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LIPA sues Southampton over power line payments

The Long Island Power Authority has sued the

The Long Island Power Authority has sued the Town of Southampton to recoup more than $200,000 in delinquent payments tied to a controversial underground power line. (Nov. 12, 2012) Photo Credit: AP

The Long Island Power Authority has sued the Town of Southampton to recoup more than $200,000 in delinquent payments tied to a controversial underground power line.

In a State Supreme Court filing, LIPA charges Southampton with breach of contract and seeks to force the town to make $201,496.54 in back payments.

The dispute stems from LIPA's 2008 agreement to bury a four-mile section of a new 13.5-mile cable between Southampton Village and Bridgehampton after neighbors and the town complained that planned 60-foot poles would be an eyesore. LIPA and its trustees agreed to the requests, but only after winning contract language that required the town to cover the costs if LIPA customers didn't pay up.

Burying the cable cost an extra $11 million, which LIPA and the town agreed would be recouped through a fee called a visual benefits assessment on bills. Average residential customers pay around $4 a month for the cable fee -- a charge that will continue for 20 years.

"After unsuccessfully trying to resolve the matter without litigation, LIPA commenced an action against the Town of Southampton in connection with the Town's failure to follow the terms of the court-ordered settlement agreement related to the Visual Benefits Assessment," LIPA said in a statement.

On Thursday, the town passed a resolution to hire an attorney to defend itself against the action. The town plans to spend no more than $15,000 on its defense. Town Attorney Tiffany Scarlato declined to comment.

LIPA spokesman Mark Gross said the $201,496.54 represented the amount due LIPA from those subject to the fees who haven't paid. Court papers say the amount represents those who didn't pay all or a portion of the fee for 2009 to 2012. Gross said between 2,500 and 3,000 customers are in arrears. Nearly 20,000 LIPA customers in the area are subject to the assessment.

In a notice of claim filed in advance of the suit, LIPA said it presented the town with a list of delinquent bills in April, covering amounts due for 2012. The town failed to pay, breaching the contract, LIPA said.

The town counters that LIPA failed to change its billing system to properly apply the fee -- a modification that would have cost $475,000.

LIPA's decision to bury the line was unprecedented, and followed calls from town officials and residents who came in busloads to a LIPA trustees meeting to bury the cable along Scuttle Hole Road.

LIPA trustees eventually approved the measure, with a clause that said the town would pay if residents didn't, LIPA said.

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