Tax breaks opposed for planned power plant

An aerial photo of LIPA's Caithness facility in An aerial photo of LIPA's Caithness facility in Yaphank shows the large rectangular parcel about the same size as the plant directly adjacent to the now operating facility on June 6, 2013. Photo Credit: Doug Kuntz

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Opponents of the proposed Caithness II power plant in Yaphank showed up in force at a meeting Thursday to discuss tax breaks for the facility, with several charging it would "devastate" Port Jefferson Village.

At a meeting of the Brookhaven Industrial Development Agency, lawmakers, residents, a union leader and a green-energy advocate lined up to criticize the facility as unneeded, too expensive, and likely to negate the need to overhaul an older power plant in Port Jefferson.

Approval of tax breaks for Caithness II would be "particularly devastating" to Port Jefferson Village, said Deputy Mayor Laurence LaPointe, arguing the IDA had a statutory obligation to protect Port Jefferson as well as those who would benefit from Caithness II. LaPointe in an interview said the village was considering legal action to block IDA or town approvals for the new plant.

"You'll see empty shops, and senior citizens have to sell their homes" in Port Jefferson if the new plant is built and the old one abandoned, LaPointe said after the meeting.

The IDA has proposed granting Caithness relief from about $59 million in state and county sales taxes. A previous proposal to relieve it of $9 million in mortgage taxes was not offered at the meeting, at which no action on the proposal was taken.

LaPointe said village officials were "in consultation with our attorneys and will make our decision shortly" on whether to file an Article 78 legal proceeding.

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Assemb. Steve Englebright (D-Setauket) expressed concern the new plant would lead not only to the "future abandonment" of the old Port Jefferson plant, but also be contrary to a new state plan to expand renewable energy and "distributed" power sources that are not centrally located.

"The proposal before you, if approved, would advance the construction of what appears likely to be the last large fossil-fuel dinosaur built in New York State," Englebright said.

Ross Ain, president of Caithness Long Island Energy, dismissed the criticisms as old news. "I didn't hear anything here today that hasn't been raised before and answered in the environmental process," he said after the meeting.

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Ain called the tax package "fair and balanced," and noted that if approved, the benefits would revert to LIPA ratepayers in the form of lower operating costs for the plant.

The Caithness II facility, at a proposed 752 megawatts of power and planned to open in 2018, is currently being reviewed for feasibility and necessity by PSEG Long Island. "We're hopeful they'll come out and confirm the need for this plant," Ain said.

Englebright suggested PSEG had a potentially bigger issue to deal with in reviewing the plant's need for new natural gas and electric transmission lines, which he estimated would cost more than $1 billion. LIPA and Caithness have not released the costs, but Newsday has quoted sources saying the combined cost could exceed $600 million.

"I think PSEG is in harm's way because of those additional costs," Englebright said, discussing their potential impact on future electric rates. "This is an Achilles' heel that could take the entire foot off."

One person at the meeting spoke in favor of the Caithness proposal and tax breaks. Daniel Tomaszewski, president of the Longwood school board, which stands to gain a portion of the $20.7 million in annual payments in lieu of taxes from LIPA, said, "We have just as much right to economic opportunity as any other community on Long Island."

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Brookhaven Industrial Development Agency chief executive Lisa Mulligan said the measure was likely to be brought to a vote at the IDA's meeting Wednesday.

Bill O'Leary, a membership coordinator at the International Brotherhood of Electrical Workers Local 1049 in Hauppauge, said the union "strongly opposes" the tax package for Caithness II, in part because it would create only six to eight permanent jobs for the region.

"It is hard to believe that the IDA would give tax breaks to a power plant that, once operating, will devastate the Port Jefferson community by replacing the existing generation station there," he said. Around 100 union workers work at the Port Jefferson plant.

Ain later countered that the Caithness II facility is needed to create enough excess power so that the Port Jefferson plant can be taken offline and rebuilt -- a claim Englebright said was promised, but never followed through on, when Caithness I was proposed.

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