Letter: Update on LIPA Power Plant From Mayor's Office

Official Memo from the Mayor's Desk Village of Port Jefferson

Over the last several months, Trustee LaPointe and I have met with various government officials including, but not limited to Governor Cuomo’s aide, Scott Martella, Town supervisor Mark Lesko and former State Assemblyman Marc Alessi to discuss various options and concerns with respect to the repowering of the Port Jefferson site.

has retained the services of John Dax, an attorney from Albany, who specializes in energy regulation and procedure, attorney Harvey Besunder to consult with and represent the Village in the possible filing of an action for eminent domain, and Rich Marcelli, a valuations expert to guide us through the process of valuing the property for eminent domain purposes.

We are awaiting LIPA’s decisions with respect to the proposals which it has received from various companies to construct new generating facilities which could replace up to 2,000 Megawatts of electricity currently being produced by National Grid’s old base load plants, including Port Jefferson. We have learned that six proposals have made the final cut and are being actively considered.

On Feb. 14, Trustee LaPointe and I met with LIPA representatives in Huntington where we were informed that power purchase agreement negotiations are still ongoing between LIPA and National Grid. The discussion of the prospects of repowering of our site under the terms of this agreement produced no clear answer.

LIPA apparently still considers repowering of Port Jefferson as a possible outcome of its negotiations with National Grid, but it is by no means a certain outcome. It was also emphasized during this meeting that downward tax adjustments are a critical component to make our site economically viable for repowering.

On February 2, 2012, the Village of Port Jefferson received a tax grievance filed by LIPA seeking a 75 percent reduction in assessed valuation of the power plant. This document has been forwarded to our Attorney, Jay Herman, and the Board of Trustees will discuss same in executive session at our next earliest convened meeting.

The Village Board will discuss a recommendation to the Village’s Board of Assessment Review to consider negotiating a settlement to the pending tax grievance which again reduces the valuation of the Port Jefferson plant. The purpose of such a negotiated reduction is twofold:

• To protect the Village taxpayers from repaying back taxes to LIPA at the end of any tax certiorari action brought pursuant to the tax grievance.
• As the host community to signal our willingness to make adjustments as part of the tax grievance process to encourage LIPA to proceed with repowering, thus protecting our tax base at least in part.

Trustee LaPointe and I were also invited to take a tour of the modern and efficient CAITHNESS facility in Yaphank. The contrast between this new facility and our old and inefficient plant was dramatic and frankly discouraging. It can only be attributed to an appalling failure to consider the needs of Long Island electric ratepayers and Long Island power plant host communities, both of whom would have been far better served if new and efficient generating plants had been built on the existing brownfield power plant sites with realistic downward tax adjustments implemented over time.

The Village is preparing a written statement to submit before the Public Service Commission hearings commencing in early March concerning the audit of LIPA which has resulted from the new legislation passed earlier this year and quickly signed into law by the Governor.

We are committed to exploring and exercising any and all avenues to preserve our tax base while advocating for a comprehensive energy policy for all Long Islanders that is competitive, affordable and doesn't leave communities to deal with the wreckage of closed, blighted, unusable industrial brown-fields and decimated public schools, libraries, and public services.

Thank You

Mayor Margot Garant