Dear Governor Cuomo and All New York State Elected Officials, – From Councilman Cook

Dear Governor Cuomo and All New York State Elected Officials,

Newsday covered Governor Cuomo indicating that National Grid just “thought they could get away with it.”  Welcome to our world, Governor Cuomo. Today on the radio, Lt. Governor Hochul spoke of Nat Grid’s “arrogance”. You are welcome as well, Lt. Governor. Tax Certiorari cases, like those filed by Nat Grid and LIPA against the Town of Huntington, lay in the hands of Judges who are torn between assessment values for power plants which range from the historic  monopoly era utility valuation of cost new minus depreciation and the new unregulated era of assessment methods of income valuation or market value for resale valuations. On Long Island, the remnants of the monopoly era (LIPA as successor to LILCO) guarantee a profitable income stream for the legacy power plant at Northport which provides sine qua non capacity for LIPA membership in the New York power grid. Sine qua non is the proper term, for it means “without which nothing”.  Without Northport, LIPA does not exist as a member of the power grid, since it provides the power “capacity” required under federal standards.

Despite this “sine qua non” aspect of Northport, and the steady income stream Nat Grid obtains for maintaining that power capacity and the Northport site, Judges feel constrained to stick with monopoly era valuations which benefit tax assessment law firms with perpetual debate about depreciation impacts on the monopoly era valuation techniques.

 LIPA guarantees Nat Grid an income stream which is much more relevant to the valuation of the Northport property. It does not help the court’s understanding that Nat Grid and LIPA refuse to provide copies of those specific contracts, claiming trade secret. That is how the Iroquois sale by Nat Grid and the contracts for gas purchases with Iroquois can remain hidden behind the arrogant walls of LIPA and Nat Grid.

In today’s Newsday story, Mark Harrington and Maura McDermott recount the typical double speak of Nat Grid, quoting the Nat Grid spokeswoman Karen Young admitting the termination of three contracts for supply on the  Iroquois pipeline contract for gas supply earlier in the year, only to have Nat Grid “discover” the same supply available after the Governor threatened to remove Nat Grid’s license to supply energy on Long Island.  Let me note that Nat Grid previously owned a 26% stake in the Iroquois pipeline. The existence of that supply of gas should not have come as a surprise to the prior owner.

In light of the Nat Grid settlement with the State over Nat Grid’s policies of extortion of the citizens of the State, it is time again to look at the uses made of the Northport facility and Nat Grid’s deception of the State Supreme Court in the tax cert litigation. How does the Governor and Lt. Governor’s finding of extortion by Nat Grid relate to the town’s position in litigation that Northport’s value in flexibility is priceless? Was Nat Grid fear of conceding that priceless resource in the Town of Huntington tax cert litigation the reason Nat Grid failed to explore the possibility of using the Iroquois pipeline at the Northport facility while imposing the extortionate moratorium?  I would note I have been raising the issue of the Iroquois pipeline for the past year and a half.

As part of the utility class of taxpayers, the Northport facility is a member of an exclusive club provided the rights to provide energy to Long Island. Nat Grid has betrayed that trust with their illicit gas moratorium, and the tens of millions of dollars provided by their shareholders in the settlement with New York State is a symbol of that betrayal.

Going forward, any assessment of the utility class must continue to underscore that special status of class membership. Stipulations in any resolutions should safeguard the taxpayers against providing special rights to the shareholders of Nat Grid. In dealing with future assessments, Nat Grid should not be favored as contrasted with the other utility class members. If the local government stipulates any monetary limits on property value for assessments, the same oversight provided in terminating the illicit moratorium should provide for a continuation of the unique obligations of this privileged class of utility class taxpayers to pay a certain defined percentage of the assessment roll obligations. Otherwise, the towns risk stipulating away the rights of residential and commercial taxpayers to enforce the utility share of the assessment roll obligations.

Northport has many uses, some of which may become clearer in the coming months. The last thing the citizens need is a government without the vision to look ahead and understand those possibilities. Right now, Northport’s generating capacity is a bridge to the future. Over the next decade, we may see that Northport’s flexibility was the key to the viability of Long Island’s business. Whether Nat Grid is ready to concede it or not.

Sincerely,

Eugene Cook

Huntington Town Councilman