Tags Posts tagged with "Power Plants"

Power Plants

by -
0 1340

We get it — if you read our newspapers or just about any other media that cover Long Island, you’ve heard enough over the past decade about the legal battles going on between several school districts and townships versus Long Island Power Authority.

If you feel like you’re on LIPA overload, we have some significant news — a major development occurred in the cases last week. A New York State Supreme Court judge determined that the 1997 Power Supply Agreement between National Grid, which owns the power plants, and LIPA, which transmits that electricity to customers, did not contain any language, or “promise,” that prevented the utility companies from seeking to have taxes they pay on the power stations reduced.

The good news is this decision may signal there’s a light at the end of the tunnel to this endlessly drawn-out court battle. We fear the positives may end there.

LIPA has said that its intention in filing these lawsuits is to be able to reduce energy bills for its customers, as it hopes to pay out less in property taxes. On its face, the company’s goal appears to a good thing for residents of Huntington and Brookhaven townships, who will likely see a reduction in their monthly electrical bills should LIPA be victorious, except for the residents in Northport and Port Jefferson, who will see a property tax increase. These odds seem an increasingly likely fact in recent weeks as courts have ruled twice  in LIPA’s favor.

However, these legal battles have been waged for nearly a decade, racking up what we can only imagine are substantial legal bills from lawyers hired to represent the municipalities and the school districts involved. Then adding in fees paid for a third-party mediator when sit-downs begin in September, we find ourselves asking, “At what cost?”

We hope to find out just how much taxpayers’ money has been spent on legal fees for the duration of the saga, so keep an eye out for that. And for what? The “Hail Mary” play that a court would determine the 1997 PSA had implied a legally binding promise that LIPA wouldn’t seek a reduction in its property taxes.

It was such a risky play for Brookhaven Town and Port Jefferson Village that those two municipalities have agreed to settle the cases out of court to avoid exposure to the risk of years of back pay should the issue actually end up in a trial loss for the two entities. Still, why did it take Brookhaven and Port Jeff until 2018 to finally reach a settlement while legal fees kept accruing?

All of this can also be looked at against the backdrop that New York Gov. Andrew Cuomo (D) has set a goal for 50 percent of the state’s energy to come from renewable sources by 2030. Who’s going to pay for the solar and wind producing plants necessary, for example, to get on track in reaching that goal? We don’t think we’re going out on a limb in speculating that at least some of that cost will fall on LIPA’s customers.

While we’d like to think we’re inching closer to a day when we no longer have to report on legal issues pertaining to LIPA, a positive resolution for all stakeholders is going to take significantly more work. In reality, it should have been resolved long ago.

by -
0 2138
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

The Port Jefferson school district has climbed aboard a lawsuit against the Long Island Power Authority that challenges the utility’s efforts to reduce its property taxes at North Shore power plants.

LIPA has been working for the last several years to significantly reduce taxes at the aging Port Jefferson and Northport plants, saying the facilities are grossly over-assessed and force the utility to pay more in property taxes than it should. But the school board voted on Nov. 24 to join a lawsuit filed by the Town of Huntington and the Northport-East Northport school district that disputes LIPA’s legal right to file its tax challenges, claiming they are a breach of contract.

That argument stems from a 1997 letter from former LIPA Chairman Richard Kessel, in which Kessel said the utility would not file property tax challenges in the future “on any of their respective properties at any time in the future unless a municipality abusively increases its assessment rate.”

The “respective properties” referenced include the Port Jefferson and Northport power plants, which are owned and operated by energy company National Grid. That company sells the energy it produces to the Long Island utility.

In Port Jefferson, the power plant’s property taxes provide much support to the school district, accounting for almost half of its budget, making the potential loss of that revenue a serious issue for the district.

The Port Jefferson Village government is in a similar position, funding about one-third of its budget with power plant taxes. Smaller stakeholders include the Port Jefferson fire and library districts and the Town of Brookhaven.

In an announcement posted on its website last week, the Port Jefferson school district said, “Our decision to join this lawsuit is a necessary step to protect the resources of our school district and the financial stability of our taxpayers.”

Before the Port Jefferson school district joined the lawsuit, LIPA had filed a motion to dismiss it, but New York State’s highest court denied that motion earlier this year and allowed the case to move forward.

At that time, a LIPA spokesperson said the utility does not comment on ongoing litigation.

After the utility’s motion to dismiss was denied — representing a small victory for those fighting LIPA’s tax challenges — Port Jefferson Village filed a separate lawsuit in September that alleges the same breach of contract as the schools’ lawsuit. Village Attorney Brian Egan requested that court action on LIPA’s tax challenges, which are still pending in the court system, be delayed until the new lawsuits are resolved.

If the plaintiffs win their arguments, the pending tax challenges would be thrown out.

According to Egan, however, the lawsuits are now facing a new motion to dismiss, this time from National Grid.