Backing for Port Jefferson power plant

State Sen. Kenneth LaValle is trying to push the "on" button for the power plant in Port Jefferson -- and village officials dependent on taxes generated by the plant applaud his efforts.

LaValle (R-Port Jefferson) has sponsored a bill in Albany that would offer tax incentives to developers who invest in a new power plant at the site, where an old and relatively inefficient Long Island Power Authority-operated plant owned by National Grid is located.

"We want to make sure that the Port Jefferson power plant and the site is a viable place," LaValle said. By offering tax incentives, "maybe we would build some interest in competition in wanting to repower the Port Jefferson plant."

The bill passed 43-19 in a floor vote Monday, and is awaiting approval in the Assembly, where it is sponsored by Assemb. Steven Englebright (D-Setauket).

The bill offers investors who build at the site development credits, pays a portion of cleanup and infrastructure costs, and provides a full property tax rebate from the state for 10 years. The goal is to diversify the local tax base and make the production of energy more efficient.

"These taxes, generated from multiple times more valuable plants, would provide a significantly larger and more stable revenue base for the affected school district, village, town and county," the bill says.

"While we have not had the opportunity to fully assess the implications of the bill, LIPA is and has been supportive of efforts to improve the efficiency of power plants on Long Island," the utility said in a statement. National Grid declined to comment.

Port Jefferson Mayor Margot Garant called the bill the "right incentive."

"It makes the plant more efficient, reduces emissions and it's better for the ratepayers to let it go off the assessment roll," she said. "It's stabilizing."

The village depends heavily on LIPA taxes. Last year, the utility paid the village about $2.4 million in taxes, nearly 30 percent of its budget, and $14 million to the Port Jefferson school district, Garant said.

LIPA, which has been fighting to reduce the plant's tax assessment, and the village agreed to lower the assessment by 10 percent this year as a temporary solution to LIPA's long-term goal of a 90 percent reduction.

"We're certainly happy to hear there has been some progress for the plant to maintain functioning and to continue supporting the village and district," said school Superintendent Ken Bossert.

One observer called the bill an "excellent step."

"It maintains a very valuable juncture in the Long Island electric system," said Matthew Cordaro, co-chairman of the Suffolk LIPA oversight committee, a county agency. Cordaro noted that questions remain about the funding for the tax incentives.

"In all probability, from the summaries I've read, it would come from state funding," Cordaro said. "However, the lion's share of the costs would fall on whoever the developer is."

Tax incentives in the bill include:

Coverage of at least 25 percent of cleanup and infrastructure expenses

Up to full property tax or PILOT (payment in lieu of taxes) rebate from the state for 10 years

Minimum of millions of dollars in refundable development credits