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Judge removes LIPA from Huntington tax dispute

The National Grid power plant in Northport is

The National Grid power plant in Northport is seen on Thursday, Oct. 28, 2010. Credit: Newsday / John Paraskevas

The Town of Huntington is declaring victory in the latest legal rounds of the Northport Power Plant tax assessment fight, after a state Supreme Court justice removed LIPA from one case and granted a stay on another.

LIPA was challenging the amount of taxes assessed on the National Grid power plant in Northport and seeking to significantly reduce its payment. LIPA pays about $73 million annually in town taxes on the Northport power plant.

In his first of two decisions, State Supreme Court Justice John C. Bivona agreed with the town's argument that the Long Island Power Authority has no standing in the case, because National Grid -- not LIPA -- owns the plant.

"At this point they're essentially out of the case," said attorney Lou Lewis, special counsel for the town, from the Poughkeepsie-based firm, Lewis & Greer.

Attorneys for National Grid had no comment.

LIPA had argued that it had standing in the case based on three agreements it had with National Grid to purchase power from its Northport plant, including reimbursing National Grid for the taxes paid.

Bivona's decision, dated Sept. 16, said the agreement did not constitute LIPA paying taxes directly to the town, which was key to establishing LIPA's standing in the case.

"The decision still allows the National Grid cases to go forward," said Mark Tulis, an attorney representing LIPA with the White Plains firm Oxman Tulis Kirkpatrick Whyatt & Geiger.

Bivona's second decision, dated Sept. 18, granted a stay in a case in which National Grid is challenging tax assessments from 2010-2013.

The stay is in place until the court decides on separate cases brought by the Town of Huntington and the Northport-East Northport School District.

Those cases assert that National Grid, as LIPA's successor, should be held to a 1997 pledge to drop tax assessment cases and not pursue any more.

In exchange, the town promised not to increase the assessment on the plant, which it has not since 1997.

"At the heart of the case is our belief that promises made by both sides should be kept," said Huntington Supervisor Frank P. Petrone in a statement. Petrone said if the court first resolves the issue of whether those promises must be kept, it could preclude further legal action -- and the associated expense -- of having the court determine the more technical tax assessment issues.

"In the long run, resolving that question first should save taxpayers money by potentially obviating the need for a lengthy and expensive trial on the technical question of the assessment."

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