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Posted on: September 15, 2016

Southampton, LIPA Settle Underground Powerline Dispute

Untitled Document

For Immediate Release
September 15, 2016

Town of Southampton
Connie Conway
Supervisor’s Office
Office: (631) 283 – 6055

LIPA
Sid Nathan
Director of Public Information
Office: (516) 719 - 8639

SOUTHAMPTON, LIPA SETTLE UNDERGROUND POWERLINE DISPUTE

(SOUTHAMPTON, NY)—The Town of Southampton and the Long Island Power Authority (LIPA) announced a settlement today to resolve a longstanding dispute regarding past due Visual Benefit Assessment (VBA) payments related to the burying of a power transmission line along a four mile stretch from Southampton Village to Sag Harbor.  The settlement ensures that the Town will not need to utilize town-wide taxpayer funds to pay for benefits in the VBA area designated by the Town board in 2008 and that LIPA’s customers outside the designated area will incur no additional cost for the project. 

The dispute relates to the Visual Benefits Assessment that allows LIPA to recover the costs for burying the four mile line from customers in the designated VBA area.  The area follows the path between Head of Pond Road and Scuttle Hole Road and applies to approximately 20,000 households.  Residents had expressed concern that the proposed transmission line would affect the vistas of open fields and farmland.  In 2008, at the Town’s request, LIPA agreed to bury the line at an additional cost of $11.1 million (approximately $2.30 per month per household), to be recovered over a 20-year period from the customers in the VBA area.  Under the terms of the 2008 agreement, the Town assumed responsibility for any unpaid VBA charges each year. 

In 2013, LIPA filed an action against the Town to recover more than $200,000 in alleged unpaid VBA charges.  The charges have continued to accrue and are currently over $470,000.

Shortly after taking office in January 2016, Supervisor Jay Schneiderman examined the high alleged arrears and requested a meeting with LIPA officials to discuss their billing methodologies and the litigation.  He held several meetings with LIPA Chief Executive Officer Thomas Falcone and respective Town and utility representatives.

After lengthy negotiations, LIPA agreed to waive $150,000 of cumulative interest charges on past unpaid VBA charges and to initiate proceedings to amend its billing processes to collect past due VBA charges from customers in the VBA rather than the Town government.  Under the current billing program, the Town would have reimbursed LIPA using Town-wide funds.  LIPA also agreed to waive future interest charges on unpaid VBA arrears for customers.

“It would be unfair to charge taxpayers west of the Shinnecock Canal for visual improvements that only benefit residents east of the canal,” said Supervisor Jay Schneiderman.  “This settlement ends a multiyear dispute with LIPA in a way that is fair to the Town and LIPA customers.”

“With this settlement, we close the chapter on a longstanding community issue while protecting the interests of all of LIPA’s customers,” said LIPA CEO Tom Falcone. “We are pleased with the outcome and look forward to working with Southampton in our mission to create a cleaner, more resilient and affordable electric grid.”

The stipulation of settlement has been signed by the Supervisor and LIPA’s CEO. It must be approved by the court and the necessary tariff changes must be approved by LIPA’s Board of Trustees.

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