The E.F. Barrett Power Plant is seen from the air...

The E.F. Barrett Power Plant is seen from the air on Saturday May 15, 2010. Credit: Kevin P. Coughlin

LIPA’s proposed settlement of a tax grievance with Nassau County over the E.F. Barrett power plant in Island Park is “in limbo,” according to a member of the Republican-controlled Nassau Legislature, which must approve a portion of the agreement.

During a Nassau Legislature session Monday, Legis. Denise Ford (R-Long Beach) told a member of the Island Park library board of trustees that the legislature does not plan to advance a settlement resolution because of pending state legislation that could impact it.

“Just to let you know that right now, that settlement that was negotiated by the County Executive (Laura Curran) basically is in limbo at this point,” said Ford.

Republican legislators have cited passage in the State Senate of a bill that would prevent LIPA from collecting refunds for back tax payments from municipalities. While LIPA’s settlement offers have generally included provisions to forgo refunds, a legislative source said stalling passage of the agreement has “caught the attention of the state, and we want to give them room to get a better deal” with LIPA.

The characterization appears to explain why the legislature didn't take up the bill earlier this month, after the tentative settlement was reached in November. It follows a public meeting in Island Park in January in which residents and some officials reacted with outrage over the proposed settlement. The deal would lower the $43 million in property taxes LIPA pays for the Barrett plant by half over seven years, resulting in residential taxes that climb from around $24 a month in 2021 to $203 month by 2027.

Any vote by the Nassau Legislature would settle both the Island Park and Glenwood Landing tax cases with LIPA, and set a schedule for new payments in lieu of taxes. Taxes on the Glenwood Land plant are now $23 million.

The State Senate last month passed a bill that would prevent LIPA from collecting tax refunds in the tax disputes. That has yet to be voted on by the Assembly, and there are no assurances Gov. Andrew M. Cuomo would sign it. Cuomo appoints the majority of the LIPA board, which favors tax challenges and the settlements.

LIPA and plant owner National Grid have been grieving taxes on the antiquated plants for around a decade, seeking to cut tax payments by half as the plants are used less frequently and Islandwide energy use declines. LIPA is awaiting a verdict as soon as this month on a tax case over the $84 million LIPA pays in taxes for the Northport power station, and has reached a settlement with Brookhaven Town over the $32 million paid in taxes for the Port Jefferson power station.

At Monday’s session, Nassau Legislature Presiding Officer Richard Nicolello concurred that the resolution for the settlement “will not be called because [of] the Senate bill.”

“We are not going to move ahead on the settlement until we get clarification on the state” bill, he said. “Whether that [Gaughran] bill becomes an Assembly bill, is signed by the governor, if both houses pass it, whether it gets withdrawn. So we right now are 100 percent relying on the state action to determine what our next step is.”

Gaughran in an interview Thursday said he believed the Nassau Legislature’s move to stall the settlement was “prudent.”

“I think the Nassau Legislature on a bipartisan basis is being prudent,” he said, adding he believes his bill, which has companion legislation in the Assembly, “can be signed into law.”

He said his bill “can lead to communities going back and renegotiating what I believe are bad deals” with LIPA, deals that he said represent an effort by the authority “to enrich LIPA and its private-sector partners at the expense of our students and taxpayers.”

One person familiar with LIPA’s legal cases noted that while the political process around the settlement may be in limbo, LIPA’s legal challenges continue to move through the courts.

Christine Geed, a spokeswoman for Curran, said: “We tried our best at the negotiating table with LIPA but if the State Legislature thinks they can deliver a better deal, we welcome it.”

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