LIPA: Northport power plant pays the highest taxes in the nation

LIPA paid $82 million in taxes for the plant in 2017, ranking it ahead of the Empire State Building.

LIPA is number one–in property taxes.

During a board meeting in Uniondale on Wednesday, LIPA chief executive Tom Falcone provided context for the sky-high taxes the utility’s ratepayers shell out each year for just the Northport power station: The property ranked at the top of a recent listing of all commercial property taxes across the country.

The $82 million LIPA paid in 2017 taxes for that National Grid-owned plant ranks it ahead of such blue-chip properties as the Empire State Building ($39.9 million), the Waldorf Astoria ($19.2 million) the Mall of America ($30 million), even Disneyland ($35.6 million), according to LIPA-supplied research by the firm, Commercial Cafe.

For Falcone, who has two young daughters, the high taxes provided an opportunity for tongue-in-cheek context at the board meeting, where he noted the difference in taxes in proposing an alternate location for his family’s next summer vacation.

“I went home and I told my little girls, Hey, I’ve got some place for you,” he recounted. “You can go to the happiest place on earth, that would be Disneyland. … Or you can go someplace twice as good: We’re going to Northport!”

The comparison was timely, if opportunistic. The Long Island Power Authority’s nearly decade-long legal battle with towns and school districts to reduce the taxes on the Northport plant and three other National Grid-owned plants is coming to a head. The utility is currently working to reach settlements in and out of court to lower the taxes for each of the plants. Brookhaven Town has reached an agreement in principle to settle.

The amounts are significant, not just for the Northport plant. Around 15 percent of each customer’s LIPA bill goes to pay taxes. In addition to the Northport plant, LIPA customers pay $42.6 million annually in taxes for the EF Barrett plant in Island Park, $32.6 million for the Port Jefferson power station, and $23 million for a Glenwood Landing site where a plant no longer exists. Each would have made the list of top-ranking commercial taxes but weren’t included.

Municipalities and school districts have alternately argued that former LIPA officials agreed not to challenge the taxes when LIPA took over the system in 1998, and that tax payments were promised as a way to compensate homes and businesses located near the plants and for their emissions.

Utility officials stressed at the board meeting that the utility has seen notable improvements in customer satisfaction and reliability in recent surveys, including the finding that PSEG Long Island has ranked as the “most improved” utility in a JD Power customer satisfaction survey. The utility recently ranked second from last in satisfaction among large eastern utilities in surveys taken during the past year.

And the company continues to show improvements in reliability, hitting targets for average customer outage duration and frequency thus far in 2018, among others, after just missing those targets last year. Dan Eichhorn, president of PSEG Long Island, said reliability scores are improved 25 percent to 40 percent over 2017.

Highest taxes

A look at some of the properties that paid less in taxes in 2017 than the Northport power plant, according to research by Commercial Cafe. The full list of 100 commercial properties is available here.

Northport power plant

2017 taxes: $82,093,239


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