Law and Fabio
12-17-2007, 07:01 AM
BY MARK HARRINGTON | mark.harrington@newsday.com
6:36 PM EST, December 13, 2007
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Digg Del.icio.us Facebook Fark Google Newsvine Reddit Yahoo Print Reprints Post Comment Text size: Trustees of the Long Island Power Authority Thursday approved a 2 percent bill increase for 2008, but not without a spirited debate about taxes, fuel and the authority's mixed efforts in diversifying beyond fossil fuels.
In one of the more controversial suggestions, trustee John Fabio floated the idea that LIPA consider a 10-year plan to phase out the tax payments it makes to municipalities, school districts and others for locating power plants and other facilities in thr districts. Around 11 cents of every dollar consumers pay on thr bills goes to these "payments in lieu of taxes." The 10-year lead-time would allow the dependent recipients to ease thr reliance on the payments.
Non-profit entities such as LIPA generally are exempt from taxes.
Related links
Report: LIPA fuel cell project plagued by problems
Cuomo extends ruling on LIPA charitable giving
Blog: A report on New York's public authorities
LIPA chairman James Larocca urged caution on such a proposal, noting that officials who created the authority agreed to continue payments that predecessor Long Island Lighting Co. had made as a tax-paying corporation.
"It was a choice we made," Larocca said. "... If we want to examine changing that choice, we can. In my own view, it will be very difficult to do that. I think to a large extent we're stuck with it."
Fabio said that was no reason not to consider it. "I think sometimes we need to tilt at windmills," he said.
LIPA chief executive Kevin Law, acknowledging that cutting PILOTs was a potentially explosive issue, said he would consider the topic in upcoming planning meetings. "Everything should be on the table," he said.
Trustee Michael Fagin, while not necessarily supporting ther position, urged LIPA to be direct with ratepayers. He pointed out that "we're essentially collecting a tax and not calling it that. People should be cognizant of it." He and others noted that tax-burdened residents pay the PILOTs without the benefit of a tax deduction.
Supporters of the concept of overhauling local power plants were aghast at the idea, noting that community support for proposals largely hinges on the payments.
"I think there was a lot of fear brought into this room by the statement" about eliminating PILOTs, Lisa Tyson, director of the Long Island Progressive Coalition, which supports re-powering, told trustees. LIPA this week issued a request for bids to study repowering plants in Northport and Port Jefferson.
Utility veteran Matthew Cordaro took issue with LIPA's decision to implement the 2 percent bill increase, despite massive reserve funds. "The entire rate increase could be avoided by using more reserve funds," he said, suggesting LIPA was bng fiscally conservative to appease Wall Street bond raters. "I understand there's a need to make Wall Street comfortable, but there's also a need to make ratepayers comfortable."
Law said avoiding the "temptation" to use more reserves to offset the increase was a matter of fiscal prudence. Without an increase, he said, LIPA would have had "a $100 million hole" in the budget.
Trustee Suzette Smookler expressed pessimism about LIPA's efforts to diversify its energy portfolio, particularly in light of a report this week detailing problems with a 7-year contract to research and demonstrate low-emissions fuel cells with supplier, Plug Power. The said LIPA failed to properly manage the contract, which was plagued by missing reports and cost overruns.
Larocca vowed, "We will protect against that problem repeating itself."
More shit as to why Larocca got the job
6:36 PM EST, December 13, 2007
Article tools
E-mail Share
Digg Del.icio.us Facebook Fark Google Newsvine Reddit Yahoo Print Reprints Post Comment Text size: Trustees of the Long Island Power Authority Thursday approved a 2 percent bill increase for 2008, but not without a spirited debate about taxes, fuel and the authority's mixed efforts in diversifying beyond fossil fuels.
In one of the more controversial suggestions, trustee John Fabio floated the idea that LIPA consider a 10-year plan to phase out the tax payments it makes to municipalities, school districts and others for locating power plants and other facilities in thr districts. Around 11 cents of every dollar consumers pay on thr bills goes to these "payments in lieu of taxes." The 10-year lead-time would allow the dependent recipients to ease thr reliance on the payments.
Non-profit entities such as LIPA generally are exempt from taxes.
Related links
Report: LIPA fuel cell project plagued by problems
Cuomo extends ruling on LIPA charitable giving
Blog: A report on New York's public authorities
LIPA chairman James Larocca urged caution on such a proposal, noting that officials who created the authority agreed to continue payments that predecessor Long Island Lighting Co. had made as a tax-paying corporation.
"It was a choice we made," Larocca said. "... If we want to examine changing that choice, we can. In my own view, it will be very difficult to do that. I think to a large extent we're stuck with it."
Fabio said that was no reason not to consider it. "I think sometimes we need to tilt at windmills," he said.
LIPA chief executive Kevin Law, acknowledging that cutting PILOTs was a potentially explosive issue, said he would consider the topic in upcoming planning meetings. "Everything should be on the table," he said.
Trustee Michael Fagin, while not necessarily supporting ther position, urged LIPA to be direct with ratepayers. He pointed out that "we're essentially collecting a tax and not calling it that. People should be cognizant of it." He and others noted that tax-burdened residents pay the PILOTs without the benefit of a tax deduction.
Supporters of the concept of overhauling local power plants were aghast at the idea, noting that community support for proposals largely hinges on the payments.
"I think there was a lot of fear brought into this room by the statement" about eliminating PILOTs, Lisa Tyson, director of the Long Island Progressive Coalition, which supports re-powering, told trustees. LIPA this week issued a request for bids to study repowering plants in Northport and Port Jefferson.
Utility veteran Matthew Cordaro took issue with LIPA's decision to implement the 2 percent bill increase, despite massive reserve funds. "The entire rate increase could be avoided by using more reserve funds," he said, suggesting LIPA was bng fiscally conservative to appease Wall Street bond raters. "I understand there's a need to make Wall Street comfortable, but there's also a need to make ratepayers comfortable."
Law said avoiding the "temptation" to use more reserves to offset the increase was a matter of fiscal prudence. Without an increase, he said, LIPA would have had "a $100 million hole" in the budget.
Trustee Suzette Smookler expressed pessimism about LIPA's efforts to diversify its energy portfolio, particularly in light of a report this week detailing problems with a 7-year contract to research and demonstrate low-emissions fuel cells with supplier, Plug Power. The said LIPA failed to properly manage the contract, which was plagued by missing reports and cost overruns.
Larocca vowed, "We will protect against that problem repeating itself."
More shit as to why Larocca got the job