Residents are still waiting for Southampton Town and LIPA to come to terms about burying transmission lines.

TOP STORY

THE SAG HARBOR EXPRESS

ISSUE DATE: 3/20/08 March 2008

LIPA Deal is Stalled

By Bryan Boyhan

Hopes that a four-plus mile stretch of telephone line would be buried along some of Southampton Town's most scenic roads have dimmed over the past week as talks between the town and the Long Island Power Authority appear to have hit a snag. At issue is how the utility can be guaranteed their financial interest will be protected in the deal that would have local ratepayers responsible for the cost, estimated this week by LIPA's CEO to be "in the $8 million range."

In response, the town board this week introduced legislation that would require all future utility lines in the town be buried, at the utility's cost. A public hearing on the proposed law will be held this Tuesday, March 25. A new proffer from the town this week offering to meet LIPA halfway has beet met coolly by the LIPA administration.

The town and LIPA have agreed, in principal, that a new transmission line proposed to run between Southampton and Bridgehampton should be buried, thus protecting scenic vistas along Scuttle Hole, Head of Pond, and Lower Seven Ponds roads. The entire project totals about nine miles of transmission lines. LIPA has already agreed to pay to bury about five miles of the cable, but said it could not afford to bury the balance. Responding to public interest, the town board lobbied LIPA and suggested a special "scenic benefit district" - the area of the town from the Village of Southampton east to the town line - the ratepayers of which would be responsible for paying to bury the rest of the lines. LIPA, however, is insisting it be protected against any litigation arising from the arrangement, including suits from aggrieved parties within the district, as well as a guarantee from the town they would be reimbursed for any default in payment.

The town has argued that they are legally unable to agree to such an indemnification, and instead has suggested that LIPA should insure themselves. LIPA has, in turn, disagreed with the town's interpretation of the law, and insists there are ways the town can indemnify. Exacerbating the situation is a deadline. LIPA intends to begin work on the project by the end of this month.

The back and forth between the two parties has become "torturous," said Southampton Town Councilman Chris Nuzzi during a special board meeting on Friday.

"It appears as if they are closing the door on the town," said Nuzzi, who called the relationship with LIPA "unprecedented."

Yesterday the councilman said the town has offered another proposal, this one saying the town would guarantee payment for burying the lines, but would decline to insure against potential lawsuits.

"We'd accept some type of limited indemnification agreement," said Nuzzi, that would be limited to non-payment of the special assessment. We think it's a fair compromise."

The letter from Southampton Supervisor Linda Kabot to LIPA CEO Kevin Law expresses frustration with LIPA, and calls a press release issued by the authority last week "accusatory."

The proposal she offers notes that the town is willing to indemnify LIPA for the recovery of any collection costs associated with delinquent ratepayers for the special Visual Benefit Assessment surcharge, as well as non-payment of the surcharge, if LIPA agrees to defend the town against any attack on its enforceability. The surcharge would be on ratepayer's LIPA bills for 20 years, until the cost has been repaid.

As an alternate suggestion, Kabot recommends a "supplement" to the VBA surcharge where the town and LIPA would request each ratepayer to agree to an annual assessment equal to a pro-rated amount of the delinquent funds from the previous year.

"Given the modest amounts and remoteness of such risk of delinquency," wrote Kabot, "we are confident that the majority of such ratepayers will have no objection to such an additional assessment."

Each ratepayer's liability would be capped "at a reasonably acceptable number," Kabot wrote.

Nuzzi hopes that the new, proposed law would remove such problems in the future, and place responsibility for burying the lines squarely on the utility. While the law, as written, would catch up other utilities, such as telephone and cable television, Nuzzi said "from my perspective we want to focus on the transmission lines," which are the larger lines that demand much taller poles.

"The visual quality of the Town, or what residents and visitors see as they visit and travel around on a daily basis, defines how people feel about their community," reads a section of the proposed new law. "These visual cues determine the quality of life of a community, and influence whether people want to visit, move to, live in, or locate their business to that community."

As proposed, the law would require a building permit for any installation, construction or placement of electric, telephone or cable television lines in the town, and would further require that they all be buried. Existing lines would be able to remain, and may be replaced or repaired. A violation of the law could bring a $1,000 fine or 15 days in jail.

LIPA's Kevin Law said he was "surprised" that the town would take such an action without consulting the utility, but added "I don't believe the law would be applicable to us since we are a state authority."

As for the new proposal for partial indemnification, Law said "it does not appear to address the concerns of our trustees."

Law said he remained committed to working things out, but noted the deadline is near. He said the utility would begin work on either end of the project - where lines were already planned to be buried - "leaving us some time to negotiate the middle."

Southampton Town councilwoman Anna Throne-Holst expressed her frustration with Law's position: "All of us thought the surcharge was going to be the hurdle. We jumped that, and found there were more hurdles."