation or relocation, and it would be very easy to think that other decision makers will be in this role.”

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Eastern Suffolk BOCES CEO Julie Lutz speaks to residents. Photo by Kyle Barr

Who would be Port Jefferson’s perfect superintendent?

It’s a question of priorities, according to Eastern Suffolk BOCES CEO Julie Lutz, who hosted a public meeting Jan. 3 at the Port Jefferson High School asking residents what they would like to see in a new PJ superintendent once Paul Casciano, the district’s current superintendent, vacates his position July 1. 

“A superintendent’s job is to work at the direction of the board, and to organize his or her cabinet to implement the business and instructional practices of the district,” Lutz said. “He’s or she’s the voice of the district to the community, he’s basically responsible for everything that happens.”

‘We need to keep us as a school district of excellence, not cutting programs or anything like that.’

— Arnold Lustig

Twenty-four people applied for the superintendent position through the month of December while the position was being advertised, according to Lutz. BOCES and the Port Jeff school district are still currently screening interviews. All candidates require a School District Leader state-level certificate, and while around half of all superintendents in the Eastern BOCES area have doctorates, it is not required for the job.

Lutz guided a conversation among around 20 Port Jeff residents who came to the meeting about what residents wanted from a superintendent from the perspective of personality and professionalism.

Longtime Port Jeff resident Arnold Lustig said he is currently satisfied with how Casciano has handled the district as of late, and he wants the new superintendent to continue in that.

“We need to keep us as a school district of excellence, not cutting programs or anything like that,” Lustig said.

Karen Sullivan, the president of the Port Jefferson Special Education Parent Teacher Association, said the district is different than other schools across Long Island due to its small class size and its large amount of retirees who live within the district. She said she would want a superintendent willing to reach out to the different segments of the village population.

“We’re an anomaly,” Sullivan said. “If that person can meet with all the stakeholders besides just the parents in the district we would be better for it.”

Leza DiBella, the president elect of the PJSEPTA, said the district is well known in the area for taking special education to heart, and she hopes that will continue with a new superintendent. Other community members agreed a new superintendent should not pay sole attention to high achieving students or students who need the most assistance, but those students in the middle of the pack could also use that consideration.

“This is a district handpicked by residents known for being inclusive and welcoming,” DiBella said.

‘If that person can meet with all the stakeholders besides just the parents in the district we would be better for it.’

— Karen Sullivan

Some in the meeting said they wanted the new superintendent to have had classroom experience, while others asked that he or she should have a strong business sense to handle the district’s finances.

Port Jeff resident Bob Gross, whose child is currently enrolled in the district, said he would want continuous improvement in the school district, whether it’s renovating some of the aging school buildings or building upon current programming, though he was concerned if the district will be able to finance these improvements or pass its budget due to recent events at the end of 2018.

The Town of Brookhaven and the Village of Port Jeff settled a lawsuit with the Long Island Power Authority over the Port Jefferson power station’s tax assessment. The effects of the lawsuit will reduce the $32.6 million tax assessment by 50 percent incrementally over the next nine years to $16.8 million, starting with the 2017-18 tax year. 

The school district is still analyzing what the overall impact on the community could be, but Casciano said at the time residents should expect a tax increase, and the decreased funds the district will receive from LIPA could result in programming being slashed.

Lustig said while many in the district remain concerned over how the LIPA decision might impact them, it’s time to move forward.

“The LIPA issue is done, in fact, it’s no longer an issue,” he said. “The tax rate will go up, and we may be comparatively taxed compared to other local districts. We have to decide what we are going to do to keep the school moving along.”

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The LIPA plant as seen from Harborfront Park. Photo by Kyle Barr

A New York State Supreme Court judge approved the Town of Brookhaven’s settlement with the Long Island Power Authority over the Port Jefferson Power Station’s tax assessment. 

In the agreement signed Dec. 14, the $32.6 million tax assessment on the power plant will be reduced by around 50 percent incrementally over the next nine years to $16.8 million, starting with the 2017-18 tax year.

It’s a not-so-final finale to what has become years upon years of grinding legal battles and anxiety over what will happen to local taxes should LIPA, which claimed its power plant has been overassessed by hundreds of millions of dollars for nearly a decade. LIPA’s lawsuit wanted its assessments reduced by
approximately 90 percent.

Town of Brookhaven Supervisor Ed Romaine (R) said in a statement the settlement will benefit Brookhaven in the form of lower electric bills.

“This deal puts an end to the uncertainty of this plant over the course of nine years and gives finality to this issue,” Romaine said. “I have always believed that all property assessments should be fairly based on property value.”

Brookhaven officials said that without a settlement, taxpayers faced the potential of being liable for $225 million to LIPA, and the power authority has said LIPA customers will save a total of $662 million by 2027.

“It was a reasonable settlement, one we can justify to our 1.1 million customers,” LIPA CEO Thomas Falcone said.

While this settlement promises savings for Brookhaven residents, the agreement has made Port Jefferson residents, especially those living close to the two red-and-white smokestacks, question what their taxes will look like in the near future. In October the Port Jefferson School District released a series of slides showing they annually received a $17 million payment through LIPA’s tax payments, but this would be reduced to $13.8 million by 2027. While Superintendent Paul Casciano said he and his staff are still reviewing the impact of the settlement, he sees the outcome could be even worse. He expects school programs will have to be cut in the next few years, with tax increases for residents.

“It’s going to affect the tax base,” the superintendent said. “Even if our budget was voted down, there’s a high likelihood that residents will see a
double-digit increase in their tax rate.”

The settlement will also require the district to amend their plans for the 2019-20 budget next year.

Falcone said the school district already enjoys lower annual school taxes at $6,273 compared to neighboring districts calculated at little more than $10,000 based on 2015 tax data.

“It means they will go from a ‘great deal’ to a ‘good deal,’” Falcone said. “They’re still going to have the lowest taxes of their neighborhood.”

The CEO added that it was unfair for the rest of LIPA customers to have to subsidize the Port Jeff school district through their higher bills.

“I think at some point you have to say what’s fair for those 1.1 million other customers because they pay their school taxes, too,” he said.

The Port Jeff superintendent said the village has been conciliatory about letting a power plant operate within its boundaries, whereas other places in Brookhaven would have barred the plant from existing in the first place.

“Are you, as a Brookhaven resident, really going to make out on your LIPA bills? I doubt it,” Casciano said. 

In April Port Jefferson Village board passed its 2018-19 budget of $10,642,146, about $233,000 up from last year’s budget. The new budget included $107,000 in reserve funds in anticipation of the glide path agreement with LIPA resulting in reduced payments.

Village Mayor Margot Garant said she agrees with the settlement, and it could lead to more use of the plant. In 2017 the facility was only powered on for 41 days, or 11 percent of the year, according to LIPA officials.

Falcone said the Port Jeff power plant operates based on the electricity needs of residents.

“This is an important step we made today to stabilize our tax base moving forward and the viability of any opportunity to repower our power plant,” Garant said in a press release.

The settlement also comes after big wins for LIPA in the courts against the towns of Huntington and Brookhaven, and Port Jeff Village, allowing LIPA to move ahead with its effort to challenge its assessments. Huntington Supervisor Chad Lupinacci (R) has publicly asked New York State Gov. Andrew Cuomo (D) to enact legislation that would protect residents taxes should LIPA get its way in court.

“Are you, as a Brookhaven resident, really going to make out on your LIPA bills? I doubt it.”
— Paul Casino

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.

The Port Jefferson School District along with the Northport-East Northport school district and Huntington Town filed a lawsuit saying LIPA had made past promises not to challenge the taxes levied on their power plants, but they were dealt a blow in September when a state Supreme Court judge ruled LIPA “made no promises” about challenging the taxes levied. 

Garant and other Port Jeff Village officials have expressed past desires to renovate the power plant once the tax assessment issue was settled.
In September the village board advocated for the refurbishment and repowering of its base-load plant to update its decades-old technology and to justify the property’s tax assessment.

This is despite Cuomo setting a goal for 50 percent of the state’s energy to come from renewable sources
by 2030.

Falcone said they do not currently have any plans to run the plant more or do any renovations to plant that has been there since the 1940s. 

Through being used so little and with the push for more green energy, residents have questioned how long LIPA will keep the plant running. The LIPA CEO said the plant will continue to operate for the next seven years, but in the future could be upgraded or transformed into some other space used by the power authority, such as a storage facility or a new, modernized facility.

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Northport power plant. File photo

Town of Huntington officials made the decision Tuesday to take Long Island Power Authority’s proclaimed value of the Northport Power Station at $193 million as an invitation to investigate purchasing the facility.

Huntington town board approved a resolution offered by Councilman Gene Cook (I) to authorize the town attorney’s office to formally research into its legal options in utilizing eminent domain to take ownership of the Northport plant by a 4-1 vote.

“It’s for the people, to look out for the future of the Town of Huntington,” he said. “I have done a lot of research and I believe it’s the right thing to do.”

“It’s for the people, to look out for the future of the Town of Huntington.”

— Gene Cook

The councilman first raised the possibility of turning to eminent domain back in May, days after LIPA submitted documents to Suffolk County Supreme Court in its pending tax certiorari lawsuit against the town, which disputes the current annual tax-assessed value of the plant at about $80 million. The utility company has alleged the structure only has a fair market value of $193,680,000 as of July 1, 2013, based on a market value report from Tarrytown-based Tulis Wilkes Huff & Geiger.

“I looked at that appraisal not as a fair evaluation, but an invitation for the town to explore condemnation of the plant,” Councilman Ed Smyth (R) said. “The price is so ridiculously low that it would be negligent of us to not explore the possibility of acquiring the plant.”

Smyth said that he believes the Northport Power Station, which is actually owned by National Grid, is underutilized by LIPA, perhaps intentionally to devalue it given the ongoing tax certiorari lawsuit.

Cook had previously stated he believes the Northport facility is one of the largest power plants in the Northeast and will become more valuable with future improvements. He said his research shows the facility has the potential to operate and generate electric for another 15 to 30 years, up to a maximum of 40 years before closing down. Cook previously estimated the power station could produce as much as $5 billion in revenue per year for the town.

“The price is so ridiculously low that it would be negligent of us to not explore the possibility of acquiring the plant.”

— Ed Smyth

“What I like if the town buys it now at this rate is, when the plant is closed, we could shut it down and give the property back to the people for reaction or environmental uses,” he said.

Councilman Mark Cuthbertson (D) was the lone vote against an official resolution requesting the town attorney’s office to conduct research into the possibility of eminent domain. He called the legislation an unnecessary act of “grandstanding,” stating any board member could have simply verbally requested the town attorney to look into the matter.

“We are creating false hope this is a viable option, if it really were an option our lawyers would have suggested it a long time ago,” he said. “It is not a possibility to operate the LIPA plant as municipal power authority.”

The councilman also stated that under New York State General Municipal Law, if the town were to take over daily operation of the power station it would not pay any taxes to the Northport-East Northport School District — which currently receives approximately $56 million annually from the utility company.

If the town were to initiate the process of obtaining the power plan via eminent domain, it would not resolve the town’s lawsuit with LIPA. In addition to seeking a 90 percent reduction of taxes on the power plant, LIPA is asking for the town to reimburse it for alleged overpayment of taxes each year since it filed the claim in 2010 — totaling more than $500 million.

“We are creating false hope this is a viable option, if it really were an option our lawyers would have suggested it a long time ago.”

— Mark Cuthbertson

Sid Nathan, spokesman for LIPA, said the company had no comment as it is continuing negotiations at this time. 

Huntington, Northport-East Northport school district, LIPA and National Grid all agreed to sit down with neutral third-party mediator, Port Washington-based attorney Marty Scheinman, in nonbinding arbitration this July to see if all parties could reach a potential settlement agreement over the tax-assessed value of the Northport plant. The trial on the tax certiorari case is scheduled to continue in February 2019, according to Cook. 

Tom Kehoe, deputy mayor for the Village of Northport, commended Cook and the town board for their decision to move forward with investigating the legal potential of utilizing eminent domain to take over the plant.

“Whether it ever gets to the point of the town acquiring it through eminent domain, it’s another piece of the puzzle that will put a little pressure on the utility and LIPA to come to an agreement that’s good for all of us,” Kehoe said.

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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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Port Jeff resident Dom Famularo and Mayor Margot Garant discuss important issues to the village during its new video series. Image from PJV Facebook

Port Jefferson Village is facing an array of issues threatening to upset the status quo in both the near and long term. To help in keeping taxpayers informed on the important set of circumstances likely to impact property taxes and other aspects of daily life in Port Jeff, village Mayor Margot Garant will appear in a series of videos to be released on the village’s website and Facebook account called “Port Jeff Update with Mayor Garant.”

The conversations feature Garant and village resident Dom Famularo in a one-on-one setting responding to questions sent in by members of the public. The first video, released Oct. 16, tackled the village’s tax certiorari legal battle with Long Island Power Authority and the impact an impending settlement will have on villagers’ property taxes going forward, which the mayor dubbed “LIPA 101.”

Garant said the goal of the new communications was to provide her the chance to address the community directly in an uninterrupted fashion, giving her the ability to inform the public on the issues and address misconceptions she said she regularly sees on social media and in conversations.

“The internet right now doesn’t give you the opportunity to have that sort of exchange and people were asking lots of questions,” she said in an interview. “I was trying to figure out, do I like a town hall setting? And I was like, the town hall setting is still not going to give me the opportunity to control the conversation. And I think that might sound egotistical to a certain extent, but the issue is I just want the whole thing on the table.”

In the video, Garant said the village entered into a settlement agreement with LIPA in April to establish a gradual reduction of the amount of money the utility pays in property taxes based on the assessed value of its Port Jeff based plant. The legal cases are based on LIPA’s contention its plants are over-assessed based on decreasing energy demand. Garant said the village is essentially waiting to sign the paperwork to finalize the settlement, as LIPA continues analogous cases with the Town of Huntington and Northport-East Northport School District which is holding up the official completion of the village and Brookhaven Town’s agreed-in-principle settlements.

The Mayor added that about $3.2 million of its roughly $10 million annual operating budget comes from LIPA, and as part of the agreement that number will be cut in half gradually over an eight-year span. As a result, village residents should expect their Port Jefferson Village property tax bill to increase incrementally during that span. Garant said the village is planning to establish a calculator tool for residents to enter in their own pertinent property tax information which will illustrate how much individuals should expect their taxes to go up.

The first video is about 11 minutes long and as of Tuesday afternoon had nearly 2,000 views on Facebook. Garant said Famularo was selected as the other party for the conversations because of his personality, presence and grasp of the issues.

“I decided to get involved so I could assist with clarifying information and prevent social media rumors,” Famularo said in an email, adding he has been a member of the village’s parking committee for eight years and has never shied away from getting involved. “I did not want to just be that person that is not involved and complains … I am honored to sit with the mayor and have time to ask pertinent questions so all PJ residents can hear and be educated in the tasks at hand. We all need to be involved and take an active role.”

Garant said the next video will address efforts to revitalize upper Port Jeff Village and will be released in the coming days. The videos can be accessed by visiting www.portjeff.com or by typing “Port Jefferson, NY” into the search bar on Facebook.

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Port Jeff Superintendent Paul Casciano and board President Kathleen Brennan. File photos by Alex Petroski

By Alex Petroski & Sara-Megan Walsh

Port Jefferson and Northport-East Northport school districts, as well as the Town of Huntington, were dealt a blow in the legal battle against Long Island Power Authority in August. But, it doesn’t mean they are going down without a fight.

Port Jeff board of education voted unanimously — 6-0 with board President Kathleen Brennan absent — during a Sept. 24 special meeting to file an appeal of New York State Supreme Court Justice Elizabeth Emerson’s Aug. 16 ruling that LIPA “made no promises” to the Town of Huntington, Northport-East Northport and Port Jefferson school districts not to challenge the taxes levied on its power stations.

Huntington Town Attorney Nick Ciapetta said the municipality formally filed its appeal of Emerson’s decision the following day, Sept. 25.

The judge’s ruling dismissed the third-party lawsuits brought forth by Huntington and the two school districts which alleged LIPA broke a promise by seeking to reduce the power plant’s taxes by 90 percent. The resolution passed by Port Jeff school board authorized its legal counsel, Ingerman Smith, LLP, to file the appeal.

“We do think her decision was incorrect, and clearly we do recommend that the board consider filing a notice of appeal in this proceeding,” said attorney John Gross of Ingerman Smith, LLP, prior to Port Jeff’s Sept. 24 vote.
Northport-East Northport’s board trustees had previously voted to pursue an appeal at their Sept. 6 meeting.

Gross, who has been hired to represent both Northport and Port Jeff schools, said the districts

will have six months to perfect appeals. During this time, the districts’ legal team will prepare a record including all exhibits, witness depositions, and information gathered from the examination of about 60,000 pages of documents. He said a brief outlining the  legal arguments against Emerson’s decision will be crafted prior to submitting the appeal.
LIPA will be given several months to prepare a reply, according to Gross, prior to oral arguments before a four-judge panel in New York State Appellate Division of the Supreme Court. Further appeals are possible following that decision. Gross said the process could take more than a year.

Meanwhile, Huntington Town, Northport-East Northport school district, LIPA and National Grid have agreed to pursue non-binding mediation relating to the case, which begins Sept. 26. Gross said while Port Jeff is not a party to the mediation, it will be monitoring the outcome because the process could establish a pattern of resolution for its case. He also said the district can withdraw its appeal at any time, but once that occurs it cannot rejoin the process.

“Legal actions taken by the Town [of Brookhaven], [Port Jefferson] Village and school district to generate an equitable solution to the LIPA tax assessment challenges are intended to protect its residents and children against exorbitant property tax increases; especially in a very short interval of time,” Port Jeff school district said in a publicly released letter Sept. 12 prior to passing a resolution authorizing the appeal. “Please know, that the district fully understands that the decision about engaging legal counsel is one to be made with great care, as it always carries a financial implication while never guaranteeing a verdict in one’s favor.”

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