The Long Island Power Authority (LIPA) is on the hook for an estimated $200 million annually in property taxes on outdated power plants located in four communities on Long Island. Ordinarily, power companies include the cost of tax bills in their rates, but this legislation shifts that burden from LIPA customers to ratepayers statewide by tapping into a program funded by proceeds from the Regional Greenhouse Gas Initiative (RGGI).
The Electric Generation Facility Cessation Mitigation Program was created in 2015 to allow Empire State Development to provide property tax relief for local governments and school districts facing a loss of revenue attributed to the closure, temporary or otherwise, of a power plant. A significant portion of the program’s funding comes from the state’s RGGI pollution allowance auction funds. Regulations adopted by the New York State Energy Research and Development Authority (NYSERDA), require the funds to be used to promote and implement programs for energy efficiency, renewable or non-carbon emitting technologies, and innovative carbon emissions abatement technologies with significant carbon reduction potential.
This legislation adds a special carve out for power plants owned by the LIPA, allowing payments from the program to flow to municipalities and school districts absent a requirement that the power plants actually shutdown, a condition for communities in the rest of the state. As a result, this maneuver robs climate and clean energy funds to subsidize LIPA’s property tax obligations without any guarantee of carbon pollution reductions.
New York State is implementing climate policies aimed at setting an example for the nation and the world - redirecting RGGI proceeds are inconsistent with, and in fact undermine, those efforts. While property taxes present a significant challenge to households on Long Island and across the state, so does climate change. A LIPA bailout should not come at the expense of New York’s only statewide climate fund.
This bill amends the Urban Development Corporation Act to authorize Empire State Development to utilize RGGI proceeds to offset reductions in LIPA property tax payments.