LIPA and Nassau County still can't settle their differences

With the settlement agreement between the Long Island Power Authority and the Town of Huntington over the tax challenge on the Northport Power Plant inked last year, it seemed the Nassau County deal couldn’t be far behind.

But LIPA has always been about political power as much as electrical power, and the cast of characters exerting influence on the negotiations, from school boards to county politicos to former U.S. senator and longtime lobbyist Alfonse D’Amato, is making closing the circuit on this deal a highly-charged endeavor.

The Town of Brookhaven already came to terms with LIPA over taxes on the Port Jefferson plant in 2018. Indeed, Nassau County Executive Laura Curran and LIPA came to terms in 2019, but the Republican majority in the county legislature balked on approving the agreement, waiting to see what happened in Huntington.

So with Huntington settled and Nassau in line to get a deal patterned after Huntington’s, why isn’t the Nassau pact a fait accompli?

It depends on who you ask, but it’s clear the obstacles are real and the issue is the Nassau school districts affected.

Huntington was a party to the lawsuit filed by the Northport-East Northport School District demanding LIPA be held to a 1997 promise by then-LIPA Chairman Richie Kessel to never appeal plant taxes as long as the plant’s assessments were never raised. The district lost a decision in that case, appealed, and settled, with Huntington’s participation allowing the town to help secure the school district’s separate settlement, $14.5 million over seven years, and protect its interests.

Nassau County is not a party to the lawsuit filed by the school districts: North Shore regarding the Glenwood Landing plant and Island Park regarding the E.F. Barrett facility in Island Park, over whether Kessel’s letter was binding.

Here’s where it’s all at:

• Curran’s administration says it is up to Nassau County Legislature Presiding Officer Richard Nicolello and his GOP caucus to push, prod and hammer LIPA to take proper financial care of the districts, holding the needed vote over the power company’s head as leverage.
• North Shore school district Superintendent Peter Giarrizzo and the attorney representing the district, John Gross, say the hiccup is real, substantive and could cost the districts involved millions. Because the laws regulating Nassau County’s four-class tax system do not allow huge shifts of a tax burden from the plants to residential property owners via reduced assessment of the plants, the payments must instead be converted to Payments in Lieu of Taxes. And because of the way PILOTS are collected and accounted for, Giarrizzo says his district would face a shortfall each year of the seven-year deal that would culminate in a loss of approximately $7 million in the 2026-2027 school year alone.
• Top LIPA officials say they are sitting down with the North Shore and Island Park school districts soon to understand their ask, but don’t see that there should be a real holdup considering the pattern has been set by the Huntington and Brookhaven agreements. As to the assertion that the districts would see a shortfall because the money went from being an assessed tax payment to a PILOT and lowered the levy, LIPA Chairman Tom Falcone says the difference is in perception, not monetary reality. Falcone says the plants’ value out of the taxable levy means annual tax increases the districts put on property owners will sound higher and more easily force the districts to pierce the tax cap. But, says Falcone, the actual payment agreements are no different than in Brookhaven or Huntington.
• Nicolello says he has a responsibility to see that the school districts are fully taken care of in terms of both the direct payment Huntington’s deal would lead them to expect and the complexities of the Nassau tax system and PILOT agreements before he and his caucus can sign off on the county’s agreement, regardless of whether the county is a party to the districts’ lawsuit.
• And one central player in the negotiations says former Republican senator and Island Park native son D’Amato’s fight against the longstanding opposition to the deal seems to be marching in concert with the intense pressure D’Amato’s Park Strategies consulting firm is putting on LIPA to secure a battery deal for his long-term client Nextera, a giant energy firm.

And D’Amato? He took plenty of umbrage at the idea that he is standing in the way of a settlement with the Island Park school district until his client gets a deal from LIPA. He emailed The Point a statement that we are sharing in full. Note, his claim about a 50% tax increase is unsubstantiated.

"LIPA has said the average property tax increase in Island Park in the final year of the deal would be $203 a month, or $2,436 per year. The current median property taxes in the district are about $8,000 annually.

"For over sixty years, I came home to my family’s house in Island Park. Today, it remains a hard working middle class village, as are the surrounding communities. If you think I am going to sit quietly by as a legal commitment made to them regarding the tax assessment of the adjacent power plant is broken then you still don’t know me very well. Without a fair, negotiated phase in, every taxpayer in the neighborhoods I still call my home will face a crushing 50 percent increase in their property taxes, forcing many to sell their homes. That would be more than a tragedy – it would be an outrage.

"In regards to Nextera, I have represented them, and their corporate predecessor, for two decades. And for the last 18 months we have been repeatedly asking LIPA for an opportunity to bid on a public LIPA RFP that could introduce Nextera energy technology at that facility. Instead, they have provided more excuses than there are high tides.

"But this issue isn’t about Nextera. It’s about fairness for a community whose typical home is on a 40 by 100 piece of property and whose median income is among the lowest in Nassau County. It’s about keeping previous LIPA commitments that were made to them. And ultimately it’s about preventing a tax hike that would literally put Island Park home ownership at risk. My role here remains that of an unpaid community activist in a village I love and respect. Trying to link the two as some sort of conflict of interest is a cheap ‘gotcha’ that marginalizes a community facing a devastating tax increase. The day that I am silent in the face of the kind of bureaucratic arrogance we are seeing at LIPA is the day my name is on a mass card."

So, for now, the effort to resolve the tax-grievance cases that would reduce the amount all Long Island ratepayers pay in property taxes on aging power plants with a lower assessed value remains the quintessential power struggle that wouldn’t go dark.

By Lane Filler

lane.filler@newsday.comlanefiller

Lane Filler is a member of the Newsday editorial board.