Federal Action Against National Grid Gains Support

A federal action brought by the Village of Port Jefferson charging National Grid with monopolistic behavior has gained support from the Huntington Town Board and the Northport-East Northport School District.

The Village of Port Jefferson filed the complaint with the Federal Energy Regulatory Commission in late July accusing National Grid of “perpetrating fraudulent practices and illegally exercising market power.” National Grid used its power, the complaint alleges, in negotiating long term leases with the Long Island Power Authority with the effect of keeping the cost of electricity high by freezing out competition. The full complaint is attached as a PDF.

National Grid could not be reached for comment at the time of publication.

Related: Port Jeff Complaint l LIPA Agreement

In the action, Port Jefferson Village asks FERC to investigate and hold a hearing and investigation into alleged fraudulent practices and illegal exercise of market power by National Grid, which owns the major plants that generate Long Island’s electricity, including ones in Port Jefferson and Northport. The FERC complaint seeks an order forcing National Grid to divest itself of its existing generating facilities in the Long Island Control Area, which would include the one at Northport.

Of specific concern to all interested parties is the allegation that National Grid’s actions were designed to force LIPA into a long-term extension of its power supply agreement and otherwise curtail opportunities to re-power Long Island’s existing generating facilities and manipulate the market.

Northport-East Northport School District currently faces an assessment challenge from National Grid and LIPA on the Northport Power Plant, putting more than one-third of the district's annual tax revenue at risk. The Board was joined by the Town in a counter lawsuit filed in March 2011, charging that the utility companies violated a 1997 agreement when they started litigation in October 2010 challenging the assessment on the Northport power plant. 

Because the FERC proceedings could have a significant effect on the outcome of National Grid and LIPA's tax challenge, the BOE adopted a resolution to intervene in the federal action as parties of interest. The resolution was presented at the Oct. 15 meeting after a 30 minute executive session.

The district noted that on Oct. 2, LIPA and National Grid extended the Power Supply Agreement. The terms of the Agreement have not been publicly disclosed; however, LIPA reports that the extended Agreement would contain a pricing formula similar to the current Power Supply Agreement at rates to be approved by the Federal Energy Regulatory Commission.

“The School District believes that joining the FERC action will help to ensure that the School District’s interests are represented in this proceeding,” said Board of Education President Stephen Waldenburg, Jr.

The Town passed its resolution the following day at an Oct. 16 Town Board meeting. In the resolution, they reiterated concerns about National Grid's alleged abuses of power and attempt to curtail opportunities to repower existing plants. The Town also noted that, in a response to a request for information, it has filed a proposal with a State agency outlining a proposal to increase the Northport plant’s capacity and increase its efficiency, though National Grid has yet to respond.

“LIPA has used the assessment on the generating plants as a smokescreen for the real reason electricity costs are so high: the way it has colluded with National Grid to freeze out competition and ignore proposals to power Long Island more cheaply and efficiently,” Town Supervisor Frank Petrone said in a statement. “We hope a FERC investigation and full airing will lay bare how National Grid and LIPA are keeping electric costs high.”

Town Councilman Mark Cuthbertson added, “LIPA and National Grid continue to spew misinformation about why customers pay so much for their electricity. Joining the action with FERC will help ensure that Huntington taxpayers’ interests are properly represented and hopefully allow the facts about the situation to receive a public airing.”