Judge tosses Huntington councilman's suit vs. LIPA tax challenge

A state Supreme Court judge has tossed a Huntington Town councilman’s lawsuit that challenged the basis of LIPA’s case over the Northport power plant’s taxes, saying he filed it too late and that he didn’t have standing to bring it.

LIPA and plant owner National Grid had sought to dismiss the complaint.

Lawrence Kelly, a lawyer for the councilman, Eugene Cook, has said he plans to appeal the decision, and that he has taken other steps that would nullify LIPA’s multimillion-dollar settlement of the case, and potentially other LIPA contracts.

LIPA and Huntington have already reached an agreement to settle the case, gradually lowering LIPA’s taxes for the Northport power station from $86 million last year to $46 million by 2027, while forgoing hundreds of millions in potential refunds to LIPA.

It also included settlement of a Northport school district suit against LIPA, with a $14.5 million payment, plus $3 million to Huntington. Brookhaven Town has already settled LIPA’s case against the Port Jefferson plant, and Nassau County is in the process of finalizing a settlement over power-plant properties in Island Park and Glenwood Landing. Kelly said Island Park has adopted some of Cook’s arguments in its case against LIPA. Robert Cohen, an attorney for Island Park, did not respond to requests for comment.

The heart of Cook’s case against LIPA’s tax challenge was that LIPA did not request or receive approval from the Public Authorities Control Board, a state oversight body, for the "project" of bringing the challenges, which Kelly alleges is a violation of state law.

Kelly charges LIPA failed to get the board’s approval for LIPA’s power supply agreements with National Grid, valued at billions of dollars, as well as dozens of other power supply contracts LIPA has, including the Neptune and Cross Sound cables.

LIPA, in a statement, said it was "pleased with the court’s ruling which should be the last word on this matter," noting the bipartisan settlement was a "fair compromise."

State Supreme Court Judge Elizabeth H. Emerson, in her ruling Wednesday, did not directly rule on the legality of LIPA’s contracts or the need for PACB approval, but rather tossed Cook’s case because he didn’t file objections to the LIPA contracts within a four-month statute of limitations. She also ruled that even if Cook had filed his objection within the time required, he is "without standing to bring it."

Noting that the Huntington Town Board voted last September to approve the LIPA settlement offer, Emerson wrote that Cook was "simply outvoted."

Moreover, she wrote, "it appears that the plaintiff’s focus is on undoing a settlement and winning a political battle rather than on the integrity of the contract approval process." She found he "failed to demonstrate an injury-in-fact within his zone of interest." And since the settlement has been approved, she noted, "the matter is now academic."

But Kelly argued that it’s not academic. He said he has already prepared a letter to LIPA demanding that the settlement agreement be approved by the Public Authorities Control Board. And should that fail, Kelly said, he will approach the PACB itself for the approval.

Huntington Town Supervisor Chad A. Lupinacci called Emerson’s dismissal of Cook’s suit "no surprise as it was clearly frivolous and nothing more than a political stunt."

"As he has throughout the past three years, Councilman Cook has offered fool's gold to the residents of the Northport-East Northport school district while I have worked tirelessly with my colleagues and reached across the aisle to find a real solution to an intractable and potentially cataclysmic lawsuit," Lupinacci said. Cook, who is planning a challenge to Lupinacci in a bid for supervisor, was the lone opposing vote to the settlement.

Kelly pushed back, saying that "when he wins," Cook as supervisor plans to use the standing the judge ruled he lacked as a councilman to request that LIPA get PACB approval for the settlement, and "every other contract" valued at over $1 million "for the past 20 years," as required by law.

"They intentionally avoided PACB approval for 20 years, and that’s a continuing scheme to defraud that continues today," Kelly said.

LIPA in a statement said it hadn't seen a letter from Cook, but in the past has argued that PACB approval is for "projects" and that the power supply agreement that is central to the tax cases "is not a project."

"The power supply agreement was approved by the attorney general and the state comptroller before being implemented," LIPA noted. "LIPA has a right to grieve unfair tax bills."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.