The Power Plant Revenue Issue

Questions/Answers

1. Why is this issue so important to the school district?

   Currently, National Grid makes a tax payment on the main plant of approximately $17,034,667, which is based upon their assessed value. This represents 42% of the school district’s budget. There is also an additional “peaker plant” on which they pay a defined amount called a PILOT. This amount is approximately $1,332,185 per year. When combined with the payment from the main plant, the amount accounts for 45% of the budget.
   
   An application for reassessment has been made that, if successful, would drastically reduce this amount, creating a financial challenge for the school district of significant proportion.
   
   

2. What would this do to the school district?

   If the assessment challenge is accepted in its current form, school taxes to the Port Jefferson community would double. The district would have to re-evaluate the budget to accommodate this tremendous financial loss. The future of the school district in terms of staffing, programs, services and transportation are all things that would have to be taken into serious consideration.
   
   

3. Didn’t I hear that the issue was worked out with the new agreement between LIPA and National Grid?

   A new 15-year power supply agreement (PSA) calls for a study that would look further into the possibility of repowering the Port Jefferson plant along with other key facilities. Although this examination would be made a priority, that is all the agreement commits to – a feasibility study. There is no commitment to repower the plant at this time, and it could take a number of years for the feasibility study to be completed and digested.
   
   

4. So that means we at least have bought ourselves a little time with this new agreement, right?

   No, not at all. LIPA has stated that the current tax assessment challenges are not impacted by this new power supply agreement.
   
   

5. Why is National Grid challenging the assessment?

   As we understand it, the current plant is operating at only a fraction of its capacity. That is because it is an older, less efficient plant (which costs National Grid more to operate). The Port Jefferson plant’s energy output has been limited by the New York State Department of Environmental Conservation because it does not currently support the technology needed to meet reduced emission standards. The company may feel it has a legitimate challenge to its current assessment because of these limitations.
   
   

6. Could a decision on reassessment happen soon?

   We do not yet know the answer to that question, but a decision has not yet been settled by the Brookhaven Town Assessor.
   
   

7. Why wouldn’t National Grid want to repower Port Jefferson? Isn’t it a good idea to take existing facilities and renovate them to be more efficient?

   Many of us think so, including our local and regional elected officials, but we cannot speak for National Grid and its business plans.