The Federal Energy Regulatory Commission on Thursday denied a request by the Village of Port Jefferson for an investigation into its claims that National Grid engaged in "fraudulent practices and illegal exercise of market power" in its operation of Long Island power plants.
The village had filed the complaint as the Long Island Power Authority was renegotiating a power supply agreement with National Grid, which manages the region's electrical and owns the majority of local power plants. The complaint also coincided with a LIPA request for proposals for new power sources.
The village argued that National Grid's alleged refusal to overhaul its existing power plants, including one in Port Jefferson, was evidence of abuse of its market control and a desire to keep local energy prices high.
But FERC said because National Grid's power generation company "does not retire or repower its inefficient units or that Long Island energy prices may be higher than surrounding areas does not sufficiently allege manipulation."
National Grid had rejected the allegations from the start as "frivolous" and without foundation. LIPA filed papers supporting National Grid's position.
Port Jefferson, Brookhaven Town and local school districts receive about $50 million annually in tax payments from LIPA for hosting the Port Jefferson plant, which was built in the 1950s and is among the least efficient of the plants that supply power to LIPA.
National Grid in a statement said it "agrees with the order issued by FERC denying the complaint filed by Port Jefferson."
The purpose of the village's complaint may have been rendered moot in September. The LIPA contract with National Grid included a clause that allows for LIPA to overhaul, or "repower," the National Grid plants, including those in Island Park, Port Jefferson and Northport. LIPA will undertake studies to determine the feasibility of such a move next year.
Port Jefferson Village Mayor Margot Garant wasn't immediately available to discuss the FERC ruling.