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Lawmakers: Property taxes a major issue in LIPA overhaul

A LIPA electric meter in a Garden City

A LIPA electric meter in a Garden City private residence. A tentative new plan would significantly shrink LIPA, reducing it to essentially a financial holding company and cutting staff. (June 4, 2013) Credit: Newsday/Audrey C. Tiernan

ALBANY -- State senators said Tuesday that a single major issue stood in the way of passage of a revised bill to overhaul the Long Island Power Authority: a solution to the high property taxes LIPA pays for large power plants.

One Senate source said that while the parties had reached an agreement on a LIPA overhaul "in concept," lawmakers were still working on details that could be hammered out Wednesday.

LIPA has filed tax grievance cases over the assessments for the plants, which the authority and experts say are significantly inflated. LIPA annually pays $73 million in taxes for the Northport plant, $40.3 million for one in Island Park and $29 million for the Port Jefferson power station. National Grid owns the plants.

Under terms being negotiated between Long Island senators and the Cuomo administration, claims for over-assessments for previous years would be dropped, while a phasing down of assessments by as much as 5 percent a year would be put in place over 10 years or longer.

"We're trying to work out a deal that would allow the prior tax [grievances] to go away, and reset the assessments going forward," said Sen. Carl Marcellino (R-Syosset).

A spokesman for Gov. Andrew M. Cuomo declined to comment.

Senate co-leader Dean Skelos (R-Rockville Centre) expressed optimism that lawmakers can reach a deal on how to handle power plant assessment values.

"I think we can resolve that," Skelos said. The Long Island Senate delegation met for more than an hour Tuesday, and afterward officials indicated few details were left to be finalized.

Cuomo's revised bill to overhaul LIPA was sponsored Monday by a contingent of Long Island Assembly Democrats. The State Senate listed its Rules Committee as the sponsor, not forcing any one lawmaker to put his name on the bill.

The bill includes a paragraph on modernizing or "repowering" older power plants, a concession sought by Sen. Kenneth LaValle (R-Port Jefferson), whose district hosts a little-used plant.

The Assembly bill was sponsored by Assemb. Robert Sweeney (D-Lindenhurst), Earlene Hooper (D-Hempstead), Harvey Weisenberg (D-Long Beach), Steven Englebright (D-Setauket), Philip Ramos (D-Brentwood), Charles Lavine (D-Glen Cove), Michelle Schimel (D-Great Neck) and Phillip Goldfeder (D-Rockaway).

Under the bill, LIPA would be reduced to a holding company of 20 employees from a current 90, and would turn over nearly all responsibilities to PSEG of New Jersey when PSEG takes over managing the Long Island grid next year.

LIPA's contract with PSEG would not be subject to state comptroller review, but the state Department of Public Service would perform a "review and recommend" screening.

LIPA's board would be increased to nine members from the five that Cuomo originally recommended, with four appointees by the legislature. The current LIPA board has 15 trustees, nine of whom are appointed by the governor.

Even as talks continued in Albany, some on Long Island argued that battling over taxes missed the greater point.

"Somebody needs glasses if they think that's the only unanswered question," said Shelly Sackstein, chairman of business group Action Long Island, and leader of a coalition opposing the legislation. He and others said progress on the bill should be stalled until ratepayers know the full costs of the PSEG contract and the costs of "securitizing" more than $3 billion in LIPA debt, as the bill allows.

"It's totally absurd," he said. "We're going to be sitting in the dark, counting buttons, and they're going to worry about tax certs."

Others are raising more specific concerns.

The union representing some 2,600 National Grid electrical and gas workers said in a notice Tuesday that it plans to stage a protest Wednesday night in Rockville Centre to urge Skelos to incorporate job protections into the bill.

"There are no protections at all, for not only jobs on Long Island, but the existing workforce," said Don Daley, business manager of local 1049 of the International Brotherhood of Electrical Workers. "The reality is PSEG can move the jobs wherever it wants now."

PSEG spokeswoman Karen Johnson declined to comment.

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