September 25, 2013

LIPA Sues Southampton

The Long Island Power Authority is suing Southampton Town for over $200,000 in overdue payments for an underground power line.

LIPA is charging Southampton with a breach of contract and is now seeking to force to town to pay up about $201,497. The dispute arose from an agreement in 2008 to place a four-mile section of a new 13.5-mile cable on Scuttle Hole Road in and near Bridgehampton. LIPA agreed to bury the cable, after neighbors, residents and town officials complained of how unappealing, aesthetically, and potentially hazardous during a hurricane, 60-foot poles would be. The catch was the town would be required to cover the costs if LIPA customers didn't foot the bill.

Last Thursday, Southampton Town announced via resolution the counsel it's hiring to defend the town.

Putting the cable underground cost about $11 million, which LIPA and Southampton Town agreed would be repaid through a fee called a visual benefits assessment on bills. Average residential customers pay around $4 a month for the cable fee, and that charge will continue for about 20 years.

LIPA said the underground line was needed immediately to meet rising electricity demands and to avoid summer blackouts on the East End. The decision to bury the cable line was unprecedented, Lines were buried along Scuttle Hole Road between Water Mill and Bridgehampton.

"After unsuccessfully trying to resolve the matter without litigation, LIPA commenced an action against the Town of Southampton in connection with the Town's failure to follow the terms of the court-ordered settlement agreement related to the Visual Benefits Assessment," LIPA said in a statement.

According to LIPA spokesman Mark Gross, the $201,496.54 represents the amount due to LIPA from those subject to fees but who haven't paid. The amount represents those who didn't pay all or a portion of the fee for 2012. Gross said between 2500 and 3000 customers are liable and nearly 20,000 customers are subject to the assessment.

LIPA presented Southampton Town with a list of delinquent bills in April, in a notice of claim filed before the suit. It included amounts due for 2012. According to LIPA, the town failed to pay, thus breaching the contract.

Last Thursday, a special town board meeting was held to present a resolution for retaining O'Brien and O'Brien in the matter of LIPA v. Town of Southampton. It outlined how no more than $15,000 would be spent on the defense. Town Attorney Tiffany Scarlato declined to comment on the suit.


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