A Huntington Town councilman has filed suit against a state review board and LIPA, charging they failed to get legally required approval for billions in LIPA contracts and other "projects," including the utility's pursuit of tax challenges of Long Island’s biggest power plants.
In the Article 78 proceeding filed March 8, Lawrence Kelly, an attorney for Huntington councilman Eugene Cook, argued LIPA never sought approval from the Public Authorities Control Board for billions of dollars in "projects," including the tax cases and contracts for power sources such as wind farms, power cables and power plants.
Cook is seeking to undo a recently completed settlement between LIPA and the Town of Huntington that reduces taxes LIPA pays for the Northport power station from $86 million to $46 million over seven years, among other things.
Last month, a state Supreme Court justice dismissed a separate lawsuit by Cook against LIPA and National Grid that sought to undo the LIPA tax settlement also based on the PACB approval grounds.
Justice Elizabeth H. Emerson, in a ruling, didn’t directly address the legality of Cook’s argument, saying only that he did not have standing to bring the suit, that it was filed too late and that, because the tax settlement was approved, "the matter is now academic."
Cook last year was the lone Huntington council member to vote against the tax settlement with LIPA, which is now in effect.
Emerson in her ruling noted Cook's previous suit appeared to focus on "undoing a settlement and winning a political battle" rather than "the integrity of the contract process."
But Kelly, in an interview, said proper PACB approval of the tax challenges would have taken into account an agreement by former LIPA chief Richard Kessel never to challenge the now National Grid-owned plants’ value.
Cook’s suit, he said, "is simply looking to have the court order the PACB and LIPA to submit their projects to PACB and order PACB to review them and either approve or deny these billions of dollars" in ratepayer-funded projects.
He argued that tax-challenge cases are "projects" under the definition because they "do not involve the day to day activities of LIPA" and involve "hundreds of millions of dollars." The bar for PACB review is $1 million.
The suit contends: "This illegal conduct by LIPA led to further illegal conduct, including the filing of unauthorized" tax challenge cases that differed from LIPA’s position before the board in 1997, when the transfer of LILCO included the provision that no tax challenges would be pursued if the board approved the LIPA takeover.
Mentioned in the suit are LIPA’s contracts for the South Fork Wind Farm, in excess of $1.6 billion, the Cross-Sound Cable at $330 million, and National Grid’s $5 billion contract for large and small plants across Long Island. National Grid is not named as a defendant.
A representative for the PACB didn’t respond to a request for comment.
LIPA, in a statement, said it hadn't been served with Cook's lawsuit, but called it "another baseless lawsuit and we look forward to responding in court should another lawsuit proceed."
LIPA in the past has said the contracts for the plants were approved by the state comptroller and attorney general, and that the tax challenges were not a project as defined by the PACB.
The suit also makes note of a $913 million capacity contract with FPL Energy Marcus Hook in which LIPA didn’t obtain rights to use or control that power plant "for almost any period of time or under almost any conceivable factual situation."