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LIPA, Huntington to be back in court as settlement talks continue

The Northport power station is seen on Wednesday,

The Northport power station is seen on Wednesday, Aug. 26, 2015. 

Lawyers for LIPA and the Town of Huntington are scheduled to return to state Supreme Court next week for closed-door talks over the utility’s tax challenge for the Northport power station amid tentative hope for a settlement, people familiar with the case said Wednesday.

Settlement talks have been ongoing for months, and the sources cautioned that the latest did not necessarily mean a deal was close. But a state Supreme Court judge could be close to issuing a verdict in the first of LIPA’s tax cases involving the $84 million the Long Island Power Authority pays in taxes for the Northport plant each year.

“They are productive discussions,” one person said about settlement talks in recent weeks. Talks next week will apprise a judge of the utility’s latest offers to settle the decade-old case and the town’s willingness to accept them.

“Everything is up for negotiation,” said a second person familiar with the discussions. “Parties are discussing what would be the framework” and apprising a judge of those possible terms. Nothing has been agreed to.

Spokespersons for LIPA and the town couldn’t immediately be reached.

LIPA has previously offered to settle the case by forgoing the more than $650 million in tax refunds that may be due the utility and offering a phased-down reduction of the sharp reduction that could result from a verdict. The plants are owned by National Grid but LIPA ratepayers pay the taxes and other plant expenses.

A more recent settlement offered to Nassau County for taxes for the E.F. Barrett plant in Island Park and the Glenwood Landing power station added the possibility of a four-year extension of the last year’s tax payments. The Nassau Legislature must approve those settlements but has yet to do so. Brookhaven has already reached a settlement with LIPA over Port Jefferson plant taxes.

One person briefed on settlement discussions said the latest proposed Northport settlement is "better than Port Jefferson and Nassau deals," adding it was uncertain whether the incentives "will make a difference" toward an agreement. 

Island Park residents railed against the Nassau settlement in a public meeting last month after LIPA revealed taxes for residents could increase by upward of $200 a month by the seventh year of the agreement.

LIPA and National Grid filed the first tax challenges a decade ago, citing the considerably lower taxes it pays for the Caithness plant in Yaphank compared with tax bills for older conventional plants that are less used now than decades ago.

LIPA in 2018 paid $181 million in taxes for the four big power stations: $84 million for Northport, $42 million for the E.F. Barrett station, $32 million for the Port Jefferson station and $23 million for Glenwood Landing, which no longer has a large plant.

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