LIPA tries to sweeten the tax assessment dispute
The LIPA power plant in Northport is shown in this aerial picture on July 1, 2019. Credit: Newsday / John Keating
The Huntington Town Board meets Thursday to hear a last round of public comment and vote on LIPA’s offer to settle the tax assessment dispute over the Northport Power Plant, and there’s a lot of money riding on the vote. A $3 million sweetener LIPA added to the pot last week for the town and the Northport-East Northport School District is designed to create a majority on the five-member board.
But the Town of Brookhaven and the Port Jefferson School District will have a lot riding on Thursday’s vote, too, thanks to language in their LIPA settlement agreements that grant them essentially the same things later deals include.
But, Nassau County, unless it moves quickly, may lose out.
The current offer reduces annual taxes on the Northport plant from $86 million annually to $46 million over seven years, and extends that $46 million rate another five years if the plant is included in a future LIPA power-supply agreement. Then there are the added sweeteners.
The deal Brookhaven and the Port Jefferson School District agreed to in 2018 reduced the taxes on that plant by 50% over eight years, from $32.6 million to $16.8 million. Using the Huntington formula, the taxes would be reduced to about $17.3 million annually instead. That can add up.
And LIPA officials say the sweeteners for Brookhaven and the Port Jefferson School District have a contractual right to ask for based on the Northport Power Plant deal could net the school district about for $3 million to $4 million more, and the town something in the ballpark of $1 million in new money.
So why not Nassau? The county has an agreement in principle on taxes for the E.F. Barrett and Glenwood Landing plants inked by Democratic County Executive Laura Curran but the Republican-run county legislature has refused to act on it.
That’s a risk. LIPA said in May it would look at eliminating another 400 to 600 megawatts of steam plant capacity and will announce what is being shuttered in December. The only such steam units it operates are Northport, E.F. Barrett and Port Jefferson. Three smaller “peaker” units are at Glenwood Landing. One peaker is already slated to close, and the other two are being considered.
But tax certainty in Brookhaven and Huntington could make those units more attractive to keep open than ones in Nassau. Any additional reductions in capacity at E.F. Barrett and Glenwood Landing would likely reduce what LIPA will accept in a settlement.
So if the sweeteners offered to Huntington and Northport-East Northport do the job of securing that deal’s approval, they will also enrich Brookhaven and the Port Jefferson School District. But unless Nassau acts to secure its own deal, the settlements in Suffolk could come at the expense of Nassau County and the Island Park and North Shore school districts.
Lane Filler is a member of the Newsday editorial board.
