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Public Utility Agency 1998
GREGORY F. YAKABOSKI TOV~N ATTORNEY JEAN W. COCHRAN Supervisor Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Telephone (516) 765-1889 Fax (516) 765-1823 OFFICE OF THE TOWN ATTORNEY TOWN OF SOUTHOLD MEMORANDUM ATTORNEY-CLIENT CONDFIDENTIAL COMMUNICATIONS TO: SUPERVISOR JEAN W. COCHRAN; TOWN BOARD MEMBERS FROM: GREGORY F. YAKABOSKI, ESQ., TOWN ATTORNE~/"~ '~-Tr; DATE: JUNE 24, 1999 SUBJECT: ELECTRICITY At Tuesday's board meeting Jack William's raised a question about electricity and the status of the Town's research on this topic. In short, neither the Town of Southold nor any Long Island Town or Village can "wheel in" and distribute inexpensive electricity~ unless LIPA consents. Whether or not the Town forms a municipal electric agency does not change this fact. The Long Island Power Authority (LIPA) owns and controls all of the Electric Transmission and Distribution ("Electric Lines") in Nassau and Suffolk County2 There are sources of inexpensive electrical power throughout the United States. Except for the 3 villages of Greenport, Freeport and Rockville Center. It is not possible to transmit and distribute electrical power in Nassau and Suffolk County without using LIPA's Electric Lines There are only two (2) ways to use LIPA's Electric Lines: 1) By Force; or 2) With LIPA's consent. 1992 ENERGY POLICY ACT By Force: A common misperception is that the 1992 Energy Policy Act grants any entity the ability to force large existing electric companies to let them "wheel in" and distribute cheap electric over electric company lines. This is not true unless certain conditions are meet. The criteria for any Long Island Town or Village municipal electric agency to force LIPA to let it "wheel in" and distribute inexpensive electric power over LIPA's lines is found in section 212(h) of the Federal Power Act (h) PROHIBITION ON MANDATORY RETAIL WHEELING AND SHAM WHOLESALE TRANSACTIONS--No order issued under this Act shall be conditioned upon or require the transmission of electric energy: (1) directly to an ultimate consumer, or (2) to, or for the benefit of, an entity if such electric energy would be sold by such entity directly to an ultimate consumer, unless: (A) such entity is a Federal power marketing agency; the Tennessee Valley Authority; a State or any political subdivision ora State (or an agency, authority, or instrumentality of a State or political subdivision).., and (B) such entity was providing electric service to such ultimate consumer on the date of enactment of this subsection (October 24, 1992) or would utilize transmission or distribution facilities that it owns or controls to deliver all such electric energy to such electric consumer. Nothing in this subsection shall affect any authority of any State or local government under State law concerning the transmission of electric energy directly to an ultimate consumer. 16 U.S.C. section 824k (h) 1994 (emphasis added) Southold cannot meet the criteria contained in 2 (B). Southold did not provide electric service prior to October 24, 1992. Southold does not own or control transmission or distribution facilities. 3 LIPA'S CONSENT LIPA's Consent: I do not believe LIPA will consent to any Town or Village wheeling in and distributing inexpensive electric power. 3 To qualify Southold could build a duplicate T&D system. (I realize that this is not a cost effective solution.) Based on the Attorney Generals Opinion to Robert Cimino neither Southold or any other Town or Village on Long Island had the right or power to condemn LILCO Electric Lines on Long Island once the LIPA statute became effective (1987) "It is also clear that a local government may not condemn the assets of LILCO or LIPA under Article 14-A of the General Municipal Law. Article 14-A provides general authority to establish municipal utilities. The exercise of such general authority by a municipality dearly is inconsistent with the specific statutory scheme applicable to the LILCO service area, providing the exclusive means of dealing with economic conditions in the service area through the purchase of LILCO by LIPA and subsequent provisions of power in the service area by LIPA. Under established rules of statutory construction, specific statutes prevail over general statutes. See. People v. Mobil Oil Corp., 48 NY2d 192, 200 (1979). Article 14-A may not be used for this purpose." Attorney General' s Informal Opinion No. 98-13, dated March 30, 1998 in response to an inquiry from Robert Cimino, Esq. Suffolk County Attorney. ATTORNEY GENERAL & STATE COMPTROLLER OPINION'S The Town has not yet received responses to its requests for opinions from either the Attorney General or the State Comptroller. However, neither of those opinions will change the fact that the 1992 Energy Policy Act would not permit a Long Island Town or Village municipal electric age ncy to force LIPA to allow them to "wheel in" and distribute inexpensive electric over its electric lines unless the above stated criteria were satisfied. The Attorney General Opinion and the State Comptroller Opinion only address the formation ora public utility agency by the Town of Southold. At the Town Board meeting Jack William's question focused on the formation of a public utility agency (electric company). A public utility agency would only be the tool to manage the purchase, wheeling and distribution electric power. A Town Municipal electric agency could purchase electric power but it would have no means of transporting and distributing it on Long Island or, more specifically, in the Town of Southold. The research on this issue has consumed a tremendous amount of time. In light of these facts please advise if my department should continue with any additional research on this issue. This opinion is based on: -The FERC opinion letter and the cited FERC decisions. (City of Palm Springs, California; Cleveland Electric Illuminating Company, et. al: Suffolk County Electric Agency) -Conversations with: FERC's legal counsel (3) three attorney's who specialize in this field. the NY.S Public Service Commission LIPA representatives legal counsel for the Suffolk County Electric Agency the Attorney General's Office the State Comptroller's Office Attorney General's Opinion to Robert Cimino Congressman's Forbes Office N Y. S Office of Consumer Protection Gordian Raccke of the Citizens Advisory Panel- Long Island's Energy Watchdog Group Jack Kulka (now a member of the Suffolk County Electric Agency Board) - General Municipal Law Article 14-A - Review of the Power Alternatives Report Review of the SEQRA rules and regulations - Review of the LIPA Statute - Consultations with an Environmental Consultant (Chick Voorhis) FEDERAL ENERGY REGULATORY COMMISSION WASHINGTON, [3. C. 20426 May 7, 1999 Ms. Jean W. Cochran Supervisor Town of Southold 53095 Main Road Southold, NY 11971 Dear Ms. Cochran: Thank you for your March 16, 1999, plans of the Town of Southold (Southold) utility. letter regarding the to establish a public The Energy Policy Act, among other things, expanded the Commission's authority under section 211 of the Federal Power Act (FPA) to require transmitting utilities to provide transmission to municlpal customers under certain circumstances. In several cases (copies of which are enclosed), the Commission has addressed whether and to what extent a municipal customer may be the beneficiary of such an order. See, e.g., city of Palm SDrin~s. California, 76 FERC ~ 61,127 (1996), order on reh'~, 84 FERC ~ 61,225 (1998); Cleveland Electric Illuminatinq Company,et al., 76 FERC ~ 61,115 (1996), order on reh'~, 82 FERC ~ 61,254 (1998); Suffolk County Electrical A~encv, 77 FERC ~ 61,355 (1996). In Palm SDrin~s, for example, the City requested an order from the Commission under section 211, directing the Southern California Edison Company (Edison) to provide transmission service. The Commission denied the City's application. It did so based, in part, on its finding that while the City had proposed to install physical facilities (i.e., duplicate meters to serve customers then served by Edison), these limited facilities, by themselves, do not deliver power. The Commission, therefore, held that these facilities did not constitute "transmission or distribution facilities," as required by section 212(h)(2)(B) of the FPA. This statutory provision, the Commission noted, prohibits the commission from ordering direct retail wheeling. It requires that a section 211 applicant demonstrate, among other things, that it "would utilize transmission or distribution facilities that it owns or controls" to deliver electric energy to the customers it seeks to serve pursuant to its transmission request. Whether Southcld would be eligible to request an order under section 211 of the FPA, however, would turn on the s~ecific facts presented. In making such a determination, moreover, it may be necessary to consider state and local laws and any contracts to which Southold may be a party. Under these circumstances, it may be appropriate for Southold first to consult legal counsel before considering any further course of action Southold may wish to take. Should you require further g~idance from the Commission on this matter, several options are available. First, under the Commission's rules, 18 C.F.R. S 388.104 (1998), a request for a legal interpretation of any statute or implementing regulation under the jurisdiction of the Commission may be directed to the Commission's Office of General Counsel (accompanied by the prescribed fee). Alternatively, any person seeking "iai declaratory order or rule to terminate a controversy or remove uncertainty" may file a petition with the Commission pursuant to Rule 207 of the commission's Rules of Practice and Procedure, 18 C.F.R. S 385.207 (1998). A request for a declaratory order is also subject to a filing fee. Requests for a legal interpretation and requests for a declaratory order should be accompanied by a detailed recitation of all facts relevant to the issues presented. Additionally, a municipal customer may be able to file a application under section 211 of the FPA. This application likewise should be accompanied by detailed recitation of all facts relevant to the issues presented. I hope this information is helpful. If I may be of any further assistance to you regarding this or any other Commission matter, please let me know. Sincerely, Director Office of External Affairs Enclosures JEAN W, COCHRAN SUPERVISOR Town Hall, 53095 Main Road P.O. Box 1179 Southold, NewYork 11971 Fax (516) 765-1823 Telephone (516) 765-1889 OFFICE OF THE SUPERVISOR TOWN OF SOUTHOLD Via U.S. Mail Federal Energy Regulatory Commission 888 First Street, NE Washington. D.C. 20426 Dear Sir/Madam: March 16, 1999 Thc Town of Southold desires to form a "public utility service" pursuant to Article 14-A of the General Municipal Law. which article is entitled "Gas and Electric Service". The Town's plan is to: "form this public utility seorice, purchase low cost power (electric) wholesale on the open market and distribute this power to the residential and commemial users in the Town of Southold. The town public utility service would have no utility infrastructure, such as transmission and distribution lines. Instead. the town utility agency would act as a "pass through" or in the capacity of an energy broker". In 1992 the Energy Policy Act was enacted which "deregulated" the electric and gas industries. Please advise as to whether the Town of Southold's plan, as set forth above, is permitted under thc Energy Policy Act. Please feel free to call with any questions. Vc~ truly yours, chran. Supervisor Town of Southold JWC:ck Commission Opinions, Orders and Notices 61,595 (F) A presiding administrative law judge, to be designated by the Chief Administrative Law Judge for that purpose pursuant to 18 C.F.R. § 375.304, shall c~nvene a prehearlng confer- ence in this proceeding to be held within 20 days of the issuance of this order, in a hearing or conference room of the Federal Energy Reg- Appendix A Part I: Accepted & Suspended to be Effective January 1, 1997 To FERC Gas T~££, Second Revised Volume No. I-A First Revised Sheet Nos. 21 fred 2lA Part III: Rejected To FERC Gas TarffL Second Revised Volume No. I-A Alternate First Revised Third Revised Sheet No. 10 To FERC Gas Tat'ill, Second Revisc~ Volume No. I-A First Revised Third Revised Sheet No. 10 Part II: Accepted to be Effective August 1, 1996 * Also filed a protest. [¶61,1151 Cleveland Electric Illuminating Company, Docket No. ELg6-g-000 Cleveland Public Power of the City of Cleveland, Ohio v. Cleveland Electric Illuminating Company, Docket No. ELd6-21-000 Order Denying Petition for Declaratory Order and Granting Complaint (Issued July 31, 1996) Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. 1. Introduction These cases, a petition for declaratory order and a complaint, involve the same transaction. Cleveland Public Power of the City of Cleve- land, Ohio (Clevelatld) ~eeks transmission ser- vice under an existing transmission agreement with Cleveland Electric Illuminating Company (Cleveland Electric). Cleveland plans to use the transmission to purchase power from a third party. It will tl~n combine the purchased power with its oti~r resources so that, begin- ning September 1, 1996, it can serve an ex- isting (i.e., through August 31, 1996) r~tail customer of Cleveland Electric. Cleveland Electric opposes the request. Each party asks us to decide the dispute. For the reasons discussed below, we agree with Cleveland that Cleveland Electric is obli- Appendix 1~ Natural G~s Clearinghouse Public Service Commission of Nevada Sierra Pacific Powe?.~Com~an~* Southwest Gas~dr~ration FERC Reports gated under an existing agreement to provide the requested transmission service. We further conclude that the requested transmission ~'r- vice does not violate section 212(h) of thc Fed eral Power Act (FPA). Therefore. wc will dcny marily decide thc complaint in rawer (, Ck'.'~ land. Finally, we dismiss Clevchmd l~kcnic'~ prejudice to refiling and demonstralin~ ~h;n i~ meets the criteria for seeking recovery under our recent Open Access Rule. II, Background Cleveland, a municipal utility, is dependent on Cleveland Electric for transmission service to reach alternate suppliers. Cleveland and Cleveland Electric have engaged in door-to- ¶61,115 61,596 Cited as "76 FERC ¶ .... " ?Zl 8-~-96 early 1900's, and the instant controversy arises out of a retail customer's desire to change power suppliers. The Medical Center Company (Medical Center) has been served at retail by Cleveland Electric for approximately 60 years. Recently, however, Medical Center decided to Electric (i.e., aa of September 1. 1996). On March 1, 1995, Cleveland and Medical Ag~ement (Cleveland/Medical Center Agree- ment), Medical Center will purchase up to 50 MW of power and energy from Cleveland for a period of five years, commencing September 1, 1996. Cleveland will deliver the power and energy to Medical Center over a 138 kV trans- mission line owned by Cleveland. On August 11, 1995, Cleveland sent a letter to Cleveland Electric requesting transmission service under the parties' existing agreement ¶61,115 hibited under sections 211 and 212 of the FPA. 16 U.S.C. § § 824j, k (1994).3 On December 13, 1995. in Docket No. EL96-21-000, Cleveland filed a complaint, m~- tion for summary disposition and motion for expedited procedural schedule. Cleveland states that Cleveland Electric already is obli- gated to provide the requested transmission service under the parties' existing transmission service agreement4 and under certain antitrust conditions in a Nuclear Regulatory Commis- sion (NRC) license.5 Cleveland requests that the Commission expedite the r~olution of this matter so that the proposed power sale may commence as scheduled (on September 1, Federel Energy Guidelines Commission Opinions, Orders ond Notices 61,597 On December 28. 1995, Cleveland Electric filed an answer to Cleveland's pleading. On January 11. 1996, Cleveland filed an answer in power to [Clcvela~d]."w 1II. Discussion A. Procedural Issues §385.214 (1995), the timely, unopposed mc- Docket Nos. EL96-9-000 and EL96-21-000 serve to make them parties to the respective proceedings. Edison and LILCO concede in their filings that they have no direct interest in this case, but wish to intervene because of the industry- wide implications they see arising from a ruling here. Clevel~a~,d argues that Edi~ ~ud LILCO should not be allowed to intervene because the Ohio Power/Cleveland transaction involves the parties' local, case-specific circumstances and w/Il not estnblish precedent for the entire in- dustry. Ohio Power also opposes intervention, on the grounds that exploring the generic im- plications of this case would delay the start of service to Medical Center. The controversy in this proceeding involves not only case-slmcific i~ues, but also the Commission's interpretation of section 212(h). Accordingly. we £md it in the public interest to grant the motions to inter- vene of Edison and LILC0. B. Cleveland Electr/c's Obi/gar[lin to Provide the Transrnlss/on Service at Issue la This Pro- 1. We find that Cleveland Electric is obli- gated to provide the requested transmission service under Cleveland Electric's currently ef- fective transmission service agreement? The relevant sections of this agreement require Cleveland Electric to provide for the transmis- sion o! electric power. [B}etween delivery (interconnection) points o~ [Cleveland Electric] to, from, between, or among rural electric ceoperative~ er munici- palitie~ located within the Combined CAPCO (Central Area Power Coordination Group) Company Territories (CCCT) .... [ It further provides that: [Clevelsnd Electricl shall provide Trans- mission Service within the limits of the ca- pacity of its bulk transmission facilities, and related facilities .... to the extent that such Transmission ~ervice does not impose a bur- den upon the system of [Cleveland Elec- tricl.{iai The language o[ the parties' agreement thus states that Cleveland Electric will transmit to "municipalities located within ... CAPCO," which includes Cleveland, if Cleveland Electric has sufficient transmission capacity and doing so will not impose a burden on Cleveland Elec- tric's transmission s~tfflll.14 Hel'~, there is Ilo 960 Fed. Reg. 65/29 (1995). In re~ to a motion far extension of time filed by Cleveland Elec- FERC Reports ¶61,115 61,598 Cited as question that Cleveland Electric has the neces- sar3, capacity, and the requested transmission would impose no burden on its system. Cleve- land Electric stated in its November 2 and 3. 1995 letters rejecting Cleveland's request that lack of sy~tom capacity played no part in the utility's refusal; Cleveland Electric stated, '[p]lease be further advised that [Cleveland Electric's] refusal to provide the requested transmission services is not due to any limita- tion on the [Cleveland Electric] transmission system .... ..is In addition, Cleveland Electric has not claimed in any of its pleadings that the transmission at issue here would impose a bur- den upon its system. Therefore, pursuant to the terms of the transmission service agreement, Cleveland Electric must provide the transmis- sion service necessary to implement the Ohio Power/Cleveland Agreement. 2. We next address Cleveland Electric's argu- ments that we may not require it to provide the requested transmission service because that would violate sections 212(h) of the FPA, 16 U.S.C. § 824k(h) (1994). Cleveland Electric ar- gues that while, on paper, Ohio Power will make a wholesale sale to Cleveland, which, in turn, will serve Medical Center at retail, the reality belies that description. In support, Cleveland Electric argues that the price Cleve- land will charge Medical Center is directly tied to the costs of the power and energy Ohio Power will supply to Cleveland. Cleveland Electric also cites to the legislative history of the Energy Policy Act of 1992 (EPAct), and argues that the Ohio Power/Cleveland transac- tion is precisely the kind of transaction that section 212(h) prohibits? Finally, Cleveland Electric argues that it should not be requir~ to provide the requested transmissioo under its transmission service agreement since '[i]mplicit in any transmission tariff intended (Footnote Continued) ¶61,115 to provide for wholesale transmission is a legiti- mate wholesale sale.''17 In response, Cleveland argues that sections 211 and 212 are irrelevant since the Commis- sion "has authority to order a utility to comply with its filed tariff ... totally independent of any limitations upon its enhanced Energy Pol- icy Act authority.''~s In support, Cleveland cites an order in which the Commission held that the utility was required by an existing contract to provide transmission service to a customer, stating that "no expansion of a mil- ity's commitment to wheel is being ordered, but rather a utility is being required to per- form the service it voluntarily obligated itself to porlorm by entering into the [contract].'~9 Cleveland also responds to Cleveland Elec- tric's argument that the Ohio Power/Cleveland Agreement is not a legitimate wholesale sale. Cleveland states that the power it will purchase from Ohio Power is not earmarked for any particular retail customer, and that the power it supplies to Medical Center will be commingled with power from other sources. Cleveland argues that the fact that the pricing of Cleveland's retail sale to Medical Center is tied to the pricing of Cleveland's purchase from Ohio Power does not transform the requested transmission for power under the Ohio Power/ Cleveland Agreement into retail wheeling. In support, Cleveland states that upon the termi- nation of Medical Center's current contract with Cleveland Electric, Cleveland will he un- dertaking the obligation to serve Medical Center. Cleveland adds that it will have the obligation to serve Medical Center even if the power to be purchased from Ohio Power should become unavailable. Additionally, Cleveland states that the price Medical Center will be charged is assured, regardless of the actual sources from which Cleveland will purchase the Cleveland Electric Answer in Docket No. EL96-21-000 at p, 4. Federal Energy Guidelines 771 ~-23-96 Commission Opinions, Orders and Notices 61,599 We reject Cleveland Electric's arguments that the Commission is prohibited by section 212(h) of the FPA from ordering the requested service for two reasons. First, we conclude that section 212(h) does not preclude us from en- forcing contractual commitments on file with the Commission, Second, we conclude that, even if section 212(h) applies, on the facts of this case the requested transmission does not violate 212(h), There is nothing in the language of section 212(h) or its legislative history to indicate that 212(h) prohibits the Commission from issuing any order under the EPA that is conditioned upon or requi~es the transmission of electric certain entities that will sell the electric energy interpret section 212(h) to prohibit the Com- mission from t~quiring public utilities to fulfill authority, or instrumentality of a State or a political subdivision);.., and (B) much entity was providing electric ser- vice to such ultimate consumer on [October 24, 1992] or would utilize transmission or distribution facilities that it owns or controls to deliver all such electric energy to such electric consumer. 16 U.S.C. § § 824k(h) (1994). Here, section 2t2(hXl) is not violated be- cause the transmission will be over Cleveland Electric's lines to Cleveland. Cleveland's sale to Medical Center will be over Cleveland's 138 kV line? Thus, this case simply does not involve the transmission of electric energy by Cleve- land Electric directly' to an ultimate consumer. Nor is section 212(h)(2) violated. Under sec- tlon 212(hX2), the Commission may not re- quire the transmission of energy to, or for the benefit of, an entity if such electric energy would be sold by such entity directly to an ultimate consumerg4 un/ess certain conditions are met. Here, Cleveland meets those condi- tions. Cleveland is an instrumentality of a state or a political subdivision thereof and it will utilize transmission or distrihutlola liras that it owns or controls (i.e., the 138 kV line) to deliver all the electric energy to Medical Center. Additionally, there is nothing in the facts of this case that would be inconsistent with the intent of Congress as expressed in EPAct's leg- islative history. Congress was primarily con- cerned that the Commission he prohibited from issuing orders which r~quire wheeling where the substance of the transaction amounts to retail wheeling because the wholesale sale is, in fact, a subterfuge intended to circumvent the would violate section 212(h). FERC Reportt ¶61,115 61,600 Cited as "76 FERC ¶ .... " However, Congress also dearly intended that wheeling to an entity which meets the cr/ter/a in section 212(hX2XB) not be considered a pro- hibited sham wholesale transaction? Thus, the Commission may not order transmi~ion to pa- per intermediaries used as a vehicle for end- users to bypass their local utilities. Here, in contrast, Cleveland clearly is not a paper en- tity. It has for many years beth owned and operated generation, transmission and distribu- tion facilities, and competed w/th Cleveland Electric. Given the above findings, there is no need to respond to Cleveland Electric's arguments that Ohio power's sale to Cleveland Is not a legiti- mate wholesale sale. We need only find that the transmission service meets the criteria of section 212(b), and we have done so. In conclusion, we do not interpret ~ectlon 212(h) to preclude the Commission from eh- ¶61,115 harm would appear to be only monetary, and that is not adequate justification for a stay? Therefore, we find that Cleveland Electric has failed to present sufficient grounds to grant 1. Cleveland also argues that Cleveland Elec- tric is obligated under License Condition No, 3 Cleveland Electric to comply with the NRC license conditions, regardless of whether Cleve- land Electric bas filed the conditions with this Cleveland Electric's transmission service agree- ment provides a sufficient basis to decide this dispute, we need not reach the issue of whether the requested service al~o may be required under NRC Licensing Condition No. 3. 2. Because we are dismissing as moot Cleve- land Electric's petition (in Docket No. EL96-9-000), we will dismiss Cleveland's re- quest to consolidate the p~oceedings in Docket No. EL96-9~00 and Docket No. EL96-21~00. 3. Cleveland Electric asks that, if we decide installed to provide service to Medical Center.''31 Cleveland Electric filed its petition pr/or to the Issuance of the Open Access Rale.~ and prc~edures by which a public utility may (2) of power generated by m' available to the other 771 ~23-96 Commission Opinions, Orders and Notices 61,601 seek to recover stranded coats?a Accordingly, we will dismiss Cleveland Electric's request without prejudice to making a filing in a sepa- LILCO are hereby granted. (C) Cleveland Electric's petition for a declar- atory order is hereby denied, as discussed in the body of this order. (D) Cleveland's request for consolidation of Docket Nos. EL96-9-000 and EL96-21-000 is hereby dismissed as moot. (E) Cleveland Electric's request for a stay is hereby denied. (F) Cleveland Electric's request for stranded [¶el,lie] LG&E-Westmoreland Southampton, Docket Nos. EL94-45-001 and QF88-84-006 Order Granting Rehearing in Part and Denying Rehearing in Part, and An- nouncing Policy Concerning Non-Compliance with the Commission's QF Regulations (Issued July 31, 1996) Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. On August 9, 1994, LG&E-Westmoreland Southampton (Southampton) filed a request for rehearing of the Commission's order issued in this proceeding on July 7, 1994. LG&E-West- moreland Southampton, 68 FERC 961,034 (1994). In that order, the Commission denied the request by Southampton, the owner of a topping-cycle cogeneration facility, for waiver of the Commission's operating standard appli- compliance with the Commission's QF regula- tions during some past period of operation, and in order to encourage respect for and compli- ance with those regulations, we take this oppor- tunity to announce a policy of general application concerning the consequenc~es of failing to retain QF status. Background We discuss the background of this proceeding in detail in the previous order. In brief, South- ampton owns a 62.6 MW topping-cycle cogeneratlon facility located in Franklin, Vir- ginia that failed to meet the Commission's op- erating standard for qualifying cogeneration facilities during calendar years 1991 and 1992. Southampton previously was granted limited waiver to excuse non-compliance for calendar year 1991. In this proceeding, Southampton requested an additional waiver to excuse non- compliance for calendar year 1992. Southamp- ton sought to justify a second waiver on the fact that, among other things, the facility was engaged in start-up and testing operations dur- ing a portion of 1992, and that the third-party plant operator mistakenly delivered (without FERC Reports ¶61,116 61,694 Cited as "76 FERC 11 .... " think it is unnecessary to address the FT-2 rate ~ts a negotiated rate. I would instead approve this non-traditional, generally applicable rate schedule under existing Commission prece- dent.3 Shell proposes initial rates and sergices for a new facility that will bring deep water OCS gas onshore. Shell designed an FT-1 rate along the lines of traditional two-part cost-based rates. It also offers the non-traditional FT-2 rate sched- ule. Because the FT-2 rate is deemed a 'negoti- ated rate" under our Policy Statement. the FT-1 rate becomes the de £acto recourse rate, might m-gue for the uniqueness of this outcome. However. this much seems apparent with re- spect to the Commission's application of policy. First. a negotiated rate may b~ a t~riff of general applicability, not just an individual deal negotiated against the backdrop of an established fully allocated Pm-t 284 rate. Sec- ond. th~ Commission is already prep~ to approve negotiated terms and conditions, e~pe- cially where (as in this case) there is no possi- bility of degrsding the part 284 service of non- participants in the negotiations (there are none here). In the final analysis, it is both unnecessary and inadvisable to elasticize the negotiated [¶ 61,127] City of Palm Springs, California, Docket No. TX96-7-000 Order Denying Transmission Application (Issued July 31, 1996) Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. On March 1, 1996, the City of Palm Springs, California (Palm Springs) filed an application Federal Power Act (FPA), 16 U.S.C. § §824j-k 212Cn). a ~ee, e~g., Kern River Gas Transmission Corn. party. 53 FI~RC ] 61.172 (1990) (permitting the nego- tiation of initiaI service agreements differing from the standard firm transportation service); Pacific Gas ¶61,127 .... *' Id. at p. 61,241 (emphasis 771 8-23-96 Commission Opinions, Orders and Notices 61,695 ties, and metering equipment at the delivery points to Palm Spring~' customers.2 Palm Springs states that it wants the re- 1 61.073 (19~S). FERC Reports 'Ii* 61,127 61,696 Cited as "76 FERC ¶ .... " by means of which Palm Springs provides retail electric service to municipal facilities, as well as a limited number of other customers, and an artLqcial barrier to Palm Sprin~s' entry into continue Edisae's retail electric business in to Palm Springs, not f~ custome~ directly, ¶$1,127 and therefore, ~vould not a~fect the authority of the California Public Utilities Commission (California Commission) regarding retail whe~¥mg. With regard to stranded costs, Palm Springs argues that the requested order should protect Palm Springs from allegedly antlcompetltive recovery of straladed costs by Edison, and maintains that the Commission is the proper forum for addressing the recoverability of such costs. Palm Springs argues that nothing in the Franchise Ordintmce or in California law enti- tles Edison to expect that palm Springs will not enter into competition with it to provide power (other than Palm Springs' existing 12 kV Commission Opinions, Orders and Notices 61,697 line), will not build new facilities to serve new customers, and will not assume an obligation to serve. Ed/~on argues that meters do not deliver power, they merely measure it; and even if meters did deliver power, Edison woald already have wheeled power to the ultimate consumer by the time that it reached the Palm Springs' meter. Thus, Palm Springs would not be dellv- erlng power to Palm Springs' customers. Edison argues that neither the Franchise Or- dinance nor any statutory condemnation provi- sion gives Palm Springs authority over Edison's distribution facilities within Palm Springs. Additionally. Edison asserts that if Palm Springs' were technically eligible for the ~er- vice, the Commission should deny the applica- tion on the independent grounds that ordering ~ervice would not be in the public interest. Edison argues that Palm Springs' plan would evade the California Commission's restructur- ing program in California, and by merely in- stalling meters Palm Springs attempts to remove its constituents from the California Commission's plan that provides for, among other things, stranded cost recovery. Edison argues that if Palm Springs' plan is approved by this Commission, the states would have no control over direct access and virtually all in- vestor-owned utility assets would be subject to Commission regulation. It argues that granting Palm Springs' request would so severely under- mine the California Commission's decision that a violation of section 212(8) would result.$ Edison also asserts that Palm Springs' propc- sal is not pro-competitive but seeks to avoid stranded costs. Consequently, Edison asks that if the Commission orders transmission service, zation (TURN), and School Project {'or the and answer to protests that supports the appli- cation. Roy Lippi (Lippi) filed untimely collec- tions of citizens' letters compiled from "Letters to the Editor," the "Desert Sun," Palm Springs, California supporting the application. Heartland Energy Services (Heartland) filed a motion to intervene in support of the filing and a teclueat for expedited treatment in sup~ port of Palm Springs' application, Heartland argue~ that: (Il the request is not a sham whole~ale tran~actlon in that Palm Springs could simply build its own system or condemn Edison's facilities and in both cases qualify for transmission service; (2) the request is pro- competitive; (3) from a technical perspective there is no difference between service at 2 kV and service at 500 kV other than the identifica- tion of cost of that service; (4) the only costs to be considered stranded are those related to bio. or a/ter December 20, 1995, whether they take FERC Re,om ¶ 61,127 61,698 Cited as "76 FERC ¶ .... " other options; and (7) ordering transmission here would violate section 212(h) since it would directly interfere with the California Commis- sion's timetable for direct access and stranded Lastly. the California Commission argues that oedering the requested transmission would transition charge as determined by the Califor- Consequently, the California Commission ar- and would federalize the recovery of stranded ¶61,127 ute and is a sham whole~ale transaction. EEI through Palm Springs' use of meters that dupli- cate Edison's meters to facilitate a retail sale to EEl's former retail customers. EEl argues that a meter is not a distribution facility and utilities must have an opportunity to r~cover stranded costs. EEI argues that Palm Springs is attempting to avoid the existing managed state regulatory and legislative transition to increased retail electric competition in Califor- nia, which includes stranded cost recover,. the requirements for municipalization imposed under state law. United Illuminating Company (United Illu- minating) and Rochester Gas and Electric Cor- poration (Rochester) filed timely motions to intervene and protests adopting EEI's argu- ments above. Virginia Electric and Power Company (VEPCO). Atlantic City Electric Company (Atlantic). Da~ton Power and Light Company (Da~ton), Texas Utilities Electric Company (Texas Utilities), Central Maine Power Com- pany (Central Maine), and Niagara Mohawk power Corporation (Niagara Mohawk) filed timely motions to intervene and protests as- and Toledo). Duke Power Company (Duke). ments of section 212(hX2XB). GPU Service Corporatinn (GPU Service) stating that Palm Springs bears none of the Springs ns a bona fide dlstribut~ of energy erative Association (NRECA) filed a timely Federgl Enerigy Guidelines Commission Opinions, Orders and Notices 61,699 F~CR~o~ to pay higher costs; and (5) Palm Springs' muni-lite plan may produce higher electric rates than would otherwise result under the California Commission's r~structuring pro- gram, or may result in an additional tax bur- den. to receive bundled retail service, ~ho~ld be con- ¶ 61,127 61,700 Cited as "76 FERC ¶ .... " serve the same loads. Finally, Palm Springs states that t~e Commission should provide guidance as to what facilities would satisfy the ~q ulrements of section 212(hX2){B). Edison filed a response to Palm Springs' re. ply to various motions. Edison argues that under Palm Springs' definition, "facilities" would include contracts, accounts, and records notwithstanding concern expressed in the legis- lative history that paper entities would try to claim eligibility for transmissiotx service to which tl~y are not entitled. Ediso~ also asserts that Palm Springs' definition of "deliver" to legislative history, which indicates that an eh- entity to another while owning no physical facilities is a sham wholesaler. Edison states that under Its retail tariff the point of delivery is complete prior to the electricity reaching the meter. Edison argues that under Palm Springs' logic, it could buy a wall socket inside a house and still meet the PPA test for ownership of facilities thnt deliver power because until the is not delivered. Edison argues that Congress owned utilities providing distribution service and electric sales will become Commission reg- ulated because servic~ formerly provided at retail will be deemed a wholgsale transaction. With respect to stranded costs, Edison gues that Palm Springs' proposal if legal, wo~ld result in chaos; there would be two corn- Under rule 214 of the Commission's Rules of Practice ~nd Procedure. the timgly, unopposed notice of intervention of the Califo~nin Com- mission and the timely, unoppos~ motions to Inter~ene of F~lison, California Water, cahella Valley, ERror. Cltlc'~ Comortium, port- land G~leral, ELCON, TURN, SPURR and RlgMAC, Heartland, NARUC, EEl. United luminating, Rochester, VEPCO, Atlantic, Day- ton, Texas Utilities, Central Maine, Niagara Mohawk, Southern, Florida power, Carolina Power. Cleveland and Toledo, Duke, Common- wealth Edison, LILCO, GPU Service, NRECA, PG&E. NYSEG, Burbank, Cahuilla Indians, Southern Indiana, California Manufacturers, Management Group, Electric Clearinghouse, Illinova. lES Utilities, San Die~o, San Fran- cisco, Sierra Pacific. NCPA, El Paso, and PSE&G serve to make them parties to this proceeding. We will grant the untimely mo- tions to intervene of ELCON, Lippl, Nevada U.S.C. § 824k(g) { 16 U.S.C. § 824k(h) (1994) (emphasis added), Fedm'M En~rg~ Guldalln~ Commission Opinions, Orders and Notices 61,701 Ana/ysfs Our decision in this case turns on the Com- missieo's interpretation of section 212(h). This section limits the Commission's otherwise broad authority under section 211 to order a transmitting utility to provide transmission service to an eligible customer, except in lim- ited circumstances identified in section 2120aX2). The extent of these exceptions are at issue in this case. The parties have made numerous arguments as to why the transmission sought by palm Springs would either satisfy or violate section 212(h). We do not need to address many of these arguments because, even assuming that the other statutory hurdles have been over- come, Palm Springs would not meet either of the requirements of section 212(hX2XB). Pahn Springs was not providing electric service on October 24, 1992, to all the ultimate consumers for whom it seeks the transmiadoo of electric energy in its application.6 Nor, as discussed below, are we satisfied that Palm Springs "would utilize transmission or distribution fa- cilities that it owns or controls to deliver MI such electric energy to such electric consumer." (Emphasis added.) Section 2120aX2) prohibits the Commission from ordering transmission service "to, or for the benefit of, an entity if such electric energy would be sold by such entity directly to an ultimate consumer," unless beth conditions of subsection 212(hX2XA) and (B) are satisfied. The central question in this case is wbether Palm Springs meets either of the circumstances in 212(hX2XB), i.e., whether it was "providing electric service" to the consumers it seeks to serve ma the date of enactmoat of this subsec- tion [October 24, 1992] or "would utilize tran~ customers on October 24, 1992, wheeling fcc the benefit of those customers is not at issue here. Customers currently being served by Palm Springs off of Palm Springs' existing 12 ky line include several municipal facilities and a limited number of commercial entities associ- ated with the municipal facilities (for example, Palm Springs provides service to beth the air- port and the airlines). Indeed, Edison has indi- cated that it is willing to wheel power for the benefit of these customers? Rather, the issue before us concerns whether Edison under sec- tion 211 can be compelled to wheel power so that Palm Sprin~s may sell power to poten- tially all of the nearly 40,000 consumers in Palm Springs that are currently retail custom- ers of Edison. For reasons described below, we conclude that we cannot compel Edison to do so. In support of its arguments that wheeling for the benefit of new customers satisfies 2120aX2XB), Palm Sprin~ argues that by in- stalling duplicate meters between the distcibu- tion facilities of Edison and the main circuit breaker of each electric consumer in palm Springs electing to receive service from the City, it will in fact be utilizing transmission or distribution facilities that it owns or controls to deliver ail such electric energy to such electric consumers.8 However, we cannot agree that owning duplicate meters which simply measure the flow of power from Edison's distribution system to the retail customer meets the statu- tory requirement. Congress did not define what constitute~ "distribution facilities" or what it meant by facilities that an entity would "utilize ... to deliver ail such electric energy to such electric consumer" for purposes of ~ction 212(hX2XB). This is understandable because the character of particular facilities and their use is a question of fact that may vary from case to case. In the face of this statutory ambiguity, we turn to other factors, including the Commission's prac- ficai understanding of the industry and legisla- Speln~ appUcafloo, e~ait~t L. An am~lysis prepaid by a pmh~ ~ln~ cm~ait~nt estlmnted thnt the total App. L FERC Repor~ ¶ 61,127 61,702 Cited as "76 FFRC ¶ .... " 771 &23-96 tire history to suggest an appropriate interpretation. mate consumers involves the situation of a I} 61,127 Federal Enerly Guidelines Commission Opinions, Orders and Notices 61,703 138 Co~g. Rec. S17613 (daily ed. Oct. 8. 1992) (statement of ~en. Johnston) (emphasis added).11 The Conference Report requi~ that the transmission service authorized by the FERC order may not lead to retail wheeling, regardless of the terminolo~' used in the transmis..~ion request or FleRC order. Thus, the FERC has no authority to order or au- thorize a utility to provide transmission ser- vices where the practical result of the order will he to bypass the utility's retail service and deliver wholesale power to a retail cus- tomer. The FERC must ensure that, in a particular fact patton in an individual case. it d~es not allow or approve transactions that added)? t995), mad//~ed. D. 96-014)09 Oan,20. 199~), 16~ PUR4~h 1 (1996). ¶ 61,127 61,704 Cited as"76 FERC ¶ .... " 7n ~-ge In Florida Municipal Power Agency v. Flor- ida Power & Light Company,15 we determined that, as a general matter, the availability of transmission service enhances competition in power markets by increasing the power supply options of buyers and the power sales options of sellers and lends to lower costs to consumer~. We have also said that, so long as the transmit- ting utility receives full and fair compensation finding in past cases is outweighed by a c~n- Si}rings residents to switch power suppliers im- mediately would evade the decision of the Call- competition over several years and to impose a competition transition charge for rec~verlng the associated retail stranded costs. Indeed, the vice appear~ to be to avoid the competition Commission. An order by this Commission un- lng Palm Springs' application would wrongly dissatisfied with the decision of the state regu- deny palm Springs' application. The Commi~on orders: Palm Springs' application is hereby denied. ¶61,127 mined that this so-called "municipalizatien- lite" is not permissible under the Federal Power Act. I believe that this is a close decision. Palm Until now, the Commission has always found that transmission service under section 211 is in the public inte~st, provided the transmit- unreasonable impairment of reliability. Florida Municipal Power Agency v. Florida power & (1993). However, the majority in this case, quite inexplicably, warns that any future re- quest for section 211 transmission service which, unlike the Palm Springs' proposal, satis- //es the requirements of ~ection 212(h) may nevertheless be denied as contrary to the public interest, l~vidently, this cotfld happen if such a market access initiative: (I) does not conform to the timetable of the state's retail competi- tion plan, in this instance the phase-in of di~ct retail access by the California Public Service Commission (CPUC); (2) *'evades" the state's retail stranded cost recovery plan, in this in- stance the CPUC's "eompotition transition change' (CTC); or (3) would otherwise under- Federal Energy Guidelines 775 9-1996 Commission Opinions, Orders and Notices 61,705 mine ~ c~ntradiet 'a state commission's deci- sims in these circumstance~" Moreover, the m~ioclty c~cludes, without substantiation, that Palm Springs' "primary ecooomic motive" far its proposal is not to obtain lower rates or additional power supply options, as the City plausibly contends, but simply to avoid the CTC. For the following reasons, I helieve the~e findings are ill-advised. With respect to its f'u~t l-mding (i.e., that the Pahn Springs' plan evades the GPUG's decision to phase-la competitima over several years), the majority registers its blanket support for any timetable for competition proposed or adopted by state regulatar~ This level of deference is problematic on its face. Under it, state retail competition plans, even if tentative or unre- viewed, effectively trump the lawful use of state municlFmliTatiml law alld section 211 to gain transmission access. The majority thus sanctions and perhaps invites purposeful and lengthy delays la implementing even legiti- mate plans to obtain market acces~ That may economically penalize currently captive cus- tomers. With respect to the majority's related find- ing that the Palm Springs* plan would evade the CTC and is therefore not in the public inte~st, the PMm Spt/rigs order ignores the state's ability to impose an exit fee on depart- ing customers and this Commission's own hold- ing in Order No. 8~8 that it would he the "primary forum" for dealing with stranded costs resulting from new municipalizations,a I do not believe that Palm Springs' possible eva- sims of the CTC is tantamount to avoidance of stranded c~st recovery altogether, although the majority appears to regard them as indistin- guishable. It is already clear that the CPUC has not hesitated to act in other instances to prevent departing customers from avoiding the CTC.s The majority's third indictment of plans like Palm Springs' (i.e., that "an order undermining or contradicting a state commission's decision in these circumstances is not in the public interest") is similarly questionable. In my earl- mation, this amounts to a premature blanket endorsement of the CPUC's restructuring plan, the closely related bulk power aspects of which are pending before this agency. including through municipalization, the re- sponsibility for stopping it in the public inter- section 212(g) which fences this Commission clines to make a finding that the Palm Springs' III. We should defer to state regulation, as ap- propriate, consistent with Order No. 888. Moreover, I respect the CPUC's hard work as well as the achievements of the California elec- tric power community in formulating a restruc- turing plan. But, it is clearly too early for the kind of blessing that the majority bestows on their work product. It seems to me that, at this early stage in restructuring, the public interest is best served by an openness to innovation-- from .whatever source. If there are problems with those innovations, such as the violation of section 212(h) in this case, the Commission's case-specific analysis of them will bring those problems to light. Similarly, if analysis reveals a potential economic dislocation or even an express purpose to evade regulation, the Com- mission or state regulatory agencies will he able to avoid or remedy those difficulties. But, it is very troubling to me that the majority suggests that it will deny an otherwise lawful service request because it fails to conform to the preconceptions and schedulcs underlying even incipient and untested state restructuring pro- grams. I submit that this places primary value on market regimentation and predictability, not innovation. Or, as Alfred Kahn has wisely observed: "regulation confronted with competi- tion will have a systematic tendency either to suppress it .... or to orchestrate it and control the results it produces." The majority confirms his observation. I must therefore dissent to the public inter- est part of the Palm Springs order. FERC Reports · ¶61,1~? 790 1-24-97 Commission Opinions, Orders and Notices 62,543 (Issued December 31, 19915) By Direction of the Commission: Lois D. Cashell, Secretary. Reference: Twenty-Ninth Revised Sheet Nos. S0 and 51 to FERC Gas Tariff, Fifth Revised Volume No. 1. The Commission accepts Northern Natural Gas Company's (Northern) November 27 fil- ing, to be effective January 1, 1997 and dis- misses Northern's request for waiver of the notice requirements as unnecessary, On November 27, 1996, Northern filed the tariff sheets referenced above in Docket No. RP97-1114300 to revise the "gas supply re- alignment" (GSR) reservation surcharge for Rate Schedules TF and 'IFF from $0.435 per MMBtu to $0.446 per MMBtu for the recovery of its past unrecovered GSR costs. The filing is consistent with the terms of Northern's Global Settlement and its immediate effective tariff. Northern requested waiver to obtain the ef- fective date of January 1, 1997. The referenced tariff sheets were submitted on November 27, 1996, which will allow a thirty-day notice pe- riod before the requested January I effective date; therefore, waiver is unnecessary. Notices of intervention and unopposed timely filed motions to intervene are granted [¶ 61,355] Suffolk County Electrical Agency, Docket No. TX96-4-000 Proposed Order Directing Transmission Services and Ordering Further Proce- dures (Issued December 31, 19~6) Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. On January 17. 1996. pursuant to sections 211 and 212 of the Federal Power Act (FIPA). as amended by the Energy Policy Act of 1992 (Energy Policy Act). 16 U.S.C. §§824'~824k (1994). Suffolk County Electrical Agency (Suf- folk) applied for an order from the Commission requiring Long Island Lighting Company (LILCO) to provide firm network transmission service, as well as certain andllary, billing and collection services. Suffolk seeks such services to allow it to purchase, for rec~ale to residential, commercial and industrial customers, lower- cost power to be supplied to Stlffolk by North- east Utilities (NLD, Enron Power Marketing, Inc. (Enron), and o~her po~er supplle~ that Suffolk may designate. In this proposed order, we order LILCO to provide transmission services to the extent nec- essary to accommodate Suffolk'$ proposed sales FER¢ Report~ of power to customers to which it was provid- ing electric service on the date of enactment (October 24, 1992) of the Energy Policy Act. We also order further procedures to establish the rate% terms a~d. conditions o1 such ~ervices. We will deny at this time, without prejudice, Suffolk's application to the extent it seeks ~xansmi~on ser~ice~ from LILCO to accom- modate power sales to customers it was not serving on the date of enactment of the Energy Policy Act. We affor~ Suffolk the opportunity to file a new application with the Commission identifying with specificity the facilities it in- tends to own or control after the date of Com- mission action, to the extent it seeks transmission service to accommodate power bet 24, 1992. ¶ 61,355 Ä + - @ € @ € @ € @ € € @ @ @ € € € € € € € € € € € € € € j Àâ WVX\[ Y € œì LWWVX[ Y € œî LWWV][ Y € œê L WWZZ[ Y € œè KWW[V € œo <WXWW[ Y € œÝ JWXWX[ Y € œØ IWXXX[ Y € œÛ JW[VX[ Y € œô ZW[X^[ Y € œÞ JW]WV[ Y € œí LW]WZ[ Y € œñ LW]X\[ Y € œÓ IW][Y[ Y € œö ZXWVY[ Y € œk <XWW[ Y € œ¢ CXWX\[ Y € œï LXXY[ Y € œÚ JXm € œœ BYVW[ Y € œ BYVX[ Y € œ¥ CYV[[ Y` € œ¦ CYWW € œÌ HYYY[ Y € œå KY\ € œË HZ[\ € œÍ HZ]Y[ Y € œæ KZ^[VV € œ} >[ WV` € œƒ ? 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WVX^ € RG ® WVX^ ^ VY € RF ® W]^Z ^ VY € RH ® X € R@ ® Y € RA ® [ojpjWVvo € RS ° [ojpjWVvo` € RT ° ^ YYVX € RP ¯ ^ Y[Y[ € RR ° ^^]V € RD ® ^^]W € RJ ¯ ^^]X € RN ¯ ^^]Y € RY °@ WWVY ^ VY € Rz À@ WXV € R“ Ã@ WYW € R˜ Ä@ WYX € R Ã@ W][V € R— Ä@ X[^ € Rš Ä@ X^ € R– Ä@ X^VV € R” Ã@ X^][ € Rj ¡@ YVVV € R• Ä @ Y[V € Ro ¢@ [X[ € Rm ¢@ [vo € R’ Ã@ \XX[V € R Ã@ ]VV € RŠ Â@ ^^]Z € Ri ¡@ ^^][ € Rr ¢@ ^^]\ € R{ À@ ^^]] € Rx À@ ^^]^ € R} Á @ ^^]_ € R Á@ ^^^V € R~ Á@ ^^^W € R Á@ ^^^X € R‹ Â@ ^^^Y € R‘ ÃÀ W € R« ÆÀ W]YX € R² ÇÀ XV^^ Y € RÀ ÈÀ X__ € RŸ ÅÀ YX\ € Rª ÆÀ YX] € Rž Å À Y\Y^ Y € R ÉÀ Y]\^ Y € RÁ É À Y^X^ Y € R¾ ÈÀ ]Y[^ Y € R¿ ÈÀ ^^^Z € Rœ ÄÀ ^^^[ € R¤ ÅÀ ^^^\ € R¦ Æ À ^^^] € R¨ ÆÀ ^^^^ € R± ÇÀ ^^^_ € R³ ÇÀ ^^_V € R´ ÇÀ ^^_W € RÊ ÊÀ _ [~ € R° ÇÀ _Z]VW _Z][V € RÉ Ê À _Z^VW _Z^[V € RÌ ÊÀ _Z^[W _Z_VV € RÈ ÉÀ _Z_VW _Z_[V € RÇ É€ R Áÿÿÿÿÿÿ HŠ JŠ € € @ @ @ @ @ @ € € € ÀáôÀ _Z_[W _[VVV € RÆ ÉôÀ _[VVW _[V[V € RÅ ÉôÀ _[V[W _[WVV € RÄ ÉôÀ {ZVW[ € R® ÆôÀ {ZVW[` € R¯ Ç ôÀ {[\_X € Rà Éôà WV[ € RÒ Ëôà WV[_VV € RÑ Ë ôà WW[V^ Y € Ré Íôà WZVVV € RÔ Ëôà W\VV € Rð Îôà W]W^^ Y € Rê Íôà W][V € RÛ Ìôà W^ZX^ Y € Rì Íôà XVVYYV € Rñ Îôà XW_^ Y € Rë Íôà XYV € Rß Ìôà YV € Rî Îôà YVVVV € Rï Îôà Y^VV € RÓ Ëôà Z\\Z]V € RÕ Ëôà ^^_X € R× Ëôà ^^_Y € RÝ Ìôà ^^_Z € RÞ Ìôà ^^_[ € Râ Ìôà ^^_\ € Rä Í õ WV € S Ðõ WYVZ_ \ € S Ó õ W[X]^ Y € S Òõ W^V € S Òõ Y__ € S Òõ ZZY € S Òõ [YV € S Òõ []V_ € S Ðõ \VW^ Y € S Óõ \m € Rû Ïõ ]X] _ V\ € Rý Ïõ ]\` € Rü Ïõ ^^_] € Rö Ï õ ^^_^ € Rú Ïõ ^^__ € Rþ Ïõ ^_VW € S Ðõ ^_VW~ € S Ñ õ ^_VX € S Óõ ^_VY € S Óõ _[WVX _[W[V € S Óõ _]XVVV| € S Ñõ _]XVVV} € S Ñõ _]XVVV~ € Rù Ïõ W € S* Õõ WVX^ _ \ VV € SO Ùõ WW[V € S5 Öõ WW[V_ \ € S: Öõ W[ € S# Ôõ W]\W_ \ € S9 Öõ XW_ € S) Õ õ YV € S$ Ôõ YVVVV € SH Øõ ZVV € S? ×õ ZVVVVVV € SJ Øõ [VY € S< ×õ ^ € S% Ôõ ^_VZ € S" Ôõ ^_V[ € S' Ôõ ^_V\ € S- Õõ ^_V] € SB ×õ ^_V^ € SM Ùõ ^_W_V € SK Ù õ _XV € SI Øõ _]X\V € S& Ôõ _^XVVV} € SA ×õ _^XVVV~ € S@ ×õ€ W € S^ Ûõ€ WX]W _ V\ € Sx Þõ€ WY[V € S… ßõ€ W]Y_ _ V\ € Sk Üõ€ W]Y_` € Sl Üõ€ W]]Y _ V\ € Sw Þ õ€ W^ZZ _ \ VV € S[ Úõ€ W^ZZ _ \ VVa € S\ ÚMEAÿ!ÿýÿÿÿ IŠ KŠ @ @ € € € @ @ @ € € € € € @ € @ € @ € € @ € € Àáõ€ X € Sb Û€ XVV € Sz Þ€ XXV € S† ߀ XX[ € S€ ß € YV[ € S| Þ€ YW[ € Sg Ü€ Y[_ € S~ Þ€ ZZX[\V € Sƒ ߀ \V € S ߀ ]ZXV € Sm Ü€ ]\ € S‚ ߀ ^\V € Sy Þ€ ^_V_ € SS Ù€ ^_WV € SV Ú€ ^_WW € SZ Ú€ ^_WX € S] Û € ^_WY € Sa Û€ ^_WZ € Sc Û€ ^_W[ € Sd Û€ ^_W\ € Se Ü € ^_W] € Sn Ý € ^_W^ € Sq Ý€ ^_W_ € St Ý€ _WWXVVV~ € SY Ú€ _W\ _ V\ € S_ Û€ {ZVWZ € SR Ù W € SÅ æ WVV]XV € SÛ é WVXZ _ \ € SÀ æ WW € Sï ë WZ[V _ V\ € SÏ ç W` € SÇ æ X € SÓ è XXZV € SØ è X[X _ \ € S¹ å X[^][ € SÕ è X[o € Sã ê X^ € SÚ é Y € Sá é YVVVV € SÙ é YZXV € S¯ ä ZZ_ € S¿ æ Z[ € SÖ è [X[ € SŽ à [X]ZV € S² ä []\ € Sº å \VV € 790 1-24-97 Commission Opinions, Orders and Notices 62,547 FERC Reports Policy Act, we a~ford Suffolk the opportunity to provide greater specificity concerning the I[ 61,355 ¡ £ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ € @ € @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ € j Àâ2 YWVV € áT F YWVW € áU F YWVX € áW F YWVY € áZ G YWVZ € á[ G YWV[ € á] G YWV\ € á_ G YWV] € ád H YWV^ € ág H YWV_ € áe H YWWV € áh H YWWW € ái H YWWX € áj I YWWY € ál I YWWZ € áp I YWW[ € áq I YWW\ € ás J YWW] € ár J YWW^ € áu J YWW_ € áx J YWXV € áz K YWXW € á{ K YWXX € á~ K YWXY € á| K YWXZ € á K YWX[ € á K YWX\ € á‚ L YWX] € რL YWX^ € á… L YWX_ € ᇠL YWYW YWYV YWYX € á M YWYY € ጠM YWYZ € á‹ M YWY[ € á“ N YWY\ € á– N YWY] € á› O YWY^ € áš O YWY_ € ᜠO YWZV € ᨠP YWZW € ᣠP YWZ\ € ᬠQ YWZ] € á Q YZ[ € ภ3 YZ] € ào + Z]Y WX VZ € á( A Z^^ € àn *@ VWY € áÔ U@ W _ VX` € ⤠n @ W _ VXa € ⥠n@ WX € â- `@ WXW € áÒ U@ WXY € áÚ V@ WX[ € â \@ WZ] € áì X@ WZ^ € â) _@ WZ_ € â* _@ W[^ € â m@ W[_ € áÿ [ @ W][ € â} i@ X[o € âM c@ YVV € â( _@ YWZX € ᤠP@ YWZY € ᦠP@ YWZZ € á³ R @ YWZ[ € á² Q@ YWZ^ € á® Q@ YWZ_ € á· R@ YW[V € ᶠR@ YW[W € á¹ R@ YW[X € á» S @ YW[Y € á¾ S@ YW[Z € á½ S@ YW[[ € áÀ S@ YW[\ € áÁ S@ YW[] € á S@ YW[^ € áà T @ YW[_ € áÄ T@ YW\V € áÆ T@ YW\W € áÇ T@ YW\X € áÈ T@ YW\Y € áÉ T@ YW\Z € áÊ T@ YW\[ € áË T@ YW\\ € áÌ U @ YW\] € áÍ U@ YW\^ € áÎ U@ YW\_ € áÑ U@ YW]V € áÓ U@ YW]W € áØ Vÿ ¢ ¤ € € @ € @ € @ € @ € @ € @ € @ € @ € @ @ € @ € @ € @ € @ € @ € @ € @ € j Àâ2@ YW]X € áÙ VW]Y € áÝ W W]Z € áÞ WW][ € áâ WW][` € áã WW]\ € áå WW]] € áç XW]^ € áê XW]_ € áë XW^V € áí XW^W € áî Y W^X € áï YW^Y € áð YW^Z € áó YW^[ € áö Z W^\ € áú ZW^] € â [W^^ € â [W^_ € â \W_V € â ]W_W € â ^ W_X € â ^W_Y € â ^W_Z € â ^W_[ € â0 `W_\ € â1 `W_] € â5 aW_^ € â8 aW__ € â; 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*@ WVZY WVZZ € Ç 8*@ WWXXWW X € ÇG >*@ WW]\WW X € Ç4 < *@ WW^WWW X € ÇM >*@ WXWWWW X € ÇD =*@ WX\VWW X € ÇJ >*@ WZW^ WW VX € Ç! 9*@ WZX[WW X € Ç? =*@ W[VXWW X € ÇI >*@ W[V^WW VX € Ç% :*@ W]VWWW X € ÇF > *@ W]WVWW X € ÇH >*@ W]WXWW X € Ç2 ;*@ W]^YWW VX € Ç/ ;*@ W]^YWW VX` € Ç0 ;*@ W^W^WW X € Ç< <*@ W^ZZWW VX € Ç 7*@ W^ZZWW X` € Ç 7*@ W^Z^WW X € ÇE =*@ W^Z_WW VX € Ç& :*@ XWXWW X € Ç3 ;*@ XW^WW VX € Ç* :*@ XW_WW X € Ç- ;*@ XZY WW VX € Ç. ;*@ X^WWW X € ÇC =*@ YVYWW X € Ç: <*@ YW^WW X € Ç7 <*@ YXX WW VX € Ç1 ;*@ Y\_WW X € ÿ o q € € @ @ @ @ @ @ @ € j Àâ*@ Z VV € Ç 7@ ZWV WW VX € Ç' :@ ZWWWW X € ÇB =@ ZX^ € Ç 9@ ZZZWW X € Ç, ;@ [VVWW X € Ç6 <@ [Y[WW X € Ç> =@ [\XVVW € Ç 7@ \VVWW X € Ç 8@ \^ € Ç 9@ ]VXWW X € Ç= = @ ]V] WV VY € Ç) :@ ^V € Ç 9@ ^ZVWV Y € Ç8 <@ ^ZVWV Y` € Ç9 <@ ^ZWWV Y € Ç 7@ _W\ WW VX € Ç" 9@ _X]WW X € ÇN >@ _X_WW X € Ç@ =@ _YW] € Ç 8@ _\YWW X € ÇK >@ _\ZWW X € Ç5 <@ {ZWY] € Ç 8` WVVXWW VX € Çz D` WV^WW VX € Ç| D` WW V] VW` € Çl B` WW V] VWa € Çm B` WW V] VWb € Çn B` WW X VW` € ÇX @ ` WW X VWa € ÇY @` WW X VWb € ÇZ @` WW Y VW` € Ç[ @` WW Y VWa € Ç\ @` WW Y VWb € Ç] @` WW Y VWd € Ç^ @` WW Z VW` € Ç_ @` WW Z VWa € Ç` A ` WW Z VWb € Ça A` WW [ VW € Çb A` WW [ VW` € Çc A` WW [ VWa € Çd A` WW [ VWb € Çe A` WXXXWW VX € Çx C` WZV^WW VX € Ç~ D` W[]WW VX € Ç} D` W]Z_WW VX € Çw C` W^XXWW VX € Çq C` XV\WW VX € Çs C` X^ ][ € Çf A` YVWWW VW € Çp C ` YW[WW VX € Çr C` ZVVWW VX € Ço B` ZW\WW VX € Çy D ` [V[WW VX € Ç{ D` \WYWW VX € Çt C` \XX WW VX € ÇT ?` \XX WW VX` € ÇU ?` ]W_WW VX € Çu C` _YW^ € ÇO ? ` _YW_ € ÇQ ?` _YXV € Çj B` _YXW € Çk B` _\\WW VX € Çv C€ Z\] € ÇŒ F€ Z\^WW VX € Ç E € _]_WW VX € Ç‚ E[ VWb € Çe A€ j Àâ*` WXXXWW VX € Çx C€ j Àâ*` WZV^WW VX € Ç~ D€ j Àâ*` W[]WW VX € Ç} D€ j Àâ*` W]Z_WW VX € Çw C€ j Àâ*` W^XXWW VX € Çq C€ j Àâ*` XV\WW VX € Çs Cÿÿÿÿÿÿÿÿ• p r € € @ € € @ @ € € € € € @ @ @ € € j Àâ+ W € ÇÕ NWVX\ WW VX € Ç· KWVZ[ € Ç« JWVZ[ WV VX € ÇÞ OWV[ WW VX € Çà LWW ^` € Çœ HWW ^a € Ç HWW ^b € Çž HWWV] WW VX € ÇÔ NWWW WW VX € Ç© IWWWYXVVW` € Ç— GWWWYXVVWa € Ç° JWWWYXVVWb € DZ JWWWYXVVWd € Dz JWWW[ WW VX s u € @ @ @ @ € € € @ @ € @ @ @ € € € € € € j Àâ, W € Ȫ n X € È n W € ÈÁ p WVY[ WW VX € Èà t WVZ^ Z_ [V € Èí u WV] WW VX € ȼ p WW XV WW X[` € Èî u WW XV WW X[a € Èï v WW XV WW X[b € Èð v WW XV WW X[d € Èñ v WW XV WW X[f € Èó v WWV[ WW VX € Èß t WWW\ WW VX € ÈÝ t WWW\ WW X € ÈÞ t WWW^ WW VX € È» p WW[W WW VX € Èö v WXY[ WW VX € Ⱦ p WX_\][ € Èì u WZWW WW VX € Èõ v W[W[ WW VX € È× s W]XX WW X` € ÈÏ r W]XX WW Xa € ÈÐ r W][V € Èý w W][X WW VX € È÷ v X € È p XWW WW VX € ÈÜ s XWWW WW VX € Èø w XWWW WW X € Èù w XZ_ € ÈÇ q X]Y € Èå t Y € Èà q YY[ WW X` € ÈË r YY[ WW Xa € ÈÌ r YY^] € Èé u Y\Y WW VX € Ⱥ p Y^V WW VX € ÈØ s Z ^V € Èè u \ € ÈÊ q \WW WW VX € Èò v ]XV WW VX € ȸ o ^Z^ _ V\ € ÈÙ s ^Z^ _ \ € ÈÚ s _V[ WW X € ÈÖ s _V[ WW VX € ÈÕ s _V^WW VX € ȹ o _YY^ € ÈÆ q _YY_ € ÈÈ q _YZV € ÈÛ s _YZ] € Èá t _ZV WW VX € Ƚ p _[\ WW VX € Èô vÀ WV] € É zÀ WWZW WW VX € É yÀ WWZW WW Z € É yÀ W]Y_ WW VX € É y À W^WX WW VX € Èÿ wÀ XWYV WW VX € É z À XWY^ WW VX € É yÀ X[W WW VX € É yÀ X][ WW VX € É xÀ YWZ WW VX € É yÀ YWZ WW X € É yÀ ZV^ WW VX € É yÀ [V[ WW XV € É wÀ \VZ WW VX € É yÀ _YV WW VX € É xÀ _YZ^ € É xÀ {ZWZW € É zÀ {ZWZW` € É zà W € É+ |à WVV\ WW VX € É2 }à WVV_ WW VX € É4 V à WVXW WW X € É( |à WV[V € É {à WVv € É& |okjggRPNEA!ÿýÿÿÿ t v € @ € @ @ € @ @ @ @ @ € @ € € @ € @ € @ € j Àâ,à WW X\` € É {,à WW X\a € É {,à WW X\b € É {,à WW[V € É" {,à WW[VVV € É' |,à WZV[ WW VX € É8 V,à WZY_ WW VX € É6 V,à XVojpj € É% |,à YZ^ € É) |,à Y[W WV VY € É5 V,à ZWZX € É- } ,à ZWZX` € É. },à [X[V € É3 U,à \_V € É! {,à ]VV € É/ },à ]ZV WW VX € É9 V,à ]ZV WW X € É: V,à _X\ WW VX € É7 V- W € ÉC W- WW X]` € É> W- WW X]a € É? W- WW X]b € É@ W- WWWZWW X € ÉB W- W^V € É= W - X[X WW VX € ÉE W- YYV WW VX € É< V- ZYW € ÉG Y- ZY^ € ÉA W- Zo € ÉL Y- ]Y[ WW VX € ÉD W- ]] € ÉF Y - WW X^` € ÉS Z- WW X^a € ÉT Z- WW X^b € ÉU Z- WW X^d € ÉV Z- WW X_` € Éf \- WW X_a € Ég \- WW X_b € Éh \- WW X_d € Éi ] - WW[ € É[ [- WXV] WW VX € Ér }- XWW_ WW VX € ÉR Z- Y[Z € É^ [- Y]] € Éj ]- ZWZY € Él ]- ZWZY` € Ém ]- Z]_ € Ée \- _YZW € ÉZ [- _YZX € Ék ]- _[_ WW VX € Ép ]- _[_ WW X € Éq }- `Y[ € ÉN Z -€ VVVX € Éy ~-€ VVVY € É{ ~-€ VVVZ € Év ~-€ VVV[ € É| ~-€ VVV\ € É~ -€ VVV] € Éw ~-€ VVV^ € Éx ~-€ VVV_ € Éz ~-€ VVWV € É€ -€ VVWW € É‚ 62,552 Cited as"77 FERC ¶ .... " 7eo 1-24-e7 seeks; LILCO counters that it would. Signifi- cantly, the New York Commission suggests that the Commission should order an engineer- lng study to analyze the ~otential effects on the systems. Sl~.-'cificaHy, Suffolk states (at 16) that elec- tric power can be supplied to Long Island cus- tomers in two ways: (1) from generation sources located on LILCO's system on Long Island, with the power distributed to customers over L1LCO's system; or (2) from generation sources located outside of LILCO's system, ei- ther off of Long Island or on Long Island, with the power delivered into LILCO% system at Suffolk explains that LILCO has provided reli- able transmission of NYPA-supplied power to Suffolk customers in the past and contends that there is no reason why LILCO's transmis- sion of non-NYPA power to Suffolk customers should further degrade the reliability of LILCO's system. reasonably impair the continued reliability of electric systems affected by this order. In de- unreasonable impairment of reliability. To this end. we direct the parties to perform any engi- sonable impairment of reliability. ¶ 61,355 proposed transmission order are able to agree. the Commission will issue an order reflecting the agreed-upon terms and conditions, if the Commission approves of them. If the parties to the proposed transmission order are unable to agree within the allotted time. the Commission will prescribe the rates, terms, and conditions of Service. In accordance with these procedures, the Commission will provide Suffolk and LILCO aS days to negotiate rates, terms, and conditions for carrying out the Commission's order, in- cluding the componsation for and apportion- ment of costs, in accordance with section 212(c)(1) of the FPA. If the parties are unable to agree within the allotted time, on the 4Sth day ~fter the issuance of this order, LILCO should make a final offer as to the prol~a.~ed transmission agreement reflecting all issues upon which the parties have agreed and giving the rationale for its final ~osition on the issues upon which the parties have not agreed, On the $$th day after the issuance of this order. LILCO should provide Suffolk with a prelimi- nary brief setting forth its arguments on the issues still in dispute, and on the 65th day. Suffolk should provide LILCO its response. On the 70th day, if matters are still in dispute, the parties should file final briefs with the Com- mission. Both final briefs would u~, ~ the starting point. LILCO's finM offer, and should be organized issue-by-issue in the same order as the preliminary brief provided by LILCO to Suffolk. Each brief should be accompanied by the Commission to establish final rates pursu- ant to section 212 of the EPA. or at a mini- decision, Pursuant to section 212(cX1) of the FPA, this proposed order shall not be reviewable in this order are preliminary, In addition, consis- tent with 18 C.F.R. § 38.5.71:3 (1996), this is an rehem'ing. The proper time for parties to seek rehem'ing is after the Commission issues a final order under section 2 ! 1 of the FPA. In~ Paragraph (A) above, as discussed in the body oi this proposed order. Federal Energy Guidelines GREGORY F. YAKABOSKI TOWN ATTORNEY JEAN W. COCHRAN Supervisor Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Telephone (516) 765-1889 Fax (516) 765-1823 OFFICE OF THE TOWN ATTORNEY TOWN OF SOUTHOLD TO: FROM: RE: DATE: MEMORANDUM SUPERVISOR TOWN BOARD GREGORY F. YAKABOSKI SOUTHOLD ELECTRIC UTILITY AGENCY March 2, 1999 At the last meeting I recommended that the Board retain special counsel with respect to the issue of an electric utility agency. I have spoken with three law firms and the fees are quoted below. In speaking with these attorney's I stated that the goal of the Town was to provide Iow cost energy to the residential and commercial users within the Town. The information that I requested was the following: a brief overview of Federal and State law prior to the 1992 Federal Energy Policy Act; a review of the Energy Policy Act; what is the current state of the law; and what options are available to the Town. Attorney's Suffolk County Electric Agency's Washington Counsel- (Christine Ryan, Esq. and Jay Brue of Brickfield, Burchette, Ritts, P.C. (202)- 342-0800 Fee: $200.00 per hour plus expenses [$2,700.00 - $3,000.00 total] Jay Brue would travel to Southold and spend the day briefing the Town Board and answering questions. 2) Washington Law Firm- Verner, Lipfert, Bernhard, McPherson & Hand (202-371-6000) Fee: $5,000.00 flat fee - for this they would provide an extensive brief and a conference call with the Town Board to answer any questions. 3) Albany Law Firm- John Dax of Cohen, Dax et. al. (518- 432-1002) Fee: $175.00 per hour plus travel expenses - for this John would travel to Southold, brief the Town Board and answer questions. 03/01/99 15:32 '~'202 342 0807 BRtCIGWlELD, BURCHETTE & R1TTS, P.C. 1025 Thomas Jefferson S~-eet, N.W. Eighth Floor, West Tower Washington, D.C. 20007 (202) 342-0800 TELEFAX COVER PLEASE DELIVER THE FOLLOWING ~ PAGES (including cover sheet) TO: C-rog Yakaboski FAX: $16-765-1823 PHONE: 516-765-1889 FROM: ~rames Brew DATE: March 1, 1999 SENDER'S TI~L~COPY NUNIBER: (202) 342-0807 Message: As requested. Original will not follow ( ) Original will follow via: U.S. Mail 0 Federal ExpreJs ( ) Certified Mail ( ) Other Operators initials (I) 03/01/99 15:32 "~202 342 0807 ~.B. ~ ~., Y.c. BRICKFIELD, BURCHETTE & RITTS, P.C. General Over~ew Brickficld, Burchctte & Pitts, P.C., serves ~ co,m~.lor and advocate for a variety of clients engaged in diverse entc,l,~scs, including major manufacturers, national associations, municipahties, power authorities including the Suffolk County Electrical Agency, waterArrigation districts and rural electric cooperatives. The ~-m has devclopad, over thc course of more than half a century, from a small .n~_ml resources practice to a ffu'm of more than twenty lawyers with a broad and sophisticated regulatory, complex lit/gation and administrative law practice with a principal emphasis on energy and public u~li~y matters. The Finn's industrial municipal and rural electric coopcralive clients primarily arc large energy purchasers. BrickfieM. Burchette 8~ KiUs has established a reputation for sicil]fifl, creative and a~gressive advocacy of its clients interests in obtaining · conomically priced cncr~y resources. The Firm rcpr-,.sents these entities in vazious male-rs before the Federal Energy Regulatory Commi-~iOn (i~ERC), incl~dln~ FERC's open access Uanmfission-rclalcd dockets. The Firm secured two of thc earliest FERC ord~s requiring utilities to provide transmission ~rvicea under new authorily gr'antcd to FERC by ~he Energy Policy Act of 1992. h is actively representing several clients in Independent System Operator {ISO) and utility merger matters. Thc Firm also hz, represented its cUents before nearly thirty state regulatory commi$sioILS a/id lcgislaturcs in a wide variety of ~-aditional rate proc__~!~l___i~s, customer specific negotiated power supply matters, and state r~g proposals. In addition to complex administrative and court litigation, thc firm advises a~d rcprescnLs its cheats regardillg m~y business and ~ansactio.al issues. The firm's attorneys have experience in many different substantivc areas of the law including energy, industrial incentives, buildil:lg industry issue.s, llatural resources, water rights, patent, trademark ar, ri hl~llectual properS, entim~t and trad~ l~flatioIL bankruptcy, commtmications, environmental, local §ovcmme, at, legislative, land use, Indian law, public la~ds, health-care and in~aitonal trade. 03/01/99 15:33 ~'202 342 0807 B.B. & R., Y.C. ~uuo~uu~ JAdVIES W. BREW, Esq. Brickfield, Burchette & Ritis W3shington, DC Mr. Brew is a shareholder in the Washington, DC tirol of Briclcfield, Burchecte & Ri~s. He represents the finn's industrial; rural electric cooperative and municipal cl~i~ic clients in electric restructuring matters and Federal !Energy l~cgulatory Corm~ssion (FERC) proceedings, including those relating to FERC's open access ~ransmission orders (Nos. 888 and 889), independent system operators and market power abnscs. He has negotiated cus~mer specific power rates for large industrial energy users, economic incentives and other matters rclaling to the siting of nc(v m~-ufaciuring facilities, and has represented large cnstomcrs in stat~ energy related regnl~to~ry proceedings. Hc also represents investor groups in divestiture and generation ass~ sales m~ters. From 1979 to April 1995, Mr. Brew sowed as a staff attorney with the New York Stale Public Service Commission. For several years prior to his departure, he was the agency's Managing Attorney for Energy Policy and Federal Affairs. He also l:uui ove,~ight or lead counsel responsibility for New York Public Sen, ice Commission proceedings and activities coveting reslructurin~ and competition in ~ electric industry, retail wheeling, power pooling, capacity bidding, transmission se~ices, resource planning, and energy efficiency programs. Previously, as a s~ff ~rrarncy he was responsible for the agency's investigations into tim cost of the $hor~hsm and Nine Mile Point Unit 2 nuclear power plants, Mr. Brew is a graduate of Georgetown Univ~sity and the Georgetown University Law Center. VERNER. LIIPFERT BERNHARD.McPHERSON HAND 901 - 15T~ STmmT, N.W. WnS:4mOTON, D.C. 20005-2301 (202) 371-6000 Fnx: (202) 371-6279 FebruaD, 25,1999 Writer's Dircct Dial: 202-371-6044 Mr. Gregory Yakabovsky, Town Attorney Town of Southold Town Hall 53095 Main Road P.O. Box 1179 Southold, New York 11971 Dear Mr. Yakabovsky: I enjoyed talking with you today and was quite impressed with your grasp of the complex area of law dealing with formation of municipal electric utilities. I am enclosing, for your information, the following documents relating to our Firm's general expertise and specific experience in issues regarding formation of municipal electric utilities: A Verner, Liipfert Firm brochure. A brochure describing our energy and environmental practice. A recent Fortune 500 article regarding our Firm. An article on iYanchise competition which Clint and I coauthored. A speech I gave to the American Public Power Association legal seminar regarding strategies for tbrmation of municipal electric utilities. Please let Clint or I know if you have any further questions. JCF/pso enclosures · WASHINGTON, DC · HOUSTON · AUSTIN · HONOLULU · LAS VEGAS · McLEAN · MIAMI Sincerely, J. Cathy Fogel IOVVN ATTORNEY TOWN OF $OU~'~-; 03/01/99 M0N 16:38 FAX 516 432 1028 Cohen, Dax & Koenig, EC. FACSIMFr,~. CO3~_R snF, F.T CONFIDENTIAL - PRIVILEGED If rccckved by odin* r,~n/nr~m/~d pan~ Please d~oy end conu~ the sender (collec~ =ha~c~ accelxed) DATE-. TO: FAX NO.: FROM: N-t.FMBER OF PAGE~ (including cover sheet) MESSAGE: If there is any problem with this facsimile, please contsct us st (SIS) 432-1002. Facsimile sent by:~ Jeff~y C. Cohen John W. Dax .To~hua No~h Kmmig Cohen, Dax & Koenig,' P.C. ATTOR.R ~,Y~, 90 State S~t. Suite 1030 Albany, N~w Ycdc 12207 T~ (518) 4324oo2 Fa~tmila: (-518) 432-1028 P~I C. Rspp KJntloedy A. Johnson March 1,1999 Gregory F. Ynl~,howski, Esq. Town of Sout~old P. O. Box 1179 Southol~, New York 11971 Dear Mr. Yakabowski: As we discussed, I would be happy to assist the Board of the Town of Southold in understauding the possible advantages and disadvantages ofmunicipalizing the Town's electric system in today's anvironment. I wa~ a~fively involved in the work my firm did in this ar~a for the City of Cortland and also provided assirrance lo my paztner in similar work for the City of Ogdensburg. I have also advised several large indushial clients on the benefits of w-nlcipalizaiion by their host commulliti~. I am familiar with relevant federal and state siatutes, regulations and decisional law. Thwugh work I hav~ recently been doing for a large commercial clecM¢ity customer in Long Island, I am up-to4s~e on Lon~ Island Power Authority matters as well. A copy of my f~n's resume is allach~d. { Enclosure 03/01/99 M0N 16:35 FAX $18 43Z IUZ~ ~o.m:~ ~a.~ ~ nu~,~ Cohen, Dax & Koenig, P.C. AI'ro~2~'YS Albany. New York 12207 Telgphonc: (518) ¢32-1002 Fa;~*m~l,'' (518) 432-102~ TIlE FIRM Cohen, Dax & Koen/g, P.C. provides a wide range of legal serviccs w pfivatc and public scc~ cliants with a special focus on the energy and ~elecommunicafions industries. The firm is routinely involved in civil litigation, contract negotiation, business and property acquisitions, regulatory compl/ance, environmental review and ~4~proval proc~ures, lender due diligence, labor n~s, intellectual property transactions, bankruptcy proceedings and public pelk~, development. The firm regularly counsels service providers, business s,~ facility own~s, dcvclol~rs, large consumers and lenders in the energy, tdecommunica~ions, mass media, environmental and utih'ty fields on regulatory, commercial and bankn.,ptcy slrategies. Thc firm appears befo~ federal, state and municipal government bodies with responsibility for energy and telccommunicalions regulation and environmental protcction, and before land usc and zoning agencies. The firm appcars in Ncw York State and federal trial and appelh~e courts. The finn also assiscs/n developing and implementing govcnun~ relations and lobbying s~Icgies at thc statc and local levels. 03/01/99 MON 16:30 FAX $18 432 lOZ~ <utu~ ~.~. Jef~reyC. Cohen EDUCATION: BAR ADMISSION: PREVIOUS EXPERIENCE: John W. Dax EDUCATION: BAR ADMISSION: PARTNERS Yalo Law School, 1969 Brand~is Univ~'sity, B.A. 1966, manna cum la~e. Phi Beta Kappa Now York Sta~; adm/tt~d to U.S. Dish'/ct Courts, Southern District and Northern Distr/ct of New York, and Second Circuit Court of Appeals. Deputy Commissioner, New York Stat~ Energy St~ial Counsel, Air P,~our~s, New York State Department of Enviroumeatal Conscrvalion Associa~, Proskauer Rose Goeiz & Mendelsohn, New York, New York Columbia University School of Law, 1977 New York Univ~'sity, B.A. 1976, cum iaudc New York Sta~e; admitied to U.S. Disirict Cour~ Northern District of New York. PREVIOUS EXPERIENCE: Panner, LcBoeuf; Lamb, L~iby & MacRae; resident partner in Albany, New York branch office Asso~iaI~, Le, Bo~/; Lamb, l.~y & Ma~Ra~; r~sid~nt =_~om~y in Albany, New York branch office Assistant Counsel to th~ Governor of the Stat~ of New York Staff Counsel, New York State Public Sciwice Commission 2 03/01/99 Joshnn Noah Koenlg EDUCATION: Albany Law School, 1973 Comell Univer~ty, B.S. 1970 BAK ADMISSION: New York Stste; admitted to U.S. District Courts, Eastern District and Nonhero Dis~ct of N~v York, D.C, Circuit Cour~ of Appeah and United S~atcs Supreme CourL PKEVIOUS EXPERIENCE: Vice President and Counsel, Cable Television Association of New York, Inc. Special lh'ojccts Director, National Public Radio, W~shington, D.C. ~ Coun~l, New York Slate Commission on Cable Tel~-vision General Auomey, Cable Television Bureau Federal CommHl~.~I/on~ Commission W~h/ngton, D.C. ASSOCIATES Paul C. Rapp EDUCATION: Albany Law School, 1988 Sine University of N~v York, at Albany, B.A. 1977 BAK ADMISSION: New York $~le; admitted to U.S. Dislrict Courts, Northern, Fa.stem and Southern Districts of Now York, and Second Circuit of Court of Appeals. PREVIOUS EXPERIENCE: Aisociate, Whitem~m, Ostermnn & Haon-~ Albany, New York Law Cl~rk, Hon COn. O. Cholakis, U.S. District Court for the Northern District of New York 02/01/99 ~0~ 16:29 F~ 518 422 lOZ~ ~uu.~ u.s.~. ~ =u=,~,~ .... Kimberly A. Johnson EDUCATION: Albany Law School, 1998 Siena College, B.A. 1995, cum laud¢ BAR ADMISSION: PREVIOUS EXPERIENCE: New York State. Committc~ Director, Economic Dcvelopment. Small Business and Commerce Committee, Deputy Majority Leader, Senator Jess J. Prcsant Legal Assistant, NYS Attoracy Ocncral's Office, Litigation Bureau 4 FROM I ALICE HUSSIE RE:RESOLUTION AUTHORIZING THE ESTABLISHMENT OF A PUBLIC LrTIL1TY AGENCY FEBRUARY 16,I999 THE PLAN Form an agency (company, utility,board) to: 1. a. ,Find sources of less expensive electdc power. b. Contract to purchase the power. c, Contract to lease distribution system. Sell power to eligible consumers at a price which a. Cost of the power. b. Cost of Any administraMve expenses. c. Cost of T&D. d. No profit to the Agency. includes: 3. Cost to Southold taxpayers:SO. RESOLUTION FEBRUARY 2. 1999 AMENDED A RESOLUTION AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW WHEREAS,the Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the etectdc consumers in the Town of Southold and to pass on a cost saving to those consumers,and WHEREAS, pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law Law. Now, therefore, be it RESOLVED, on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas & Electric Agency, hereinafter called the "Agency". The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A ef the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the call of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency, .and be it further RESOLVED that ,(1), The Agency ,on behalf of the Town, of Southold is hereby authorized to enter into agreements to purchase all available power from~State, any State agency, any other municipal corporation or other public corporation or any other available source at such price, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. (2) The Agency is authorized, from lime to time as it may deem appropriate, to enter into agreements to lease or otherwise contract to use electric transmission systems of other utilities as is necessary to deliver such electric service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers.(3) The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town.,and(4), It is estimated that the rates as fixed by the Public Sen/ica Commission for the electric service to be furnished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operalion of this utility service will be at no net cost to the Agency. This Resolution shall not take effect unless and until approved by the majority of the electors VOting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Town of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This resolution shall in no way be construed as a limitation on the power of the Town of Southold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. § 13-1 ELECTRIC UTILITY BOAP~ § 13-2 Chapter 13 ELECTRIC UTILITY BOARD § 13-1. Board established. § 13-2. Qu~!ii%ations of members; purpose. § 13-3. Term of office. § 13-4. Attendance at meetings. § 13-5. Compensation. § 13-~. Removal of members. § 13-7. Chairman. § 13-8. Powers and duties. [HISTORY: Adopted by the Town Board. of the To~u of Massena 1-17-75 by resolution. Amendments noted whore ap- pUcahle.] memb~r~ of a.~d~q~o ~lm!,,In~r tt~ u~/Uty. ~x~t r~oh/t/on m approved by 1301 § 13-3 MASSENA CODE § 13-7 § 13-3. Term of office. The term of office of each member of said Board shall be five (5) years, and the term of one (1) such member shall expire ~nn,mlly; the first appointments, however, shall be made for the respective terms of five (5), four (4), three (3), two (2) and one (1) years. Appointments of successors sh~ll be for the full term of five (5) years, except that the appointment of a pereon to fill a vacancy occurring by death, resignation or cause Other than the expiration of a term shall be made for the unexpired tern-.. § 13-4. Attendance at meetings. Failure of any member to a~tend three (3) com~ecutive meetings of the Board shall cause a vacancy in hi~ office unless said absence i~ excused by formal action of the Utility Board. § 13-5. Compensation. The Utility Board members shall receive .no compensation for their"servicea but shall be allowed their actn.1 and necessary traveling and other expenses, to be audited by said Board and paid in the same m~u-er as other expenzes. § 13-6. Removal of members. Any Utility Board member rn.y be removed from office at any time by the appointing authority after having received notice in writing of the cause of the proposed removal and after an op- port-unity to be heard thereon. § 13-7. Chairman. The Supervisor of the Town of Massena shall designate an- nually one of said members as Chairman, 1302 § 13-8 ELECTRIC UTILITY BOARD § 13-8 § 13-8. Powers and duties· Said Utility Board shall have the following genera[ powers and duties: A. Elect from among its members annually a Vice President and a Secretary. It shall appoint a Superintendent of the utility, who shall not be a member of the Board and who shall hold office at the pleasure of said Board. B. Erect all necessary buildings, make all necsssary provements and repairs and alter any existing buildings for the use of said utility, provided that all expenditures for new bui]d~ugs or alterations, other than ordinary repairs, shall first be authorized by the governing board of the towb. C C. Fix the salary of the Superintendent and the n-tuber and salaries of all other employees, within the limits of the appropriation made therefor by the governing board, and such salaries, together with maintenance when provided, shall be compensation in full for all services rendered. D. Institute actions at law and in equity for the collection of clalrns and obligations due the utility from a.uy and all causes, and prosecute, compromi.~e or settle such and obligations, and retain co,;--~el to conduct such litigmtio~s. E. Ma~nt.~n an effective inspection of said utility and keep itself ~nformed of ~he affairs and management thereof. The · Board shall meet a~ least once m every month and at such other ~knes aa may be prescribed in the bylaws and shaI~ hold :ts annual meeting at lea~t three (3) weeks pmor to the meeting of the governing board at which appropriations for the ensuing year are to be considered. · F. Keep m a book provi.ded for that purpose a proper record of~ its proceedings, Which shall be open at all times to inspection of its members, of the members of the governing board and of duly authorized representatives of the state. G. Notwithstanding the provisions of any other general law and subject to such rules and regulations as the governing 1303 § 13-8 MASSENA CODE § 13-8 Ho board rosy prescribe, audit all bill.~ and accounts payable out of fund~ with;, its jurisdiction and order their payment by the fiscal officer of the town. By resolution of the govern;nE board the Utility Board may appoint a Treasurer, and noLwi~-hztanr~;-g the provisions of any other general law, the Treasurer shall pay the bills and accounts ordered paid by the Boexd and at le_~st once in each month shall trs-~mit to the governing board an itemized statement thereof, which statement shall also include all payments made by the Treazure~ for fixed salaries and wages. Make to the governing board of the town by which the utility lz mAi-rained, at such I:irne$ aS said board shall direct, a detailed ann,ml report of the operations of the utility as may be required of it. Such reports shall include full and detailed estimates of the appropriations required during the emro,lug year for all purposes, inclUdi.~ m~;uteusnce, erection of buildings, repairs, improvements and other necessary purposes.2 Editor'! Note: Or~ Section 18, which Imm~ly foUow~ ~ ~m ~ pve ~e ~m~ ~d ~ of ~e o~ U~ ~ mom~, ~ dele~ w~u ~ ~luflon w~ c~. 1304 ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-1823 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED AT A REGULAR MEETING OF THE SOUTHOLD TOWN BOARD HELD ON MARCH 2. 1999: WHEREAS, the Town of Southold desires to provide Southold residents and businesses with Iow cost power; WHEREAS, the Town has the right to seek opinions from the New York State Attorney General and the New York State Comptroller; WHEREAS, the Federal Energy Regulatory Commission is the Federal regulatory body with respect to energy; BE IT RESOLVED that the Town Board of the Town of Southold hereby directs the Supervisor to seek the New York State Comptroller's opinion as to whether, pursuant to GML section 360 (3), the Town can issue Town checks on behalf of the Southold Electric Utility Agency, even if the Town would be subsequently fully reimbursed, if the Town Board resolution forming such a Utility Agency states that the "maximum and estimated costs" is zero ($0.00); BE IT FURTHER RESOLVED that the Town Board of the Town of Southold hereby directs the Supervisor to seek an opinion from the New York State Attorney General as to the rights and powers of a Municipal Electric Utility Agency formed pursuant to Article 14-A of the General Municipal Law given the fact that the Long Island Power Authority has been created; BE IT FURTHER RESOLVED that the Town Board of the Town of Southold hereby directs the Supervisor to submit the proposed plan of the Southoid Electric Utility Agency to the Federal Energy Regulatory Commission for an opinion as to whether the Town of Southold can "wheel in" Iow cost power to the Town residents and businesses pursuant to the 1992 Energy Policy Act. Southold Town Clerk March 2. 1999 Electric Hike For Villages' Utilities Rise of as much as 20 percent By Sid Cassese STAFF WRITER Freeport, Greenport and Rockville Cen- tre residents who saw a significant jump in their electric bills over the past few nlonths can expect more of the same, ac- cording to local utility chiefs. A line used to transfer hydroelectric power to the municipalities went down for about a month between late October and early November, forcing the villages' mu- nicipal utility companies to buy power from the Long Island Power Authority at a higher cost, The line was down again this week, this time for regular maintenance that may take as long as a month. The three village-run municipal utilities like to boast that their rates can be as much as 50 percent /ess than that of LIPA because they get their power from Niagara Falls through the New York State Power Authority. That power is transferred on a privately owned line owned jointly by I,IPA and Consolidated Edison. When that line went down last year, Free- port was fi~rced to buy power from LIPA, said Freeport utility chief Hub Bianco. "That added two cents per kilowatt lthat was passed on to our customers]," Bianco said, "and the average minimum use is about 1,200 kilowatts a month." Bianco said some customers' bills were 20 percent higher than usual. Bill Swiskey, head of utility operations in Greenport. said his company also bought power from LIPA after the line went down. "It averaged out to about one-and-a-half cents per kilowatt," he said. "We didn't know it was going to be out as long as it was. Time makes a difference in cost." James Heaney, a spokesman for Rock- ville Centre, said there had been problem in that village, too, but added that it cost the customers only about half a penny more per kilowatt. "We were able to get our hydro energy through another line that comes across the Long [sland Sound just like [the line that went down.1 But of course we had to pay a premium fbr that." Greenport also has been getting power over another line, but not Freeport. "We tried to get on the ]other] line, but the ]New York State] Power Authority told us there was no more space left on it," Bianco said. Bianco said the increase in price was spread over two months for customers, and that the most recent bill residents re- ceived was tbr the month of December. "Remember this is the season when many of our customers burned Christmas lights all through the night," he said. James Parola, who with his wife, Muriel, has lived in the village since 1953, said: "()ur last bill was about $30 more than the previous one, })ut o[' course we had Christmas lights. "Still," Parola said, "the bills we got in December and January was about $20 more than in November." ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTIC?q MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFF1CER Town Hail, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 7(55 1823 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHO LD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED AT A REGULAR MEETING OF THE SOUTHOLD TOWN BOARD HELD ON FEBRUARY 2, 1999: Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential commercial and municipal corporations; and Whereas there are no other involved agencies; Resolved that the Town Board of the Town of Southold hereby declares itself to be the LEAD AGENCY for the above referenced project pursuant to the rules and regulations of SEQRA set forth in 6 NYCRR 617 et. seq. Southold Town Clerk February 2. 1999 RE: Electric Agency- SEQRA ~3 -LEAF Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; and Whereas the Town Board has determined that this project is an UNLISTED ACTION; and Whereas the Town Board is the LEAD AGENCY; be it Resolved that the Town Board of the Town of Southold hereby adopts the Long Environmental Assessment Form, dated February 2, 1999. ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFI(;ER FREEDOM OF INFORMATION OFI~'ICER T( Fax (516) 765-1823 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED AT A REGULAR MEETING OF THE SOUTHOLD TOWN BOARD HELD ON FEBRUARY 2, 1999: Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; and Whereas there are no other involved agencies; Resolved that the Town Board of the Town of Southold hereby declares itself to be the LEAD AGENCY for the above referenced project pursuant to the rules and regulations of SEQRA set forth in 6 NYCRR 617 et. seq. Southold Town Clerk February 2, 1999 ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAl, STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765 1823 T,,lephone (516) 76,5-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED AT A REGULAR MEETING OF THE SOUTHOLD TOWN BOARD HELD ON FEBRUARY 2, 1999: Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; and Whereas there are no other involved agencies; Resolved that the Town Board of the Town of Southold hereby declares itself to be the LEAD AGENCY for the above referenced project pursuant to the rules and regulations of SEQRA set forth in 6 NYCRR 617 et. seq. /~Eflzabeth A~.'N~ Southold Town Clerk February 2. 1999 i- 617.21 SEQF Appendix A State Environmental Quality Review FULL ENVIRONMENTAL ASSESSMENT FORM Purpose: The full CAF is designed to help applicants and agencies determine, in an orderly manner, ;'vhether a prolec or action may be s~gndicant. The question pi whether an action may be ~lgndicant i$ not always easy to answer Frequent [y. there are aspects pi a project that are sublectlve or unmeasureable. It is also understood that those who determin~ significance may have little or no formal knowledge of the enwronment or may be technically expert in environmenta analysis In addition many who have knowledge moneparucutar area may not be aware of the broader concernsaffectm~ the question pi s~gndicance. The full E,*,F is intended to provide a method whereby applicants and agencies can be assured tha[ the de(erminatior process has been orderly, comprehensive in nature, ye[ flexible to allow introduction of mformauon to fit a prolect or action Fuji EAF Components: The full EAF is comprised of three parts: Part 1: Provides objective data and information about a given prolect and its site. 8y identifying basic prolec data. it assists a rewewer m the analysis that takes place in Parts 2 and 3. Part 2: Focuses on identifvin§ the range of possible impacts that may occur from a proiect or action. [t provide: gmdance as towhether an ~mpact ~s likely to be considered small to moderate or whether ~,s a potentially [arge tmpact. ]-he form also identi~ies whether an ~m0act can be m~rdgated or reduced. Part 3; If any imoact in Part 2 is identified as potentially-large, then Part 3 is used to evaluate whether or not th~ impact is actually important. L DETERMINATION OF SIGNIFICANCE--Type I and Unlisted Actions Identify Ihe Portions nj EAF completed Ior this proiect: {~ Part 1 ~, Part 2 {~Part 3 Upon revtew pi: the information recorded on this EAF(Parts 1 and 2 and ] if appropriate) and any other su4~0ortmg information, and considering both the mag~tude and ~mportance of each ,mpact, tt ~s reasonably determined b,,, (he lead agency that: A. The prolect w,I[ not result in any large and important impact(s) and. therefore, is one which wd[ not have a s~gndicant ~mpact on the enwronment, therefore a negative declaration wdl be prepared. [] t3. Although the proiect could have a s~gnificant effect on the environment, therewitl not be a significant effect for this Unlisted Action because the mmgaUon measures, described in PART 3 have been required, therefore a CONDITIONED negative declaration wdl be prepared.' C. The proiect may result in one or more large and important unpacts that may have a signiiicant ~mpact on the environment, therefore a positive declaration will be prepared. · A Conditioned Negative Declaration is onty valid tor Unlisted Actions PART 1--PRQJFCT INFORM£ ON Prepared by Project Sponsor NOTICE: This document is destgned to assist in determining whether the action proposed may have a s~gndicant effec on the environment. Please complete the entire form, Parts ,\ through E Answers to these questions will be consldere _a~ part o~ the applicauon rot approval and may be subject to iurther verihcauon and public rev,ew Provide any additiona information you believe will be needed to complete Parts ? and 3. It is expected that completion of the full EAF will be dependent on ~nformauon currendy available and ,,viii not invoivt new studies, research or ,nvesu§at~on Ii infarmauon requiring such ,~ddiuonal work ~s unavailable, so indicate and specif' each instance. NAME OF ACTION NAME OF APeLJCANTiSPONSOR BUSINESS TELC- PHONE Please Complete Each Question--indicate N.A. d not applicable A. Site Description Physical setung of overall project, both developed and undeveloped areas 1. Present land use: C]Urban ~lndustrial [3Forest ~Agriculture 2. Total acreage of prolect area: APPROXIMATE ACREAGE Meadow or grushland (Non-agricultural) Forested Agricuhural (includes orchards, cropland, pasture, crc) Wetland (Freshwater or tidal as per Article~ 24, 25 Unvegetated (Rock, earth or fill) Roads. buildino and other paved surfaces Other (Indicate 3 What ~s I)tedommant soil typu(A on pro~ect ~it~ ~,,~'i~ (~\Vell dr,nned [] Poorix dralnud PRESENTLY AFTER COMPLETION What ~s depth to bedrock? ~¢~ ?¢ ¢'¢ [in /eecJ or pro~,nsed prOleCt nte xv~ti~ slope~ ~l).lO°,,', % L5 lib 15°,% Register~ o~ Historic Places? ~Yes GNp ~ 8. ~Vhat is the depth o~ the water table~ ~ -~ (in 10. OD hunt:nD, fishing or shell fishing opportumdes presendv exist m the prolect area? ~es ~No 11. Does project site contain any species of plant or animal ]i~e thac is identified ~s threatened or endangered? According ~o Idenuty each species ~ ~ ~l~ ~ I~ 12. Are there any unique or unusual hand forms on the prolect site? (ie.. citifs, dunes, other geological ~ormat~ons) 13. Is the prolect site presently used by the commumt¥ or nmghborhood as an open space or recreauon area? RYes ~No If yes. explain 14 Does the present site include scenic views klgown tO be ~mportant to the community? (~¢Y e s ~No 15 Streams within or contiguous to project area: ~ a. Name of ~tream and name o~: River to which it is mburarv i6 Lakes. ponds, wedand areas within or conuguous to prolect area: a. Name ~/,- IN ~'~k~t/,~ b Size (In acres) 17. is the site served by existing public utilities? ~Yes ~No & a) If Yes does sufficient capaow exist to allow connection? ~Yes ~No ~ b} I[ Yes. will improvements be necessary to allow connection? ~Yes ~No 18 ts the s*te located m an aaricuitura] district certified pursuant to Agriculture and Marke~s Law, Article 2S-AA, Section 303 and 304? ~Yes ~No 19 Is the site located in or substanualiy contiguous ~o a CriPca[ Environmental Area designated pursuant to Ar[lcle S of the ECL, and 6 NYCRR 6177 ~es ~No 20. Has the site ever been used for die disposal oi solid or hazardous w,*s~?.~Yes ~No C 13. Project Description 1. Physical dimensions and scale of proiect (fill m dimensions as appropriate) a. Total contiguous acreage owned or controlh:d by prolect sponsor b Project acreage to be developed: . acres indi;dly; d Length of prolect, In redes. (H appr~;llrlate) 3 3. wdl disturbed area~ be reclaimed? b. Will topsoil be stockpiled for reclamation? []Yes ~No c. Will upper subsoil be stockpiled for reclamation? EYes ~m? ~,~ r'~ tone/cubic yards 4. How many acres of vegetation (trees. shrubs, ground covers) wdl be removed irom site? ~'[~' acres 5 will any mature forest (over 100 years old) or other locally-important vegetation be removed by this project? ~Yes ~No g~ 6 If single phase project: Anucipated period of construcuon ~ ~ months, (including demolition). 7 If multi-phased: I~(~ a, Total number of phases anticipated (numbed b Anticipated date of commencement phase 1 monm c. Approximate completion date of final phase month d. Is phase 1 functiona)iy dependent on subsequent phases? EYes ~NO 8 Will blasting occur during construction? ~Yes I~o 9 Number of jobs generated: durin~ construction ~ ~ ; a~:ter prolect ~s complete 10 Number of jobs eliminated by this oroiect ~ t[~ 11 Will proiect require relocation of any prolects or fatalities? EYes ~i~No [f yes. explain year. (including demolition). year 12 Is surface liquid waste disposal involved? t~Yes ~,No a. If yes. indicate type of waste (sewage, industrial, etc.} and amount b Name of water body into which eifluent wdl be discharged 13. Is subsurface liquid waste disposal involved? EYes ~o Type 14 Will surface area of an ex~sting water body ~ncrease or decrease by proposal? E~plain 15 Is prolect or any port,on of project located in a 100 ','ear ~lood pi.un? g~TYes 1F~ Will the prolect generate solid waste? ~Yes ~'No a. If yes, what is the amount per month tons b. If yes, wilt an ex~sting solid waste facility be used? ~Yes ~No c. It yes, give name ; location d. Will any wastes not go into a sewage disposal system or rolo a sanitary landfall? ~Ye~ e. If Yes, explain 17 Will the prolect involve the disposal of solid ~vaste? a. If yes. what is the anticipated rate o[ disposal? b. If yes, what is the anticipated site life? 18. Will project use herbicides or pesucides? EYes 19 Will prolect routinely produce odors (more than om, hour per day)? ~Yes ~Yes (- C City, Town, Vdlage Board [~["Yes ~No City. Town, Village Planning goard []Yes ~No City, Town Zoning Bo3rd []Yes [~No City, County Health Department []Yes ~No Other Locat Agencies ~Yes I~NO Other Regional Agencies C~Yes ~No State Agencies ryes C3No Federal Agencies []Yes []No C. Zoning and Planning Information 1 Does proposed action involve a planning or zoning decision? []Yes . If Yes, indicate decision required: []zoning amendment [zoning variance E]specia[ use permit [subdivision [site plan [new/rewsion or master plan [resource management plan []other 2. What is the zoning classification(s)of the site? 3. What is the maximum potential development of the site if developed as permitted by the present zoning? 4. What is the proposed zoning of the site? ~ lof 5 \Vhat is the maximum potential development o~ the site if develooed as permitted by the proposed zoning? 6 Is the proposed action consistent with the recommended uses in adopted IocaJ land use plans? [~es 7 What are the predominant land use(s) and zoning classificauons w~th*n a V, mile radius of proposed o'er-ion? 8 Is the proposed action compatible with adjoining/surrounding land uses within a t4 mile? J-~Ja[]Yes 9 I[ the proposed action ~s the subdivision of land. how many Jots are proposed? ~,]~f a. What is the minimum rot size proposed? 10. Will proposed action require any authorization(s) for the formation of"~ewer or water districts? L~Yes 11. Will the proposed action create a demand for any commumty provided services (recreation, education, polio fire protecuon)? [Yes a. If yes, is existing capacity sufficient to handle prolected demand? []Yes E}No 12. Will the proposed action result in the generation of traffic signiiicantly above presen[ levels? []Yes I~h. a. If yes, ~s the exisung road network adequate to handle the additional ua/tic? C]Yes ~2No D. Informational Details Part 2--~HOJEC1-iMPACTS AND lifiEt~ MAGNIiUDE General Information (Read Carefully) asks ~hat it be looked at furtffer * The impacts of eacff ~roiect, on each site. in each locality, wdl vary Therefore, the examples are illustra~ive am have been offered as ~uidance. The~ do not consntute an exhaustwe ~ist or ~mpacts and thresholds to answer each question . The number of examples per question does not indicate the importance of each question Instructions (Read carefully) a. Answer each of the 19 questions in PART 2. Answer Yes if there wiil be any ~mpact ~s lower than example, check column 1 IMPACT ON LAND Will the proposed acuon result in a physical change to tl~o prolect site? ~"bt 0 ~JYES E×amples [hat wou(d apply to column 2 Any construction on glopes foot of lengthL or where the general slopes m the proiect area exceed 10% Construction on land where the depth 3 feet. Construction of paved parking area for Construction on land where bedrock 3 feet of ex~s[in~ ~round surface Constructlon that wdl continue for mote than ExcavaUon for mmin~ purposes tons pi natural material tie., rock or sod) per year. Constructton or expansion of a samtary Construction m a designated floodway Othur impacts I 2 3 Small to ?olen[ial Can impact 9e Moderate LarGe Mitigated Sy Impact Impact Project Change ENo the site?ti u, clif(s dunu~ aeolo!:.:al u i pt ~, tc ){1~,~, ) L]'FES · Speo~lc land forms IMPACT ON WATER 3. Will proposed action a/feet any water body designated as protected? (Under Arucles 15, 24, 25 of the Environmental Conservation Law, ECL) _ ~NO ~YE5 E~amples that would apply to column 2 · Oevelopable area of site contains a protected water body, · Dredging more {han 100 cubic yards of material [rom channel of a protected stream, · Extension or utili[y dis[nbuUon [acilities through a protected water body · Construction in a designated [reshwa[er or ~idal wetland. · Other ~moacts: I I 2 -)mall ~o Poienlial Moderate Large Impact Impacl 3 Can Impact Bt Mitigaled By Project Chang, '(es [] No ~Yes ENc EYes C]Nc OYes l~No 4 Will proposed act[on affect any non-protected existing or new body of water? J~NO []]YES ~:~amples that ~vould apply to column ] · A 1096 increase or decrease in the-surface area of any body of water E or more than a 10 acre increase or decrease. · Construction of a body of water that exceeds 10 acres of surface area C~ · Other impacts: O 5~,Yes ,r~ Yes ENo Will Proposed Action affect surface or groundwater quality ar quanUty~ (~NO []."{ES Ex~mpies that would apply ~o column ~ Proposed Action will require a discharge permit Proposed Action requires use et a source o[ water tha~ does nor have approval to serve proposed (project) action Proposed Action requires water supply (rom wegs w(th greater Lh~[% 45 gallons per minu[e pumping capac][y CoflstrucNofl Or operaNon causing any COfltafT/lflatlOfl Of a wa[Qr suppJy ¢ysLem. Proposed Acnon will adversely affect groundwa[er. Liquid effluent will be convey~ .[ off the site to famlit(es which preseady do not exist or have inadequate capacity. Proposed AcNon would use water in excess o[ 20,000 ~ailons per day Proposed Action will tikelv cause siltation or other disct~arge rote an existm~ body of water to Lhe extent ~ha[ d~ere wdl be an obwous visual contrast to natural conditions. wa(er runoff~ ~NO i~';'~ S 0 0 ~Yes I~,No EYes ONe 12Ye: ENo ,F~Ye$ ONe OYes ~No ONe ~Yes ~No ~Yes ~Nc ~*c EYes ~Nc "Proposed A, CtlOn may cause substantial erosion · Proposed Acuon is incompatible with existing drainage patterns · Proposed Action will allow development m a designated floodway · Other impacts: 1 all to Moderate Impact 2 Potent;al Large Impact 3 Can impact Be Mitigated By Project Change [Yes ~'res ~,~lo ~Yes '~Yes IMPACT ON AIR 7 Will proposed action a~:fect air quality,~ ,~N© EYES Ex~mples that would apply to column 2 · Proposed Action will induce 1,000 or more vehicle trips m any given hour. · Proposed Action will result in the incineration of more than 1 ton of refuse per hour. · Emission ra[e of total contaminants will exceed 5 lbs per hour or a heat source producing more than 10 million BTU's per hour ' · Proposed action will allow an increase m the amount of land comm~[teo ~o industrial use. IMPACT ON PLANTS AND ANIMALS Will Proposed Action affect any threatened or endi;ng ,reCJ Examples that would apply to column 2 · Removal of any portion of a critical or significant wildlife habitat. ° Application of pesticide or herbicide more than twice a year, other than for agricultural purposes · Other impacts: 9. Will Proposed Action substantially affect non-threatemj¢.., or non-endangered specie~? ~NO E~YES Examples that would apply to column 2 · Proposed Action would substantially interfere with ally resident or m~gratory fish, shellfish or wildlife specms IMPACT ON AGRICULTURAL LAND RESOURCES "-. 8 ~/'es [~Yes ENo agricultural land oi agricultural tand or, if located in an Agricultural District. more than 2.5 acres of agricultural land · The proposed action would disrupt or prevent installation of agricultural land management systems (e.g., subsurface drain lines, outlet ditches, iietd to drain poorly due to increased runoii) 1 Small to Moderate Impact 2 Potential Large impact C] 3 Can Impact Be . Mitigated By I Project Change eYes []No []Yes []Yes []Yes [~]No IMPACT ON AESTHETIC RESOURCES 11 Will proposed acUon affect aesthetic resources? I~'NO []YES (If necessary, use the Visual EAF Addendum tn Section 617 21. Appendix B ) Examples that would apply to column 2 · Proposed land uses, or pfolect components obviously different from or m sharp contrast to current surrounding land use patterns, whether man-made or natural · Proposed land uses, or prolect components visine to u~ers o~: aestheuc resources which will eliminate or s~g, niiicantly reduce d]eir enjoyment of the aestheuc qualities or that resource 0 [] O EYes ENo ~: Yes. []No I~Yes ~]No IMPACT ON HISTORIC AND ARCHAEOLOGICAL RESOURCES 12. Will Proposed Action ~mpac~ any site or structure oi historic, pre- historic or paleontological importance? ,[~"NO [YES Examples that would apply to column 2 "Proposed Action occurring wholly or partially within or substantially contiguous to any facility or site listed on the State or National Register of historic places. · Any impact to an archaeological site or fossd bed located within the project site. · Proposed Action will occur in an area desi§nated as sens~uve for C] O [] [] © [] ~Yes J~]No OYes ~]No []Yes L-~No ~Yes q IMPACT ON OPEN SPACE AND RECREATION [] [] [] [] []Yes ~-No ~Yes ENo []Yes O~o IMPACT Oi clANSPORTATION 14 Will there be an effect to ex,sting transportaUon syst~mns? Examples that would apply tO Column 2 · Alteration of present patterns of movement of people and/or goods · Proposed Action will ce[ult m malot traffic orobiems 1 Small Io Moderate linoart 2 Potential Large Impact 3 Gan Impact t3, Mitigated By Project Chang ~Yes ~Yes L~.~ Yes IMPACT ON ENERGY 15. Will proposed action affect the commumty's sources of fuei__~, or energy supo~¥'f Examples that would apply to column 2 · Proposed Action will cause a greater than 5% increase m the use of any form of energy in the municipality. · Proposed Action will require the creatron or extension of an energy transmission or mpplv system to serve more than $0 sin~ie or Iwo ~amdv residences or to serve a malor commeroa[ or mdustnM use. · Other impacts: NOISE AND ODOR IMPACTS 16 Will (here be obiectionable odors, no~se, or vibrauon as a result o~ Ihe Proposed Action? - Exam~)les that would apply to column 2 · fllastin~ within 1,500 feet of a hospital, ~chool or other ~ensmve facdity. · Odors will occur routinely {more than one hour per day) · Prol~osed Action will produce operating norse exceeding the local ambient no*se levels for noise outside of structures · Proposed Action ,,viii remove natural barriers that would ac[ as a no,se screen. · Other impacts: IMPACT ON PUBLIC HEALTH 17. Will Proposed Action affect public health and safety~. o Examples that wou{d apply to column 2 · Proposed AcUon may cause a risk of explosion or release oi hazardous substances tie. oil. pesticides, chemicals, radiaHgm, etc) m the event of infect,ous, etc.) 10 (~Yes ~Nc ~Yes E]Nc L~Yes E~JNo ~Yes E~No E~] Yus #20 IMPACT ON CRITICAL ENVIRONMENTAL AREAS Will proposed action impact the exceptional or unique characteristics of a critical environmental area (CEA) established pursuant to subdivision 6 NYCRR 617.14(g)? NO. List the environmental characteristics that caused the designation of the CEA. [Several in Town.] IMPACT ON GROwI'H AND CHARACTER OF COMMUNITY OR NEIGHBORHOOD 98 Will proposed action ,z~fect d',e character el the ex~stl_nj~ommun.tv? ._ · ,,~,,N O EYES Examples that would apply to column 2 · The permanent population of the city, town or village in which the prelect is located is likely ¢o grow by more than 5% · The municipal budget for capital expenditures or operating services will increase by more than 5% per year as a result of this prelect. · Proposed action will conflict with officially adopted plans or goals · Proposed action will cause a change in the density of land use. · Proposed Action will replace or eliminate existing facilities structures or areas of historic importance to the commumty · Development will create a demand for additional community services (e.8. schools, police and fire. etc.) · Proposed Action ;viii set an important precedent for future proiect~ · Proposed Action will create or eliminate employment. · Other impacts: Small to Po[ential Moderate Large ~mpact Impact 3 Can Impact Be Mitigated By Project Change ~Yes I~,No I~J Yes ~No i~ Yes []No 19 Is there, or is there likely co be, public controversy rela[ed to potenua] adverse environmeflcal impacts? '~NO ~YE5 If Any Action in Part 2 Is identified as a Potential Large Impact or You Cannot Determine the Magnitude of Impact, Proceed to Part 3 C Part 3--EVALUATION OF THE IMPORTANCE OF iMPACTS Responsibility o] Le~d Agency Part 3 ~nust be prepared ii one or nlore [mpacl(s} is considered Io be po en rally large, even ii the hnpacl(s) may be mitigated. instructions Discuss the following ~or each impact identdied m Ca[unto 2 ai P~rt 2: 1. 8rieily desccbe the impact. 2, Describe (ii applicable} how the impact could be mmgated or retire:cd to ,l small to modcra(e ~m[)act by ilrolec~ chnnge(s~ ~ased on ti~e iniormation available, decide if it ,s rea~onabl~ ~o cam Jude [h~l¢ this ,npact 11 Appendix B Environmental Quality aeview Visual EAF Addendum This form may De used to provide additional information relating to Ques~.lon II of Part 2 of the Full EAF. (To be comp!.~ted by Lead Agency) Distance [3e t,.veen Visibility l. Would the project be visible [rom: A parcel at land which is dedicated to and available to the public [or the use, enioyment and appreciation o,; natural or man-made scenic qualities? An overlook or parce~ of lend dedicated to public observation, enjoymen[ and appreciation of natural or man-made scenic qualities? ,'~ site or structure listed on the I'tational or. State Regis[ers at Historic Places? · State Parks? The State ?ores[ Preserve? National Wildiife Re[uges and state game re(uges? [National ~atural Landmarks and other outstanding natural features? · National Park Service lands:) Rive~s designated as ~adonal or State Wild. Scenic or Recreational? as part oi the Interstate System. or Amtrak? · A governmentagy established or designated interstate or inter-county foot trail, or one formally proposed for establishment or designation? · A site. area. lake, reservoir or highway designated as scenic? ·¢~4unicipal park, or designated open space? County road? ·State? Local road? Project and Resource (in Miles) 0 ~/.~ % V~ Vi-3 3-5 5 LJi'o ~'res DESCRIPTION OF E ;TIHG VISUAL ENVIROrh'4EHT 4. From each item checked in quesuon l, check those ~vhich generally describe the environment. surrounding Within ~1~ mile *! mile Essentially undeveloped [~, [] Forested [] ~ Agricultural ~ ~J Suburban residential L~ [] Industrial [] [] Commercial [] [] Clrban [] ~ River, Lake, Pond ~ ~ Cliffs, Overlooks ~ ~ Designated Open Space ~ ~ Hilly ~ ~ ~ount~inous ~ ~ Other I~ ~ ~OTE: ~dd ~ttac~ments as needed 5. Are there visually similar projects within: "/z mile []Yes ~1~o '! miles ~'Yes ~P~o '2 miles []Yes []lqo '3 miles ~Yes ~o · Distance [rom project stte are provided [or assistance. Substitute other distances as appropriate. EXPOSURE 6. The annual number of viewers likely to observe the proposed project is I~OTE: When user data is unavailable or unknown, use best estimate. CONTEXT 7, The situation or activity in which the viewers are engaged while viewing the proposed action is FREC~UENCY Holidays/ Activity Daily Weekly Weekends Seasonally Travel ~o and from work [] [~] [] [] Involved in recreational activities ~] [] [] ~] Routine ~ravel by residents [] [] [] [] At a residence [] © [] [] At ,~orksite [] ~ ~ ~ RE: Electric Agency- SEQRA #1 -UNLISTED ACTION Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; be it Resolved that the Town Board of the Town of Southold hereby declares and finds this proposed action to be an UNLISTED ACTION pursuant to the State Environmental Quality Review Act 6 NYCRR et. seq. and Chapter 44 of the Town Code of the Town of Southold. RE: Electric Agency- SEQRA #2 -LEAD AGENCY Whereas the Town Board of the Town of $outhold is considering forming a public utility agency for the Town of Southold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; and Whereas there are no other involved agencies; Resolved that the Town Board of the Town of $outhold hereby declares itself to be the LEAD AGENCY for the above referenced project pursuant to the rules and regulations of SEQRA set forth in 6 NYCRR 617 et. seq. RE: Electric Agency- SEQRA ~4 -NEGATIVE DECLARATION Whereas the Town Board of the Town of Southold is considering forming a public utility agency for the Town of $outhold to purchase power on the wholesale market to be sold to eligible consumers including residential, commercial and municipal corporations; and Whereas the Town Board has determined that this project is an UNLISTED ACTION; and Whereas the Town Board is the LEAD AGENCY; Whereas a Long Environmental Assessment Form has been completed; be it Resolved that the Town Board of the Town of $outhold hereby declares and finds that the above referenced project will not result in any large and important impacts and therefore, is one which will not have a significant impact on the environment; Be it Further Resolved that the Town Board hereby issues a negative declaration for this project pursuant to the SEQRA rules and regulations set forth in 6 NYCRR 617 et seq. and Chapter 44 of the Town Code. RESOLUTION - FEBRUARY 2, 1999 AM,._NDED lie A RESOLUTION AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW WHEREAS,the Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the electric consumers in the Town of Southold and to pass on a cost saving to those consumers,and WHEREAS, pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law Law. Now, therefore, be it RESOLVED, on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas & Electric Agency, hereinafter celled the "Agency". The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A of the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the call of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency, .and be it further RESOLVED that ,(1), The Agency ,on behalf of the Tow~, of Southold is hereby authorized to enter into agreements to purchase all available power from the State, any State agency, any other municipal corporation or other public corporation or any other available source at such pdce, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. (2) The Agency is authorized, from time to time as it may deem appropriate, to enter into agreements to lease or otherwise contract to use electric transmission systems of other utilities as is necessary to deliver such electric service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers.(3) The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town.,and(4), It is estimated that the rates as fixed by the Public Service Commission for the electric service to be furnished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operation of this utility service will be at no net cost to the Agency. This Resolution shall not take effect unless and until approved by the majority of the electors voting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Town of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This resolution shall in no way be construed as a limitation on the power of the Town of Southold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. PROJECT I.D. NUMEER 617.21 Appendix C State Environmental Quality Review SHORT ENVIRONMENTAL ASSESSMENT FORM For UNLISTED ACTIONS Only PART I--PROJECT INFORMATION {To be completed by Applicant or Proiect sponsor) 1. APPLICANT/SPONSOR I 2. PROJECT NAME Town Board i Public Utility Agency for thP Tnwn nf 3. PROJECT LOCATION: Southold Municipality Town of Southold Count~ C, uffolk 4, PRECISE LOCAT1ON (Street acidress and road intersections, prominent landmarks, etc., or Drovide map) SEQR Entire Town of Southold 5. IS PROPOSED ACTION: [] New [] Expansion [] Modification/alteration 6. OEECRIEEPROJECTERIEFLY: Formation of public utility agency for the Town of Southold to purchase power on wholesale market to be sold to eligible consumers (residential, commercial and municipal corporations). AMOUNT OF LAND AFFECTED: Entire Town of Southold Initially acres Ultimately acres WILL PROPOSED ACTION COMPLY WITH EXISTING ZONING OR OTHER EXISTING LAND USE RESTRICTIONS? [] Yes [] No If NO, (~escribe briefly 9. WHAT IS PRESENT LAND USE iN VICINITY OF PROJECT? ?~ Residential [] !ndustrtal ~ ~ Commercial Describe: N/A ~ Agriculture All of above --- entire Town of Southold 10. DOES ACTION INVOLVE A PERMIT APPROVAL. OR FUNDING, NOW OR ULTIMATELY FROM ANY OTHER GOVERNMENTAL AGENCY (FEDERAL. STATE OR LOCAL)? [] Yes [] NO If yes. list agency(s) and permil/aoDrovals 11. ODES ANY ASPECT OF THE ACTION HAVE A CURRENTLY VAIJD PERMIT OR APPROVAL? [] Yes ~' NO If yes, list agency name and ~3ermit/aoproval N/A 12. AS A RESULT OF PROPOSED ACTION WILL -~qSTING PERMIT/APPROVAL REQUIRE MOIDIF!CATION? N/A t CERTIFY THAT THE rNFORMATION ]3ROVIOED AECVE ]S TRUE TO THE 9EST OF MY KNC',VLEDGE S[gnatuce: If the action is in the Coastal Area, and you are a state agency, camDiete the Coastal Assessmen.'. Form before proceeaing with this assessment OVER PART ti--ENVIRONMENTAL ASSF"~MENT (To be completed by Agency) A. DOES ACTION EXCEED ANY TYPE I ~ ,..tESHOLD iN 6 NYCRR, PART 617.127 If yes, coorc~ir~aLe ~be review process and use the FULL FAF. [] Yes [] NO E. WILL ACTION RECEIVE COORDINATED REVIEW AS PROVlOED FOR UNLISTED ACTIONS tN 6 NYCRR, PART 617.87 If NO, a negative declaration may be supersedee by ¬ller involved agency. [] Yes [] No C. COULD ACTION RESULT IN ANY ADVERSE EFFECTS ASSOCIATED WiTH THE FOLLOWING: (Answers may be handwritten, if legible) C1. ~iseng air qualiW, sudace or grounOwater qu=liW or quantity, noise levels, existing traffic patterns, solid waste production or disposal, potential for erosion, drainage o~ flo~ing problems? ~plain briefly: NO c2. Aesthetic, agricultural, archaeological, historic, or other natural or cultural resources; or community or neigl~borhoed character? Explain briefly: No C3. Vegetation or fauna, fish, shellfish or wildlife species, significant habitats, or threatened or endangered species? Explain Prlefly: No C4. A community's existing plans or goals as officially adopted, or a change in use or intensity of use of land or other natural resources? Explai~briefly. No No No No D. IS THERE. OR IS THERE LIKELY TO BE, CONTROVERSY RELATED TO POTENTIAL ADVERSE ENVIRONMENTAL IMPACTS? PART III--DETERMINATION OF SIGNIFICANCE (TO be completed by Agency) INSTRUCTIONS: For each adverse effect identified above, determine whether it [s substantial large, imoortant or otherwise significant. Each effect should be assessed Jn connection with its (a) setting (i.e, urban or rural); (b) probat~ility of occurring; (c) duration; (d) irreversibility; (e) geographic scope; and (t) magnitude. If necessary, add attachments or reference supporting m~terials. Ensure thai explanations contain sufficient detail to show that ail relevant adverse im0acts have been identified &nd edeauately addressed. Check this box if you have identified one or more ootentia y large or significant adverse ~mpacts w~ich MAY occur. Then proceed directly to the FULL EAF and/or prepare a positive dectaration. Check this box if you have determined, based on the information and analysis above and any supporting documentation, that the prooosed action WILL NOT result in any significant adverse environmental impacts AND provide on attachments as necessary, ~he reasons supporting this determination: Tnwn nf .~ot~thold AJHSOUTHOLD:NY FAX B.~X REPLY I~.EMO FAX ( ) FAX ( .) PHONE ( ) TIME DATE f! PLEASE REPLY BY [] FAX [] MAIL J~-.]~O REPLY NECESSARY Total Number of Pages Including This Page _-~ . If you do not receive all [he pages, please contact us immediately. Visual Organizers Inc. (c) 1987 NO. FP 772 A RESOLUTION AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW WHEREAS,the Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the electric consumers in the Town of Southold and to pass on a cost saving to those consumers,and WHEREAS, pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law Law. Now, therefore, be it RESOLVED, on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas & Electric Agency, hereinafter called the "Agency". The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A of the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the call of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency, .and be it further RESOLVED that ,(1), The Agency ,on behalf of the Town, of Southold is hereby authorized to enter into agreements to purchase all available power from the State, any State agency, any other municipal corporation or other public corporation or any other available source at such price, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. (2) The Agency is authorized, from time to time as it may deem appropriate, to enter into agreements to lease or otherwise contract to use electric transmission systems of other utilities as is necessary to deliver such electric service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers.(3) The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town.,and(4), It is estimated that the rates as fixed by the Public Service Commission for the electric service to be furnished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operation of this utility service will be at no net cost to the Agency. This Resolution shall not take effect unless and until approved by the majority of the electors voting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Town of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This resolution shall in no way be construed as a limitation on the power of the Town of Southold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. _ FII RESOLUTION FEBRUARY 2, 1999 WHEREAS, there has been presented to the Town Board of the Town of Southold, on the 2nd day of February, 1999, a Local Law entitled "A Local Law Authorizing the Town of Southold to Establish a Public Utility Service"; now. therefore be it RESOLVED that this Local Law be referred to the Southold Town Planning Board and the Suffolk County Department of Planning for recommendations and reports, all in accordance with the Southold Town Code and the Suffolk County Charter; and be it FURTHER RESOLVED that the Town Board of the Town of Southold hereby sets S:00 P.M., Tuesday, February 18, 1999 at the Southold Town Hall, 53095 Main Road, Southold, New York, as the time and place for a public hearing on this Local Law which reads as follows: LOCAL LAW NO. - 1999 A LOCAL LAW AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW BE IT ENACTED, by the Town Board of the Town of Southold as follows: Section 1: Findings and Purpose The Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the electric consumers in the Town of Southold and to pass on a cost saving to those consumers. Section 2: Authorization for Public Utility Service Pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law. Section 3: Creation of the Town of Southold Gas & Electric Agency To act on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas & Electric Agency, hereinafter called the "Agency", The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A of the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the call of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency, Section 4: Authorization to Purchase Electric Power The Agency on behalf of the Town of Southold is hereby authorized to enter into agreements to purchase all available power from the State, any State agency, any other municipal corporation or other public corporation or any other available source at such price, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. Section 5: Authority to Lease and/or Contract for Electric Distribution System The Agency is authorized from time to time as they may deem appropriate to enter into agreements to lease or otherwise contract to use electric transmission system of other utilities as is necessary to deliver such electric service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers. Section 6: Authority to Sell Power on Behalf of the Town of Southold The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town. Section 7: Cost to the Town of Southold Taxpayers It is estimated that the rates as fixed by the Public Service Commission for the electric service to be furnished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operation of this utility service will be at no net cost to the Agency Section 8: Effective Date This Local Law shall not take effect unless and until approved by the majority of the electors voting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Tow~ of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This law shall in no way be construed as a limitation on the power of the Town of $outhold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. RESOLUTION FEBRUARY 2. 1999 WHEREAS, there has been presented to the Town Board of the Town of Southold, on the 2nd day of February, 1999, a Local Law entitled "A Local Law Authorizing the Town of Southold to Establish a Public Utility Service"; now, therefore be it RESOLVED that this Local Law be referred to the Southold Town Planning Board and the Suffolk County Department of Planning for recommendations and reports, all in accordance with the Southold Town Code and the Suffolk County Charter; and be it FURTHER RESOLVED that the Town Board of the Town of Southold hereby sets 5:00 P.M., Tuesday. February 18, 1999 at the Southold Town Hall, 53095 Main Road, Southold, New York, as the time and place for a public hearing on this Local Law which reads as follows: LOCAL LAW NO. - 1999 A LOCAL LAW AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW BE IT ENACTED, by the Town Board of the Town of Southold as follows: Section 1' Findings and Purpose The Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the electric consumers in the Town of Southold and to pass on a cost saving to those consumers. Section 2: Authorization for Public Utility Service Pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law. Section 3: Creation of the Town of Southold Gas & Electric Agency To act on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas & Electric Agency, hereinafter celled the "Agency". The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A of the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the cell of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency. Section 4: Authorization to Purchase Electric Power The Agency on behalf of the Town of Southold is hereby authorized to enter into agreements to purchase all available power from the State, any State agency, any other municipal corporation or other public corporation or any other available source at such price, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. Section 5: Authority to Lease and/or Contract for Electric Distribution System The Agency is authorized from time to time as they may deem appropriate to enter into agreements to lease or otherwise contract to use electric transmission system of other utilities as is necessary to deliver such electdc service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers. Section 6: Authority to Sell Power on Behalf of the Town of Southold The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town. Section 7: Cost to the Town of Southold Taxpayers It is estimated that the rates as fixed by the Public Service Commission for the electric service to be furnished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operation of this utility service will be at no net cost to the Agency. Section 8: Effective Date This Local Law shall not take effect unless and until approved by the majority of the electors voting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Town of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This law shall in no way be construed as a limitation on the power of the Town of Southold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. RESOLUTION FEBRUARY 2. 1999 WHEREAS, there has been presented to the Town Board of the Town of Southold, on the 2nd day of February, 1999, a Local Law entitled "" A Local Law Authorizing the Town of Southold to Establish a Public Utility Service"; now, therefore be it RESOLVED that this Local Law be referred to the Southold Town Planning Board and the Suffolk County Department of Planning for recommendations and reports, all in accordance with the Southold Town Code and the Suffolk County Charter; and be it FURTHER RESOLVED that the Town Board of the Town of Southold hereby sets 5:00 P.M., Tuesday, February 18, 1999 at the Southold Town Hall, 53095 Main Road, Southold, New York, as the time and place for a public hearing on this Local Law which reads as follows: LOCAL LAW NO. - 1999 A LOCAL LAW AUTHORIZING THE TOWN OF SOUTHOLD TO ESTABLISH A PUBLIC UTILITY SERVICE PURSUANT TO SECTION 360 OF THE GENERAL MUNICIPAL LAW BE IT ENACTED, by the Town Board of the Town of Southold as follows: Section 1: Findings and Purpose The Town Board of the Town of Southold does hereby find and determine that there will be inexpensive sources of electric power available in the near future to the Town from the State, State Agencies, other municipal corporations or other public corporations, and that there is a need for this Board to authorize the establishment of a public utility service on behalf of the electric consumers in the Town of Southold and to pass on a cost saving to those consumers. Section 2: Authorization for Public Utility Service Pursuant to Article 14A of the General Municipal Law the Town hereby establishes a public utility service, as such term is defined in Section 360 of such article, which is authorized to establish, construct, lease, purchase, own, acquire, use, and/or operate facilities within or without the territorial limits of the Town for the purpose of furnishing to itself or for compensation to its inhabitants any service similar to that furnished by any public utility company specified in Article 4 of the Public Service Law. Section 3: Creation of the Town of Southold Gas & Electric Agency To act on behalf of the Town with respect to such service, there is hereby created the Town of Southold Gas 8, Electric Agency, hereinafter called the "Agency". The Agency shall possess any and all powers granted to a public utility service pursuant to Article 14A of the General Municipal Law and any other applicable provision of the law. The Agency shall have seven (7) members appointed by the Town Board and including two (2) Town Board members, the Town Attorney, the Town Comptroller and three (3) members of the public at large. Each of said appointments shall be for a four (4) year term except that the initial appointments shall be one for a two (2) year term and one for a four (4) year term by such appointing authority. No compensation shall be paid to persons for the performance of their duties on behalf of the agency. The Agency shall meet at the call of the Chairman. A quorum of four (4) members shall be required for any action of the Agency and such action shall require the affirmative vote of the majority of the members of the Agency. Section 4: Authorization to Purchase Electric Power The Agency on behalf of the Town of Southold is hereby authorized to enter into agreements to purchase all available power from the State, any State agency, any other municipal corporation or other public corporation or any other available source at such price, as may be negotiated by them and such other entity, not to exceed, however, the price thereof allowable by law. Section 5: Authority to Lease and/or Contract for Electric Distribution System The Agency is authorized from time to time as they may deem appropriate to enter into agreements to lease or otherwise contract to use electric transmission system of other utilities as is necessary to deliver such electric service. The amount to be paid under such arrangement shall not exceed the cost incurred by such other utility for transmitting the power purchased through the system of such utility, the cost of leasing such incident connecting facilities and metering devices as may be required and related administrative costs. Such arrangement shall contain assurances that such power purchased by the Town of Southold will be distributed to any eligible consumers. Section 6: Authority to Sell Power on Behalf of the Town of Southold The Agency is hereby authorized to enter into agreement(s) to sell the power it purchases from any entity, as authorized hereby, to the eligible consumers of electricity in the Town at a price not to exceed the cost of such electric power, the system leasing, operating, administrative and transmission costs relating to such power, and the administrative costs that may be incurred by the Town in the purchase and sale of such power, but in no case shall the price to the consumer provide for a profit to the Town. Section 7: Cost to the Town of Southold Taxpayers It is estimated that the rates as fixed by the Public Service Commission for the electric service to be fumished to eligible customers, as set forth in Section 6, will be sufficient to reimburse the Agency for all of its costs in furnishing such electric service and that, accordingly the operation of this utility service will be at no net cost to the Agency. Section 8: Effective Date This Local Law shall not take effect unless and until approved by the majority of the electors voting at the next General Election of the Town of Southold and, in such respect, the Town Clerk of the Town of Southold shall publish this proposition embodying the terms of this resolution in the manner provided for in Subdivision 5 of Section 60 of the General Municipal Law. This law shall in no way be construed as a limitation on the power of the Town of Southold to exercise the right of Eminent Domain in connection with the acquisition of plant, transmission or distribution sources of any utility as may be authorized by subsequent legislation and subject to a subsequent mandatory referendum of the voters of the Town of Southold. PUBLIC HEARING SOUTHOLD TOWN BOARD APRIL 28, 1998 8:00 P.M. ON A PROPOSED "LOCAL LAW IN RELATION TO CREATING A MUNICIPAL UTILITY IN THE TOWN OF SOUTHOLD". Present: Supervisor Jean W. Cochran Councilwoman Alice J. Hussie Justice Louisa P. Evans Councilman William D. Moore Councilman Brian G. Murphy Town Clerk Elizabeth A. Neville Town Attorney Gregory F, Yakaboski Absent: Councilman John M. Romanelli COUNCILWOMAN HUSSIE: "Public Notice is hereby given that there has been presented to the Town Board of the Town of Southold, Suffolk County, New York, on the 31st day of March, 1998, a Local Law entitled, "A Local Law in Relation to Creating a Municipal Utility in the Town of Southold", pursuant to Section 360 of the General Law of the State of New York. Notice is further given that the Town Board of the Town of Southold will hold a public hearing on the aforesaid Local Law at the Southold Town Hall, 53095 Main Road, Southold, New York, on the 28th day of April, 1998, at 8:00 P.M., at which time all interested persons will be given an opportunity to be heard. This proposed "Local Law in Relation to Creating A Municipal Utility in the Town of Southold. reads as follows: TOWN OF SOUTHOLD A Local L~w in Relation to the Creatlon of a Municipal Electric Utility in the Town of Southold BE IT ENACTED, the Town Board of the Town of Southold as follows: 8ecrt::l.on ~ TL~:le, Put'Dose an~ De~J. nJ.t:l, one. Pursuant to Section 10 of the Home Rule Law, and Section 360 of ~he General MUnicipal Law, the Town of Southold, County of Suffolk and State of New York, hereby enacts 'this local law to create the Town of Southold Municipal Electric Utility. P9 2 - PH 1.1¢B). Effeative Date. The local law shall take effect on the filing of the approved Local Law with the Secretary of State of New York,' which shall be wit/xin five (5) days after its approval by a simple majority of the voters by mandatory referendum at an election to be held to approve this local law, pursuant to Sectisn 360 of the General Municipal Law. 1 · 2 · Intent. ~ the Town of'Southold is a Town duly formed under the laws of the State of New York, and~ WHEREAS the Town Board Of the ~own of Southold is duly' empowered pursuant to Section 360 of the General Municipal Law of the State of New York to form a Municipal Electric Utility for the WHEREAS it is essential for the well-being, livelihood and safety of the residents and businesses of the Town, and of the other consumers of electric power in the Town, inclu~ing the Town itself, and of their families and guests, for the economic climate of the Town, and for the protection of private and public prgperty within the Town and the value of that property, that the supply and distribution of electricity to the residents, businesses *and other consumers of electric power in the Town, and the Town itself, be provided in a reliable man, er, and at a fair and reasonable cost, and~ WHEREAS the Town .Board has determined that the most reliable, fair, and economical way for the supply of electricity .and pg 3 - PH ~. electrical service to be provided to the Town of Southold, its residents and businesses and institutions, is by the creation of the Town of Southold Municipal Electric Utility, the Town Board of the Town of Southold hereby, enact this local law for the intent and purpose of establishing a Municipal Electric Utility. pursuant to Section 360 of the General Municipal Law, and all of the' powers and duties thereunder. Section 2.;~.:. and Faollities~ Maintenance and' Service, and SUPplY The Town of Southold Municipal Electric Utility shall acquire the necessary equ~m~and facilities, and either establish necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of electricity such as are necessary for the creation of the Southold Municipal Electric Utility. The proposed method of constructing, leasing, purchasing, or acquiring, the~and facilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: ~ 0 I~T. '.~en~. an~ Fao~lit~es. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boun~aries of 'the Town currently owned by the Long Island Lighting corporation ("Lilco"), and purchase, cond-mnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional ~frastz~/cture as may be needed to separate itself from the Lilco system. pg ~. - PH The ToWn of Southold Mullicipal Electric Utility also may construct its own generating facilities to supply electrical energy to its customers and, in its discretion, may construct new infrastructure instead of acquiring Lilco property. E. The maximum and estimated cost cf the items set forth in subparagraph A. hereof, should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisition of the eq~,facilit~ies, distribution system and any other costs that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issuance .of a bond by the Town for the Useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs of the acquisition, construction, development, implementation and operation of the TOWn of Southold Municipal Electrio Utility including the debt service of any finallcing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other costs of the Southold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of, Southold Mullioipal Electric Uti. lity, and will not have any effect on the general budget or real estate taxes of the ToWn. 2.2. · Barrios a~d Maintena~ce of Equipment, Fao415ties, and D~s~ibut~on System. pg 5 - PH . A. The Town of Sou~hold Municipal Electric Utility will obtain ~ervice and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable a~d acceptable maintenance, service and billing companiesl The contracts will be supported wherever possible by a performance bond of an amount acceptable to the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service and billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Town deems it to be in its best interests to do so. 2 · 3 · Electrical Supply. A. The .Town of Southold Municipal Electric-Utility will obtain its supply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof ~ $ · 0 · Mandatory Referendum. This Local Law shall Be subject to approval by a mandatory referendum of the residents of the Town of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. pg 6 - PH The Town of Southold Municipal Electric Utility shall be effective and granted the full posers entitled to it by law on the date of the approval by a simple majority of the referendum, and the filing of the Local Law with the Secretary of State of New York. BY ORDER OF THE TOWN BOARD OF THE TOWN OF SOUTHOLD, SOUTHOLD, NEW YORK. Dated: March 31, 1998. Elizabeth A. Neville, Southold Town Clerk." There is an affidavit assuring the publication of this in the Traveler-Watchman, also that it has been posted on the Town Clerk's Bulletin Board. There is no correspondence. SUPERVISOR COCHRAN: You have heard the reading of the Local Law. Usually when we have a hearing on a Local Law, I, as Supervisor, ask is there anyone who would like to speak pro or con in relation to the Local Law. I think this is much too important to us, so I am not going to ask pro or con. I am just going to ask for anybody that has any comment, or would like to ask questions. No question is too small, and we will take it from there. So, please, I don't want anybody to go home with a burning question. I want everyone that has something to ask don't feel it is silly, ask it. We, as a Board, have a lot of questions. There is a lot of information that has to be obtained before we ever get to where we think we want go. So, don't feel that any question is too small, and I will start by taking this gentleman's comments right here. Give us your name, and then share with us. WILLIAM ENGLIS: My name is Bill Englis, Donna Drive, Mattituck. I am a long time follower and investor in electric utilities. I am also a member of the Southold Town Board of Assessment Review. I have two questions for the Board. Item number one, have we had any indication whatever that the regulatory authorities are going to let Southold just walk away from it's obligations under the stranded course and long term debt of LILCO? After all we own part of that in essence. That is question number one. Question number two, have we considered all the ramifications of condemnation? Under condemnation unless the law has been changed in the last few years you condemn something, and then the price is set after the fact by a Judge, and you have no further negotiation. You are stuck with what the Judge says, this is what you are going to take. Those are my two questions. Can we walk away with our share of the debt, and can we get around the condemnation? SUPERVISOR COCHRAN: Gary, I am going to have you answer those questions. GARY VIGLIANTO: They are very astute questions, and they are very contemporary. Those are exactly the questions that seem to be of most importance throughout these studies that we have done. First let me address the stranded asset issue. The stranded asset issue has been now, finally, recognized by the Federal Energy Regulatory Commission, and they have created an entire structure by which you can get stranded asset value prior to going through condemnations. Southold has a unique situation. SUPERVISOR COCHRAN: Do me one favor, explain stranded assets. They are good questions, but I want to make sure that everybody understands. pg 7 - PH WILLIAM ENGLIS: They are going to get paid by the rate payers. It is assets sitting there, where you are not going to get any revenue. GARY VIG/IANTO: It's a unique term. It is something that is called an asset, that is providing nothing but debt. How that is considered an asset in the world of regulatory control and utilities is very similar to how they term a lot of their things. What they are specifically talking about on Long Island is specifically stranded assets is the Shoreham Nuclear Power Plant being the most devastating of all the assets. Now, that was clearly recognized in FERC. FERC is the Federal Energy Regulatory Commission, and it has made two very profound statements, or remarks pertinent specifically to Shoreham. Number one is that the ruling on that amount of stranded asset is very clear. Any nuclear power plant that has not commercially sold electricity, that language is there specifically designed for the Shoreham debt. It is only depends on a debt under the most optimal circumstance like 50% of their stranded asset value. WILLIAM ENGLIS: I am not talking about Shoreham alone. They must have other stranded assets, and we walk away from our share of the stranded assets, and push them over on other rate payers? I don't think SO, GARY VIGLIANTO: That would be what it seems like provided that you didn't get the whole story, but let me explain to you why I believe there is a lot of this. You may not be able to walk away from all of it, and certainly we intend, we built into the study a certain amount of that stranded asset value, and we based that on the formula. One is part of the formula for the stranded asset, Shoreham, that recognizes at best fifty percent. The other part recognizes the value of the franchise agreement, and in Southold there is a very specific franchise agreement. We believe that the franchise agreement has some very specific language that will enable us to get a favorable rule we prefer, All of this you will decide and have in your hand prior to any condemnation, so we will file for a 211. Let me be a little more specific about what this Local Law is. When we first heard about $~7,000,000 as a bond for a community it sounds like an overwhelming number. First and foremost, let me tell you that if LIPA does finally go through, and if we are stuck in Southold with LIPA the number is far more. You will be paying at least three times that number in order to maintain your electric service here, so the $47,000,000 is really not a significant number, especially when it is not based on your taxable revenue. It is based on real estate. It is based on the rate you will be paying your electric. So, going back to the stranded asset claim, of course LILCO will make a very substantial stranded asset claim. We will have that meted out at the Federal Energy Regulatory with a file far before we go forward with the condemnation. WILLIAM ENGLIS: How about the condemnation now? The law on condemnation says, you take something over, and then the price is set later by the court. Has the law been changed in the last two years? GARY VIGLIANTO: The law says that a fair market value is established by both parties, and, of course, we expect there will be a disparity between the recommended price that we believe it is valued, and what LILCO will say it is valued at. That is if LILCO intends to go forward pg 8 - PH with a lawsuit will be figured out at the end of the court battle. However, remember, this is not a mystery. There is a standard regulatory practice in evaluating, and valuing the assets of these utilities. There is case law that is established nationally, and there is a value system that is established. It would be the same as when the town wants to condemn any piece of property. There is an appraisal program, and an assessment that usually goes out that is generally very close. This is not new territory, although what is being done on Long Island is fairly new, but the actual condemnation of utilities has been determined in previous case law. WILLIAM ENGLIS: The court says what you are going to pay, and you can't argue. That is the final judgement.. The court will say this is the price. If they say it is $50,000,000 or $60,000,000, you are stuck with it. That is the law. GARY VICLIANTO: The law as you know, there is always something to appeal, but the court will base it's opinion based on standard accounting practices. It will not base it's opinion on some pie in the sky starting number that LILCO will come up with. We will provide to you all the numbers that we believe are accurate, and basically the town will make it's decision in the voters booth. This, tonight, what you are talking about, is a Local Law that will enable you to have the right to go forward with a public referendum. There is nothing in passing this Local Law that permits you to spend any money whatsoever. Remember what is being done tonight, and what will be done in two weeks, and what will eventually be done by public referendum, even once the referendum passes you will never spend a dime. The only time you will spend the money to go forward with your electricity is after you have gotten all the numbers in, all of the estimated values in, all of the supporting data in case law. All of the attorneys will look, and will give you a fairly close idea of where you are going. The only time you will spend money is far beyond this point, tonight and later on in this month when the Board votes on a Local Law it is strictly to go forward getting the information, and trying to secure your position ahead of the light promotion. There is no doubt if the LIPA goes through, even in today's paper, if anyone picked up today's newspaper you will understand that if LIPA goes through, the only thing you are going to be doing is signing yourself to a thirty year bond, that is far greater than $47,000,000, far greater, and will not reduce your price below what is generally about three times the National average. In fact, in the future LIPA has said that they can remain Iow on their rates, or as Iow in summer, between 14 and 19% of what they claim in rate savings, they can only claim that for several years. They have actually admitted that their rates are going to be going up after that. SUPERVISOR COCHRAN: Gary, I am going to pull you back a little bit. In relation to, you know, input from the public here, but your colleague I think wanted to add something. TOM SERVANTO: Distinguish the condemnation, in the three villages that we have already moved and formed municipal utilities on Long Island, which are Farmingdale, Lynbrook, and the Village of Hempstead, we have come up with a condemnation value. In Lynbrook we came in with $17,500,000, and LILCO was $15,000,000. In the other two villages we were slightly higher. We come in. We give you accurate high conservative pg 9 - PH numbers, and we have had absolutely no feelings from anyone, from LILCO, that these numbers are incorrect. In fact, they have admitted in testimony, they had court stenographers in Hempstead, that our numbers are very accurate. Their only question with stranded assets, stranded costs, and those stranded costs we feel we have a way of addressing them to actually provide significant savings to the community. WILLIAM ENGLIS: What is your status now with the Village of Hempstead? GARY VIGLIANTO: They are advertising their public condemnation hearing. It is scheduled in about three weeks. Farmlngdale already has had their public condemnation hearings, and they are moving forward. WILLIAM ENGLIS: The reason I ask, I have a very good friend on the Hempstead Board, and he tells me nothing is moving forward yet. GARY VIGLIANTO: Which member of the Board is it, because we have worked with all of them? WILLIAM ENCLIS: Charles R. Perue. GARY VIGLIANTO: Charles has been involved in that from the beginning. We are meeting there tomorrow as a matter of fact. They are moving quickly. They have a public yes. They have a bid opening on Thursday. SUPERVISOR COCHRAN: Gary, I want to move ahead, because there are a lot of people that might want to say something. Is there anyone else that would like to address the Board on the issue? You have to come up to the mike, and give your name, so it can be recorded for the minutes. CARL BRATLIE: My name is Carl Bratlie. [tape change) GARY VIGLIANTO: Personally, I believe, with a new utility in the beginning form it is provided for in the study. We have bid concepts as far as how much it would cost. We have bona fide legible contractors willing to perform within that bid price, put out the bid for the first several years. Let our legible contracting firm take over for awhile, and the Town can take over for awhile, and if the Town later on could maneuver into it's own department they can do that. It has already been established in our study that a bona fide contractor would perform COUNCILWOMAN HUSSIE: Mr. Bratlie, you and anyone else can come to the Town Clerk's Office and get all of that information. The costs are all itemized, and just for everybody's edification we have estimated the cost of the actual acquisition of the facilities. We have allowed for the stranded allowance, for the meters, and the metering, for the start-up expenses, for working capital, for the legal stuff, and the engineering that has to be done, also, one year of the debt service, because obviously we can't pay for that until we get some revenue in for the bond, and the whole thing, so all of that has been tallied. I suggest everybody get this, because you will feel more informed. pg 10 - PH GARY VIGLIANTO: It is an extensive document. You are certainly welcome to, if you have more question afterwards, to call our offices if you like, and we will address any points you have. This is only new, and the reason that it has become very helpful, and the reasons actually you are able to do this now is because of the changing Federal regulations. That is a very recent change, and as a matter of fact, it has only finalized just several months ago by the Federal Energy Regulatory Commission, That is what has permitted this whole concept to go forward, because up until now you could only buy electricity from within your own state. Now that the Federal Energy Regulatory Commission has permitted a change, you can buy from outside the State, where the rates of electricity sales are far lower. I mean, there are bids now coming in for the Lynbrook program for kilowatts, or pneograph, and of course there is other factors put into that. It really does at this point because of the change in the regulations it makes sense to at least explore, and as I said, this Board has acted very consciously throughout this process, and obviously rather than postponing it over the difference of one letter in the public notice. SUPERVISOR COCHRAN: That was only one part. GARY VICLIANTO: Very small technical issues, shows that they are very, very committed to doing this to the utmost of the most exact level of standards. The bottom line is what you are talking about tonight, and you will be doing right up to the referendum is not spending a penny, but providing options that may still be available to us as we go along. Once LIPA becomes actually a part of the lives of Long Islanders I think the process is going to become much more difficult. It still is not impossible, but it will become much more difficult. The Board believes that this a step at least in keeping your options open as well as the referendum going forward. Don't for one minute believe that you are going to be spending SLt7,000,000 by saying, yes, even at the public hearing, or even at the public referendum. That is much further down the road, and only after all the numbers are in. TOM SERVANTO: Gary, you hear that $L[7,000,000 figure, and, wow, it ~s a tremendous amount of money. That $~,7,000,000 includes all the costs that you are now paying to LILCO, the cost of upgrading this system, the cost of operation and maintenance, the cost of insurance, legal fees, all of those things that are now being paid in your rate at $.17 a kilowatt, and up to $.35 a kilowatt, if you have any kind of a store, or if you have a business. Those are going to be borne now by the municipal utility, and it is not being paid out of the tax base. It is revenue base bond, so it is just transferring what you are paying from LILCO, but what you are eliminating is the $700,000 salary of the people up above, and $200,000 for Vice President, and if you look at LILCO, they have wonderful workers in the field. We are certainly not out to take a shot at LILCO. They do a great job. I mean if you have a serious storm, they are out there just like any other utility in the country, and their record is pretty decent through Hurricane Gloria, but over the years what happened is there has been a buildup. There are about 5,500 people who work for LILCO, and less than 1,~00 of them are actually working in the field. They have mapping, marketing people. There is a lot of money being spent in that area, but if you check with them, the guys in the field do a wonderful job. I am sure the guys in the offices do too, but it is like the millenary, after awhile pg 11 - PH you have so many people, and it just keeps growing, and growing, and growing. SUPERVISOR COCHRAN: Yes, Mr. Carlin? FRANK CARLIN: Frank Carlin, Laurel. I could be here until 12:00 o'clock, but I am going to keep it as short as possible. I have been through this in 1986. Now, we are going through it again. I am going to address Councilwoman Hussle. The proposition went down, number one, in '86, not by 230. It went down by 350 votes. I always said that I give credit where it is due. If you are right, you are right, if you are wrong, you are wrong. 1994 in the Traveler-Watchman news digest, I won't read it all, Tom Wickham said, when he was on the Board, and you, Alice Hussie, brought up the subject about a Southold utility company. His two remarks what he said was, it is too risky, and the town was too small. I absolutely agree with him. For once I agree with him. This town is too small to take on any kind of a project. You people remind me of LIPA. They remind me of Peconic County. Everything is' on paper, but is it reality, or what is it? These bonds you going to float for $47,000,000, are they general obligation bonds, or what are they? COUNCILWOMAN HUSSIE: Revenue anticipation bonds. FRANK CARLIN: Are they municipal bonds? Are they tax-free bonds? COUNCILWOMAN HUSSIE: Yes. FRANK CARLIN: When you buy these bonds do you get tax-free income on them? COUNCILWOMAN HUSSIE: Yes. FRANK CARLIN: I am going to ask you a question, Mrs. Hussie. We float a lot of bonds in this town, land preservation bond, $2,000,000. You want a pool. You want $2,000,000 for that, and now you want $47,000,000 for this. That is $51,000,000. What is this town going to do down the line when all these bonds mature? Where are you going to get all this money from? From the sky? COUNCILWOMAN HUSSIE: In this particular instance to put things in prospective, presently all of the rate payers within the Town of Southold, all the businesses, and all the people llke you and me, put $19,000,000 a year into LILCO's coffers. If we go through with this, even at the $L[7,000,000 debt that we are looking at, it will only cost us as a aggregate group $12,000,000. Now, I can do the math as well as you. That is a $7,000,000 difference with the worse case scenario. I am not going to go into all the bonds that Southold has. I am just dealing with this one right now, and so I look at ~t as a definite savings, a terrible number. $47,000,000 is enough to scare anybody, but if you stop a minute, and think of where the money is coming from, instead of writing your check to LILCO, you will write your check to us. You know what I mean. We are not getting anything out of this. The other side of it is that at this point these numbers as you say are perhaps not as exact as they should be, and indeed they are the worse case scenario. By forming an electric company we pg 12 - PH become an entity with which to be reckoned. We can go out, and say, okay, we want x number of megawatts of electricity, what will you charge us? We will know the wheeling fees. We can go out for legal counsel, find out what they are going to cost. We will Have real numbers. I know, like Yogi Berra said, this is deja vu all over again. FRANK CARLIN: Everything sounds so rosy. SUPERVISOR COCHRAN: May I say something? This is a decision made by the entire Town Board, not just by one person. It takes a majority vote. I was on the Board ten, twelve years ago, when we investigated it, and there were certain reasons why it would not work at that time, and on the advise of legal counsel we dropped it. There has been enough changes now, that it would behoove us to look at it again, and that is all we are asking for. We asking for cooperation from the community to allow us to look at it again. We want to give you every fact and figure, every piece of information we can glean out of the experts or anywhere else, Frank, so that we all understand, because it is a big obligation that we would be taking upon ourselves as a community, and, yes, these funds have to come from somewhere, so before as the gentleman said, before one cent is spent, and through this whole process we can say, no, at any point. So, we are just trying to get the information out to you. It's a great idea if we can make it a reality. We don't know that yet, but we are looking at it, and if it can be a reality, it is going to benefit the community. Just let us look, that's all we are asking. FRANK CARLIN: Everybody wants their rates down. I understand what you are saying, and youse didn't drop it when you were on the Board in '86. It was voted down by the proposition number 1. People didn't want it. SUPERVISOR COCHRAN: Frank. It did. We didn't fight hard to make it happen, FRANK CARLIN: Don't say that the Board dropped it. The Board at that time spent $30,000 in researching this thing. Now, how much so far have you spent on it? COUNCILWOMAN HUSSIE: $12,000. FRANK CARLIN: So far, but why make a issue for that one? SUPERVISOR COCHRAN: What the $12,0007 We budgeted. FRANK CARLIN: Meanwhile I am talking about the town is too small. Let's not take Greenport for an example. Greenport has a population of about 2,000 people. They have a village. They can supply that, but no profit. We have 20,000 here. SUPERVISOR COCHRAN: Frank, we look at the revenues, that we are now paying to LILCO, and there is no reason those figures should change. Am I right? You can at least look at something. We all pay LILCO right now. You are still going to be provided the same electricity, and I haven't decided whether I support this or not, but I would like to look at it. pg 13 - PH FRANK CARLIN: I am up here to give you my viewpoint. That is what you have the public meeting for. I am trying to keep it short for you. If anyone would like to finally debate on this, anybody, these people, or Mrs. Nussie, you, you can do so. That is how I operate. SUPERVISOR COCHRAN: can move on. I know that. Make your statements so that we FRANK CARLIN: The reason why Greenport can do it, they had only 2,000 people in the village. We have 20,000, 200 miles of road, which usually has the utility pole on. We can't handle that. Knowing how Southold operates we can't handle a utility company. I~11 be honest with you. I have lived out here for 44 years. You take that LILCO, I~m not sticking up for LILCO, LILCO has a man on duty 24 hours a day with a truck. Are we going to supply a man 24 hours with a truck? COUNCILWOMAN HUSSIE: Yes. FRANK CARLIN: Where are you going to get all these lineman. They don't work for peanuts you know? COUNCILWOMAN HUSSIE: Mr. Carlin, again, if you would read this you would find out all those answers as they are projected today. FRANK CARLIN: What are you going to do when a northeaster comes along? We have been pretty lucky. We haven't had tornados here yet like they had down in Arkansas, or floods in California. Do you think Niagara-Mohawk, LILCO, or Con Edison, when they got their own troubles are going to give you support with your ten people? You only want about 30 people on the staff here, but they aren't even going to be lineman. You talking about salaried. They will be Union, right? Will they be Union? COUNCILWOMAN HUSSIE: Probably. FRANK CARLIN: They won't like it so they want to go on strike, right? Medical, pension funds, cost of living raises. SUPERVISOR COCHRAN: Frank, the purpose of this public hearing is not to argue with Board members. The purpose of this public hearing is to express yourself, and give us any pros or cons in a calm manner, and we would be very happy to continue. You are taking valuable time away from other people that might want to say something. You certainly may say what you want to say. Would you please finish you remarks? FRANK CARLI N: These gentleman mentioned about Farmingdale, Lynbrook, and Hempstead, they all passed referendums. They are going ahead with it. Let's get back to what I said about this town being too small. North Hempstead, and Hempstead has a population of 900,000, they can afford to have a utility company. I know how Southold operates. We can't handle it. I will leave it llke that for now. I am not finished with this yet. SUPERVISOR COCHRAN: Thank you for the comments. pg 14- PH GARY VIGLIANTO: Can I just address some of the comments? SUPERVISOR COCHRAN: If it doesn't get into a match. We want positive, or negative input. GARY VIGLIANTO: I would just like to make a statement, but clearly I have to explain that the difference between 1986 to today is vast. There is absolutely no comparison to a study that was done then. As a matter of fact we were given that study to look at. Things have changed drastically in the last two years, and so going back ten years is just simply, that type of calculation can not be made. The Federal Energy Regulatory Commission has really deregulated the interstate transition, which has dropped the price drastically of outside electric, so right there is a tremendous difference. There is an enabling legislation now, that permits you to do it. I will just give you some of the points about size, because your concern is valid, but there are over 2,000 operating municipal utilities in the United States. One out of every seven people are served by a municipal utility. Their average rate of electric is below six cents a kilowatt, and while you are r~ght that the Town of Hempstead is large, and the Village of Hempstead is also large, as is Farmingdale. But upstate New York where we also are helping communities create utilities, they have hundreds of miles of road w~th far lighter population than here in Southold, and it made sense. There are small municipal utilities virtually throughout the United States that operate very effectively even with hundreds of miles of road. When you get into rural America, for instance, Nebraska where they no longer have private utilities whatsoever. There are simple none left. They don't permit them by law. They only have municipals and co-ops. You can go hundreds of miles of roads with far fewer people than we have here in Southold, so the size issues are disconcerting is clearly addressed in this study, and you can get the bona fide work force brought in even through competitive bid, and that will be unionized, and they will be bound by that price regardless of what the union does, but as you know unions are fairly stable in their position. So, realistically, you can't make a fair comparison. Read the study, and make your comparison based on what you see then, and we will be more than happy to talk about it, but you just can't compare what happened in 1986 to today. It is just unfair. SUPERVISOR COCHRAN: Thank you, Gary. Frank, I will come back to you. MARY MOONEY-GETOFF; My name is Mary Mooney-Getoff. I live in Southold, Madam Supervisor, I would llke to respectively suggest that for the rest of this hearing, and the future hearings that you limit speakers to two minutes, or whatever you think is fair. SUPERVISOR COCHRAN: We will take it under consideration. MARY MOONEY-GETOFF: So that we could kind of visualize how this might play out in Southold. Could somebody explain what happened in Messina, which did this same thing, and they now have several years of experience. COUNCILWOMAN HUSSIE: I can do that. SUPERVISOR COCHRAN: I would prefer having Gary, please. pg 15 - PH GARY VIGLIANTI: A lot of people have brought up Messina. Messina was actually done during those difficult times of 1980. They actually did it in '70. They did it about fifteen years ago, when they took a very long and lengthy court battle, because we didn't have the legislation that we have today. Messina then brought a battle against Niagara-Mohawk. The price at that time was about $.08 a kilowatt in their community. Messina battled it for about seven years because as I said again, there was no mechanism. They actually had to create it through the courts, and we all know how lawyers like to make things more complicated, so it took a long time. When Messina got done, at the time they got done, they wound up paying only about $.052 a kilowatt, which really was not that drastic a difference from $.082. What had happened at the end of that journey, though, and today is really the basis of it's success. Messina, New York, currently has the most modern electrical system in the State of New York. They have upgraded their system far beyond the capacity of the old host utility of Niagara-Mohawk, which by the way, is threatening bankruptcy because they are besieged now by other communities trying to do what Messina did. Messina today, and they have just announced a reduction for third time in their rate, unfortunately there is a law in the Public Service Commission that any rate change better than 2% needs to go to them for approval, They have been waiting to get this last rate change installed, because they want to drop their rate again for the third time in two years below $.04 a kilowatt. They are now in Messina paying $.04 a kilowatt when Niagara-Mohawk is paying $.14 a kilowatt. That is the difference, and maybe we should talk a little bit quickly about the philosophy between the investor owned utility, and whether an investment owned utility as opposed to a community owned utility. An investment owned utility has one prime directive, and that is not to sell you electricity. Their prime directive is to make as much money from the only source they have, the ratepayer, and deliver it to the stockholder as a profit. That is what they do for a living. Your electricity is their product. You are the sheep being brought to be sheared. CARL BRATLIE: And the tax collectors. Don't forget the tax collectors. They are collecting. GARY VAGLIANTO: They want you to believe that, but in our investigation categorically they misrepresented their taxes, but what we have allowed for a misstatement is the replacement of this lost tax revenue without the threat of a certiorari, which as you know being involved in utilities, virtually everyone on Long Island, LILCO would love to claim that their utility equipment is worthless when they are paying taxes on it, but when we go to condemn it they are going to say that the same pole that was only worth $20,00 for taxes is now worth $2,000. Let's not forget the judge is a member of the public. He will understand those terms, when he comes to grips with that condemnation. So, they are going to be hung by the rope they provide, when they go out and they want to pay less taxes. Messlna, New York, has been an absolute success from one end to the other. You can call people in Messina. Call the Messina Utility themselves. They will tell you. They also created things in the community with the surplus of funds. They are rolling down the rate, and they still have extra money. Now, as a utility they have to invest that extra money. They have done things llke all-night hockey programs, where they have one of the best hockey programs in the state. They have a youth program in pg 16 - PH their community. They also fund a lot of their senior programs through the electric utility. They also do all the tree trimming in the community, not anymore as a capital budget item, but as a item out of the utility charge, while they have been dropping their rate. They also do some snow plowing, and road repairs, because the utility can fund through it's own basis. So, these are the things that would be provided for, if you go forward with the municipal utility, but remember, the vote of the Board next year, or in two weeks, the vote during the referendum does not commit you to go forward with anything other than keeping your options open, and in fact when it passes the public referendum you will then be a bona fide utility. You have a license, that doesn't mean you have to go forward. Suffolk County took a license in 1986, the same time that Southold didn't do it, and they just revoked it. They just started to put it through. They are now about to buy about 300 megawatts of electricity at under $.05 a kilowatt outside the LIPA Program, and they are an advocate of the LIPA Program. The bottom line is, you have to preserve your options. I think what the Board is moving to do, and what the people are ultimately voting on is a move to provide themselves with the options of change, not to spend the money, and until the research is done, and bids are in, that is when you can go forward. SUPERVISOR COCHRAN: Thank you, Gary. Yes, Mr. Haupt? Anyone that hasn't spoke I will take first. HAROLD HAUPT: I got here late. I didn't hear the whole thing. When you are talking about taking over the utility, you are talking about buying everything out, and you run it? GARY VIGLIANTI: Everything that is required for the distribution. HAROLD HAUPT: LILCO? Okay, how much taxes right now do we get back from SUPERVISOR COCHRAN: I don't know.They are the largest taxpayer in town. HAROLD HAUPT: They are the largest taxpayer? SUPERVISOR COCHRAN: In the community, yes, they are. I am not sure, Hoagy. I know they are number one. HAROLD HAUPT: They are the largest taxpayer for the town. Who is going make up all this lost revenue? COUNCILWOMAN HUSSIE: There is an amount given in there which is pretty much comparable to what LILCO is paying now, which is called a PILOT, Payment In Lieu Of Taxes, and that what will be paid, so there will be no impact. I mean we will not feel the lose of the LILCO check. HAROLD HAUPT: Until you start getting something back, we are going to feel it in our taxes. pg 17 - PH COUNCILWOMAN HUSSIE: That has been compensated for including the wages that we will have to pay before we get anything back from the public. All of the first years expenses are included in the estimate here. SUPERVISOR COCHRAN: In the bonding. HAROLD HAUPT: Is it also in that whole write up, the amount of equipment and everything, you are going to have sitting there? COUNCILWOMAN HUSSIE: The number of trucks, the number of people, everything is in here. SUPERVISOR COCHRAN: Hoagy, I know you worked for LILCO for many, many years, and are now retired. Please, come in, and we will have copies of this. I thought they had, but evidently they hadn't, because we had a couple of requests today, and you are more than welcome to have a copy of the report, and analyze it, and come back to us. I am not going to close the hearing.. HAROLD HAUPT: You talk about all these other districts, but just picture right here on the island, where you don't have things like you can get where they are talking about other areas, you lose one of these high lines here, forget about it. Right? If you got a generating station going what it is going to cost you to run that, that's why they don't run these portables, because it cost too much money. If you don't have the amount of equipment, and the people that handle these things, when you have a large storm, just like the ice storm upstate New York, they pulled people from all over the world almost to work up there, and they were still out of lights for almost a month, right? So, think what happens in your little district, when you don't have people. SUPERVISOR COCHRAN: I would appreciate if you would came in for a copy, because I am not going to close the hearing tonight. I am going to keep it open to allow for the continuation after the new printing, plus any written comments that anyone would like to submit, so perhaps after reading it. Bake? Bake is another one that used to be an employee of LILCO, and I am sure is concerned, as we are. No decisions are being made. LOU BAKER: Lou Baker of Southold. Are you just going to take over the distribution circuits. GARY VIGLIANTO: No, it is listed in the engineering report, but primarily our primary desire is to take over the local distribution. LOU BAKER: Are you going to take over the substations? GARY VIGLIANTO: It is required by the engineers. LOU BAKER: There are four of them in Southold. Are you going to take over all four? GARY VIGLIANTO: No. pg 18 - PH LOU BAKER: What happens to the others? GARY VIGLIANTO: They remain in LILCO, and they pay taxes on it? LOU BAKER: What about submarine cable to Shelter Island? GARY VIGLIANTO: Submarine cable to Shelter Island will be untouched. LOU BAKER: Southold has nothing to do with that? GARY VIGLIANTO: It all goes under the contract to do it. LOU BAKER: Which substation? GARY VIGLIANTO: I am sorry. I am not the engineer. It's in the report, you can take a look at it. LOU BAKER: If it is the Southold substation, which is the one that feeds Shelter Island, what do we do with Shelter Island? GARY VlGLIANTO: I will be very frank with you, I am not the engineer, but I will tell you it is provided for by the engineering department, and believe me, we are not going to leave Shelter Island without any lights. LOU BAKER: I don~t care one way or the other. How much management will there be? GARY VIGLIANTO: Do you mean administrative management? LOU BAKER: Southold Town, how many? GARY VICLIANTO: Salaries, and wages, about a million eight. COUNCILWOMAN HUSSlE: When you get this you can see that. LOU BAKER: How many people? SUPERVISOR COCHRAN: There's a chart. It is a breakdown. LOU BAKER: What are going to do about a scoreboard, if lights go out at midnight, and everybody is calling you? Do you have a call board? GARY VICLIANTO: Yes, it is all provided for. It is operated just like any utility. LOU BAKER: A lot of people holler because they can't get to LILCO, and if nobody is in town. GARY VIGLIANTO: That is one critical difference. In Southold you are a dedicated work force. It will be a lot easier than calling Hauppauge. You can have a dedicated work force devoted, and contracted to this community, and if you go to outside contract, to an outside contractor, as you, guys like Johnson Control, some companies far bigger than LILCO itself, they pg 19 - PH will be performance bonded, so if they are not here they will be a real recourse for this community, something you don't have today with LILCO. LOU BAKER: Sounds good. You are going to have coordinator with New York Telephone to talk to them people all the time. Full time job. You got to have somebody to talk to the electric system operator for LILCO, if you want to do anything around the substation. You will have to hire somebody to do that. I don't know if that is in the chart or not. Of course, all your trucks and cars. HAROLD HAUPT: Don't forget meter readers. GARY VIGLIANTO: That's true. As a systems don't have meter readers, but I that section. matter of fact some of the new don't think we are jumping into LOU BAKER: A lot of money is going to be spent on poles, and wires, and transformers, and stuff. GARY VIGLIANTO: Upgraded systems possibly going underground. As you know in a community owned utility, those decisions will be made by the public, not by the Board. It will be made by the people here, and every year when virtually every decision is made is open to some sunshine regulation. There is no closed room deals. There are no stockholders deals. There is no upper management deals. There won't be. It's a public utility, and you are invited to come in and investigate, and look at every financial document in that company. That is the difference between a public utility. That's why nationally public utilities are cheaper by far, than investor owned utilities, because the people themselves own it, and their rates as far as liability nationwide, five of the top ten most highly rated utility for reliability. LOU BAKER: Every day working basis, I think, it looks too good. GARY VIGLIANTO: That is why we suggest you go to a large professional company to do it for several years, and then work your way into it softly. Frankly today LILCO hires out a huge amount of their work to other companies. These are the companies that will be bidding for this community, companies that are in the utility business currently working for LILCO. Those are the companies that will be performing for this community, if you decide to go forward. SUPERVISOR COCHRAN: Anyone else like to address the Board? Mr. Homan? JIM HOMAN: Supervisor, Town Board, my name is Jim Homan from Cutchogue. I am one of the largest supporters of LILCO in the community, I think. I know all about the rates, and so on and so forth. This has been a serious matter, serious work done on it, and it has been done in a most responsible manner. Thanks to Mrs. Hussie. I think she has done a fine job. This is something that really everybody in Southold Town would benefit greatly from. Of course, my interest is perhaps as a businessman at this moment, but you know paying LILCO $150,000 a year is no piece of cake, especially when you generate your own electricity to heat to keep the pg 20 - PH rate down, so this is a very, very serious thing for all the people in town If anybody in this room has kept up with the national papers, the Wall Street Journal, New York Times, and everybody else has been talking about this deregulation. They know this is not a fairy tale. It's out there, and if Southold can make use of it I think they would be very foolish not to at least look into that opportunity. Thank you. SUPERVISOR COCHRAN: Thank you, Jim. Anyone else like to address the Town Board? As I said we will keep the hearing open to allow for written comments, and to invite you back. Yes, ma'am? Then I will come back to you, sire DONNA DZUGA-SMITH: My name is Donna Dzuga-Smith. First of all, I commend you for looking into it. I think it is a great idea. I think we have to have more faith in ourselves, that we can function better. I mean, it's beautiful here. I have only been here for four or five years. It's beautiful. Believe in yourselves. It is one of the best places to live. I have two little questions. Number one, do we have to pay for that booklet if you want to take it out? COUNCILWOMAN HUSSIE: I don't think so. SUPERVISOR COCHRAN: No. Usually we charge a quarter a sheet. I believe the last time this was discussed a copy of this was supposed to be put in each library. I can check on that. We have reams and reams, and a lot of coping to do if made 3,000 copies for everybody in town, but if we can put them at strategic places. We will put some here, borrow them, sign them out. We will put them in libraries, so you can sign them out. DONNA DZUGAS-SMITH: That is my concern, and then people will be more informed. I hope you stick with it. JIM HOMAN: Just one more remark. If you remember about twenty-five years ago we did a little transaction with LILCO. We took over their street lights. We bonded the town for $50,000. About twelve years ago, just about twelve years ago, I did some figuring on that, and at that point in time besides our expenses, the town expenses, we had saved between $1~50,000 and $500,000 on s $50,000 bond. SUPERVISOR COCHRAN: Jim is a past Supervisor of Southold Town, and served us well, in fact, this lovely, I guess you would call just a post stand came from Southwold, England, and it was given to the town by our past Supervisor, so, Jim is familiar with the workings of the Board, and we certainly appreciate your comments. Anyone else? WILLIAM ENGLIS: The work deregulation comes up all the time. It is not a panacea. If you have been following the press in the last few weeks you will realize that a lot of states are having problems with it already, particularly California. They started deregulation, and it ain't working. Now, this is mainly in regard to telephone use, but also electric utilities in various states where they have started in early with deregulation. It ain't working. It is not a panacea. pg 21 - PH GARY VIGLIANTO: Let me clarify what has been brought up. What is being tried in these other states is retail wheeling. We are not involved in that. The Federal regulations we are operating under pertain to wholesale transactions. What you see in California, and New Hampshire, and other state is strictly retail, and hopefully we will be outside of that getting much better rate reductions. We won't be in that arena of Federal regulations at all. We are operating as a wholesaler, as a genuine utility. SUPERVISOR COCHRAN: Thank you, Gary. Frank? FRANK CARLIN: One question, you mentioned before possibility of generating our own electricity. Where would generator system from? How would you do this? about maybe you get your GARY VIGLIANTO: Generators are looked at as part of the study, but certainly nothing will go forward without bidding it out. What we would do is look for a location within the town community. Generally we look at areas like closed dumps, and areas that are fairly well sterilized for our use. Then we invite large contractors, companies that currently operate. One would certainly be a company llke Duke Energy, one of the largest utilities in America, who has currently 2,000,000 megawatts a year. They generate a huge amount to communities, and they would come in, and say, they would look at the site, and make a proposal to the community. Generally, what that proposal would look like or we would hope it would look like is that we will come in, build a generator, stamp a generator, operate the generator, sell electricity for the next fifteen years at $.05 a kilowatt, and they will be bonded to that, and we will be set at that point for quite a long time. We don't know if that is a viable option yet. It is a lot different than it was two years ago. They have high speed turbine generators. They have air ejection generators, that are much more economical, quieter, fuel efficient, and very clean, very clean generation. It would have to meet all the criteria. FRANK CARLIN: It adds to the $L~7,000,0007 GARY VIGLIANTO: No, absolutely not. By the way this bond is a bullet proof bond. Another penny can not..if it came out to $~7,800,001, we would not be able to go forward. It is absolutely the final price that you can pay, so, no, we would not go outside that price. FRANK CARLIN: This company, who would be control of it, the Town Hall? GARY VIGLIANTO: The Town Municipal Utility, we would have a Municipal Utility Board created, so it is created by the Town Board. FRANK CARLIN: It is appointed, right? GARY VIGLIANTO: It's appointed, but it could become an elected board if the community chooses. FRANK CARLIN: Elected board. GARY VIGLIANTO: Whatever the community wants. You own it. You own the system. pg 22 - PH FRANK CARLIN: We can say anything we want? We can come up and complain about anything we want? GARY VIGLIANTO: You certainly can. As you know you certainly can at a public forum come up, and complain about anything you want. You vote on everything. The Board will meet, and you make an appointment. It is all community based. FRANK CARLIN: That is the same as LIPA. GARY VIGLIANTO: No, it is not. Let me explain something quickly. You brought up LIPA twice. LIPA is not giving anyone the right to vote, and that is a big difference. That is a serious difference. SUPERVISOR COCHRAN: Last call. We will be having another public hearing. I just spoke with our Town Attorney, and he thinks it is a better idea that we close the hearing this evening, because we have to reprint the law with the changes the Town Board made today. So, we will set another public hearing, and please, all come back, and see us a second time, and by then perhaps you would have time to read the report, and again, any question you have you can call Gary. GARY VIGLIANTO: We have an 800 number, and a local number on Long Island. Call our firm, and we will get back to you, any questions at all. SUPERVISOR COCHRAN: Is there anyone else that would like to speak to the Board? I don't want to not allow anyone to speak, but I would like to move this along, if I can. We have two more public hearings. I will close this hearing, and we will go to the next hearing. Ehzabeth A. Neville Southold Town Clerk LEGAL NOTICE NOTICE OE PUBLIC · N HEARIN(, O UOCAL LAW g._~.e PUBLIC NOTICE IS HEREBY GIVEN that there has been presented to the Town Board of thc Town of Southold, Suffolk County, New York, on the 31st day of March, 1998, a Local Law entitled, "A Local Law in Relation to Creating a Municipal Utility in the Town of Southold," pursuant to Sec- tion 360 of the General Law of the State of New York. NOT1CE IS FURTHER GIVEN that the Town Board of the Town of Southold will hdld a public hearing on the aforesaid Local Law at the Southold Town Hall, 53095 Main Road, Southold, New York, on the 281h day of April, 1998, at 8:00 p.m., at which time all interested persons will be given an oppor- tunity to be heard. This proposed "Local Law in Relation to Creating a Munici- pal Utility in the Town of Southold," reads as follows: TOWN OF SOUTHOLD LOCAL LAW NO. OF THE YEAR 1998 A LOCAL LAW CREAT- ~NG THE TOWN OF SOUTtlOLD MUNICIPAL ELEC FRIC UTILITY~ BE IT ENACTED, BY THE TOWN BOARD OF THE TOVVN OF SOUTHOLD AS FOEEOWS: Section 1; Title, Purpose and Definitions. I. 1 (Al Enactment. Pursuant to Section I 0 of the Home Rule Law~ and Section 360 of thc General Municipal Law. the Towh of Southold, County of Suftblk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utilitv. 1. ] (B) Effective Date. The local law shall take ef- fect on the filing of the approved Local Law with the Secretary of State of New York, which shall be within twenty (20) days after its approval by a simple major- it3,- of the voters by mandatory referendum at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. 1.2 Intent WHEREAS the Town of Southold is a Town duly formed under the laws of the State of New York, and; WHEREAS the Town Board of the Town of Southold is duly empowered pursuant to Section 360 of the General Municipal Law of the State of New York to form a Municipal Electric Utility fbr the Town, and; WHEREAS it is essential for the well-being, livelihood and safety of the residents and busi- nesses of the Town, and of the other consumers of electric power in the Town, including the Town itself, and of their fami- lies and guests, for the economic climate of the Town, and for the protection of private and public property within the Town and the value of that property, that the st}pply and distribution of elec- meaty to the residents, businesses and other consumers of electric power in the Town, and the Town itself, be provided in a re- liable manner, and at a fair and reasonable cost, and; WHEREAS the Town Board has determined that the most re- liable, fair, and economical way for the supply of electricity and electrical service to be provided to the Town of Southold, its rest- dents and businesses and insti- tutions, is by the creation of thc I'own of Southold Municipal Electric Utility, the Town Board of the Town of Southold hereby enacts this local law fi~r the in- tent and purpose of establishing a Municipal Electric Utility pur- suant to Section 360 of the Gen- eral Municipal Law, and all of the power and duties thereunder. Section 2; Equipment and Fa- cilities, Maintenance and Ser- vice, and Supply. The Town of Southold Mu- nicipal Electric Utility shall ac- quire the necessary equipment and facilities, and either estab- lish necessary functions for or procure contracts for the main- tenance, service and billing of the electrical energy system and utility, and a supply of electric- ity such as are necessary'flor the creation of the Southold Munici- pal Electric Utility. The proposed method of con- structing, leasing, pumhasing, or acquiring, the equipment and fa- cilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of fur- nishing such service, and the method of obtaining electrical supply shall be as follows: 2. I Equipment and Facilities. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condem- nation the electrical distribution system within the boundaries of the town cmTently owned by the Long Island Lighting Company ("LILCO"), and purchase, con- demnation or agreement for the use of the equipment of the Fish- ers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the LILCO system. The Town of Southold Mu- nicipal Electric Utility also may construct its own generating fa- cilities to supply electrical c, ergy to its customers and, in its discretion, may construct new !nfrastructure instead of acquir- ing property. B. The maximum and esti- mated cost of the items set/brth in subparagraph A. hereoL should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisitkm of the equipment, facilities, and distribution system, and any other costs that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issu- mice ora bond by the Town fnr the useful life of the equipment and facilities, and the longest maturity possible, which is ex- pected to be thirty (30) years. D. The entire costs of the ac- quisition, construction, develop- ment, implementation and opera- tion of the Town of Southold Municipal Electric Utility in- cluding the debt service of any financing that is created in order to pay the costs thereof, includ- ing the long term bond that is described herein, as well as any other costs of the Southold Mu- nicipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any effect on the general budget or real estate taxes of the Town. 2.2. Service and Maintenance of Equipment, Facilities, and Distribution System. A. The Town of Southold Municipal Electric Utility will obtain scl", icc and maintenance for the intYastructure of the Mu- nicipal Electric UtiliL,. and bill- lng and management services by obtaining contracts with suitable m~d acceptable maintenance~ ser- vice and billing companies. The contracts will be supported wher- ever possible by a perlbrmance bond of an amount acceptable to the Town. B. The Town will also con- sider and retain the ability and power to create its own mainte- nance and service and billing de- partment, including the equip- ment, materials, and supplies re- quired for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Town deems it to be in its best interests to do so. 2.3. Electrical Supply. A. The Town of Southold Municipal Electric Utility will obtain its supply of electricity either by contracting with a util- ity or supplier, or by generating its own electricity, or a combi- nation thereofi 3.0. Mandatory Referendum. OLK This Local Law shall be sub- ject to approval by a mandatory ~x,x ss: referendum of the residents of the Town of Southold, to be con- ducted at an Election or Special being duly sworn, says that Election pursuant to and as set I Coordinator, of the TRAV- Ibrth in Section 360 of the Gen- eral Municipal Law of the State a public newspaper printed of New York~ the Election Law Ik County; and that the no- and Town Law of the State of nnexed is a printed copy, New York. The Town of Southold Mu- 'in said Traveler Watchman nicipal Electric Utility shall be effective and granted the full / powers entitled to it by law on / the date of the approval by a ................................... weeks simple majority of the referen- dum, and the filing of the Local _~ncing on tt,e.., ............... ~.. LawwiththeSecretary°fState ~i of New York. BY ORDER OF THE ' '] 9... '[OWN BOARD OF THE TOWN OF SOUTHOLD. SOUTHOt. D, NEW YORK Dated: March 31, 1998 ELIZABEIH A. NEVILLE, SOUTHOLD TOWN CLERK th;~ ! da" of I X-4/9/98(98) , Notary Public BARBARA A. SCHNEIDER ~tOIARY PUBUC, State et New York No. 4806846 Qualified in Suffolk Cou_n~/ L LEGAL NOTICE NOTICE OF PUBLIC HEARING ON LOCAL LAW PUBLIC NOTICE IS HEREBY GIVEN that there has been presented to the Town Board of the Town of Southold, Suffolk County, New York, on the 31st day of March 1998, a Local Law entitled "A Local Law in Relation to Creating A Municipal Utility in the Town of Southold", pursuant to Section 360 of the General Law of the State of New York. NOTICE IS FURTHER GIVEN that the Town Board of the Town of Southold will hold a public hearing on the aforesaid Local Law at the Southold Town Hall, 53095 Main Road, Southold, New York, on the 28th day of April, 1998. at 8:00 P.M., at which time all interested persons will be given an opportunity to be heard. This proposed "Local Law in Relation to Creating A Municipal Utility in the Town of Southold, reads as follows: TOWN OP 8CO, HOLD LOCAL LAW NO. OF THE YEAR 1998 A LOCAL LAW CREATING THE TOWN OF SOUTHOLD MUNICIPAL ELECTRIC UTILITY. BE IT ENACTED BY THE TOWN BOARD OF THE TOWN OF SOUTHOLD AS FOLLOWS: i~eo~on 1~ T~tle. PurPose and Daf~n~tione. ~ 1.1(a). Enactment. Pursuant to Section 10 of ~he Home Rule Law, and Section 360 of the General Municipal Law, the Town of Southold, County of Suffolk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utility. ~. 1.1(B). Effeative Date. The local law ehall take effect on the filing of the approved Local Law with the Secretary of State of New York, which shall be within twenty (20) days after its approval by a simple majority of the votere by man~atory referendu~ at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. WHEREAS the Town of southold is a Town duly formed under the laws of the state of New York, and; WHEP~EAS the Town Board of the Town of Southold is duly empowered pursuant to section 360 of the Gener&l Municipal Law of the State of NeW York to form a Municipal Electric Utility for the Tolm~., and/ WHEREAS it is essential for the well-being, livelihoocl and safety of the residents and businesses of the Town, and of the other consumers of electric power in the Town, including the Town itself, and of their families and guests, for the economic climate of the Town, and for the protection of private and public property within the Town and the value of that property, that the supply and distribution of electricity to the residents; businesses and other consumers of electric power in the TOWn, and the Town itself, be provided in a reliable manner, and at a fair and reasonable cost, and; W~EREAS the Town Board has determined that the most reliable, fair, and economical way for the supply of electricity and electrical service =o be provided to the Town of Southold, its residents and businesses and institutions, is by the creation o~ the Town of Southold Municipal Electric Utility, the Town Board of the Town of Southold hereby enacts this local law for the intent and purpose of establishing a Municipal Electric Utility pursuant to Section 360 of the General Municipal Law, and all of the powers and duties thereunder. Section 2.; F4~il~nemt and F&cilities, ~(aintenance end SoL~P*Aoo. end Supply The Town of Southold Kunicipal Rlectric Utility shall acquir~ the necessary equipment and facilities, and either establish necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of elect~icity such as are necessary for the creatio2 of the Southold Municipal Electric Utility. The proposed method of constructing, leasing, purchasing, or acquiring, the equipment and facilities for the municipal electri utility, together with both the maximum and the estimated costs the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: 2.~. E=uiDment and A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boundaries Of the Town currently owned by the Long Island Lighting Company ("Lilco"), and purchase, condemnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the Lil¢o system. The Town of Southold Municipal Electric Utility also may construct its own generating facilities to supply electrical energy to its customers and, in its discretion, may construct new infrastructure instead of acquiring property. B. The maximum end estimated cost of the items set forth in subparagraph A. hereof, should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisition of the equipment, facilities, and distribution system, and any other costm that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issuance of a bond by the Town for the useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs of the acquisition, construction, development, implementation and operation of the Town of Southold Municipal Electric Utility including the debt service of any financing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other costs cf the SQuthold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any effect on the general budget or real estate taxes of the Tow~. 2.2. Service and aaintenanoe of F~uipment, Fasil~t~es. end Dist=ibution 8vo~em. A. The Tow~ of Southold Municipal Electric Utility will obtain service and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable and acceptable maintenance, ~,service and billing companies. The contracts will be supported .wherever possible by a performance bond of an amount acceptable to the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service and billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of southold Municipal Electric Utility if the ToWn deems it to be in its best interests to do so. 2.s. Electrics1 BU~pi~. A. The Town of Southold Municipal Electric Utility will obtain its supply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof. 3.0. Mandatory Referendum. This Local Law shall be subject to approva! by a mandatory referendu~ of the residents of the Town of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. The Town of Southold Municipal Electric Utility shall be effective and granted the full powers entitled to it by law on the date of the agproval by a simple majority of the referendum, and I the filing of the Local Law with the Secretary of State of New York. BY ORDER OF THE TOWN BOARD OF THE TOWN OF SOUTHOLD, SOUTHOLD. NEW YORK, Dated: March 31, 1998 ELIZABETH A. NEVILLE SOUTHOLD TOWN CLERK PLEASE PUBLISH ON APRIL 9, 1998, AND FORWARD ONE (1) AFFIDAVIT OF PUBLICATION TO ELIZABETH NEVILLE, TOWN CLERK, TOWN HALL, PO BOX 1179, SOUTHOLD, NY 11971 Copies to the following: The Traveler Watchman Town Board Members Town Attorney Town Clerk's Bulletin Board STATE OF NEW YORK) SS: COUNTY OF SUFFOLK) ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, New York being duly sworn, says that on the 7th day of April 1998 she affixed a notice of which the annexed printed notice is a true copy, in a proper and substantial manner, in a most public place ~n the Town of Southold, Suffolk County, New York, to wit: Town Clerk's Bulletin Board, Southold Town Hall, 53095 Main Road, Southold, New York. Notice of Public Hearing on "A Local Law in Relation to Creating A Municipal Utility in the Town of Southold". VElizabeth A. ~Neville Southold Town Clerk Sworn to before me this 7th day of April 1998. Ap~ 03 ~8 O~:3Ba 3osep~ ~. Prokop 51B?E 1~3 RECEIVED APR 1995 Slauthold Town ~er~ POWER ALTERNATIVES, INC. 175 ROUTE 25A East Setauket, NY 11733 (516} 751-7595 COMPANY: FAX NUMBER: FROM: COMPANY: FAX NUMBER: COMMENTS: DATE: April 3, 1998 NUMBER OF PAGES TO FOLLOW (including oover sheet): PLEASE DELIVER THE FOLLOWING TO: NAME: Laury L. Dowd, Esq., Town Attorney Betty Neville, Town Clerk Town of Southold (516) 765--1823 Joseph W. Prokop, Esq. V.P. Power Alternatives, Inc. (516) 751-7123 Enclosed are the notices and revised local laws. with any questions. Thank you for your consideration. $inoerely, Joseph W. Prokop, Esq. TINE: 9:30 am 15 Please call me Rpr 03 SB O~:3~a ~o~ep' W. Prokop 51675 1~3 p.~ TO~NOF ~OUTHOLD NOT~CE OF PUBLZC HF~IN~ A5 TO hOCAI, LAW PLEASE TAKE NOTICE THAT THE TOWN BOARD OF THE ToWN OF SOUTHOLD will conduct a public hearing on April 28, 1998, at 8:00 p.m., for the purpose receiving comment and considering for voting and adoption a Local Law of 1998, which proposed Local Law of 1998 is entitled as follows: Local Law No. Of 1998, of the Town of Southold, a Local Law Establishing the--~own of Southold Municipal Electric Utility, Pursuant to Section 360 of the General Municipal Law of the State of New York. The purpose and summary of this proposed Local Law of 1998, being and is to establish a Town of Southold Municipal Electric Utility pursuant to Section 360 of the General Municipal Law for the Town of Southold. PLEASE TAKE FI~THER NOTICE that the public bearing will be conducted at the Town Hall of the Town of Southold, located at 53095 Main Road, Southold, New York, and will commence at 8:00 p.m. on April 28, 1998, at which time any public cogent regarding the proposed Local Law of 1998 will be heard, and ~t the close of Dated: Town of Southold Suffolk county, New York TONN OF 80UTHOLD LOCAL LAW NO. OF THE YEAR 1998 A LOCAL LAW CREATING THE TOWN OF SOUTHOLD MUNICIPAL ELECTRIC UTILITY. BE IT ENACTED BY THE TOWN BOARD OF THE TOWN OF SOUTHOLD AS FOLLOWS: Seeti~n 1~ Title. P~z~oee an4 Definitions. Pursuant to Section 10 of the Home Rule Law, and section 360 of the General Municipal Law, the Town of Southold, County of Suffolk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utility. 1.1(B}. Effe~tive Date. The local law shall take effect on the filing of the approved Local Law with the Secretary of State of New York, which shall be within twenty (20) days after its approval by a simple majority of the voters by mandatory referendu~ at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. X.2. Intent. WHEREAS the Town of Southold is a Town duly formed under the laws of the State of New York, and; WHEREAS the Town Board of the Town of Southold is duly empowered pursuant to Section 360 of the General Municipal Law of 8pp 03 88 08:37a Josep~ ~d. Ppokop 51675 1~3 p.5 necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of electricity such as are necessary for the creation of the Southold Municipal Electric Utility. The proposed method of constructing, leasing, purchasing, or acquiring, the equipment and facilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: 2.1. E~uimment and Facilities. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boundaries of the Town currently owned by the Long Island Lighting Company ("Lilco"), and purchase, condemnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the Lilco system. The Town of Southold Municipal Electric Utility also may construct its own generating facilities to supply electrical energy to its customers and, in its discretion, may construct new infrastructure instead of acquiring property. B. The maximum and estimated cost of the items set forth in subparagraph A. hereof, should be forty-seven million one hundred Page 3 ~ 03 S8 O~:37a ~o~ep~ ~. P~oko~ 51S75 thousand dollars ($47,100,000). C. The cost of the acquisition of the equipment, facilities, and distribution system, an0 any other costs that are necessary for the implementation of the Town of $ou~hold MuniclFal Electric Utility shall be paid by the issuance of a bond by the Town for the useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs cf the acquisitien, construction, development, implementation and operation of the Town of $outhold Municipal Electric Utility including the dsbt service of any financing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other co~ts of the Southold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any e£feot on the general budget or real estate taxes of the Town. 2.2. 8ervi~e and ~n~en~oe of F~u~pment, Faailities. and DistEibution SYstem. A. The Town of $outhold Municipal Electric Utility will obtain service and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable and acceptable maintenance, service and billing companies. The contracts will be supported wherever ~ossible by a performance bond of an amount acceptable to Page 4 Rp~ 03 98 09:37a Josep~ 'd. Prokop S1675 123 the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service end billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Tovrn deems it to be in its best interests to do so. 2.3. Ele~trlo&l BuDply. A. The Town of Southold Municipal Electric Utility will obtain ire ~upply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof. 3.0. Mandatorv Referendu~. This Local Law ehall be subject to approval by a mandatory referendum of the residents of the Town of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. The Town of Southold Municipal Electric Utility shall be effective and granted the full powers entitled to it by law on the date of the approval by a simple majority of the referendum, and the filing of the Local Law with the Secretary of State of New York. Page 5 ~p~ 03 ~8 08:38a Josep' ~. Ppo~op 51G?~ 1~3 p.8 Dated: April 3, 1998 Town of southold suffolk county, New york Page 6 ELIZABETH A. NEV/LLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-1823 Telephone (516) 765-1800 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS DULY ADOPTED BY THE SOUTHOLO TOWN BOARD AT A REGULAR MEETING HELD ON MARCH 31. 1998: WHEREAS. there has been presented to the Town Board of the Town of Southold, on the 31st day of March, 1998, A LOCAL LAW, entitled "A Local Law in Relation to Creating A Municipal Electric Utility in the Town of Southold; now therefore, be it RESOLVED that the Town Board of the Town of Southold hereby sets 8:00 P.M., Tuesday, April 28, 1998, Southold Town Hall, 53095 Main Road, Southold, New York as the time and place for a public hearing upon this Local Law, which reads as follows: LOCAL LAW NO. - 1998 A Local Law in Relation to the Creation of a Municipal Electric Utility in the Town of Southold BE IT ENACTED. the Town Board of the Town of Southold as follows: Seo~on 1~ Title, pUL'Dose and De£~ni~ons. 1.1(~)o Enactment. Pursuant to Section 10 of the Home Rule Law, and Section 360 of the General Municipal Law, the Town of Southold, County of Suffolk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utility. 1.1(B). Effeotive Date. The local law shall take effect on the filing of the approved Local Law with the Secretary of State of New York, whioh shall be within five (5) days after its approval by a simple majority of the voters by mandatory referendum at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. 1.2. Intent. WHEREAS the Town of Southold is a Town duly formed under the laws of the State of New York, and; WHEREAS the Town Board of the Town of Southold is duly' empowered pursuant to Section 360 of the General Municipal Law of the State'of New York to form a Municipal Electric Utility for the Town, and; WHEREAS it is essential for the well-being, livelihood and safety of the residents and businesses of the Town, and of the other consumers of electric power in the Town, including the Town itself, and of their families and guests, for the economic climate of the Town, and for the protection of private and public property within the Town and the value of that property, that the supply and distribution of electricity to the residents, businesses and other consumers of electric power in the Town, and the Town itself, be provided in a reliable manner, and at a fair and reasonable cost, and; WHEREAS the Town.Board has determined that the most reliable, fair, and economical way for the supply of electricity and electrical service to be provided to the Town of Southold, its residents and businesses and institutions, is by the creation of the Town of Southold Municipal Electric Utility, the Town Board of the Town of southold hereby enact this local law for the intent and purpose of establishing a Municipal Electric Utility pursuant to Section 360 of the General Municipal Law, and all of the powers and duties thereunder. section 2.;Eq~pment and Facilities, Mainten&noe ~nd Bervioe, and Supply The Town of Southold Municipal Electric Utility shall acquire the necessary equ~,~tand facilities, and either establish necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of electricity such as are necessary for the creation of the Southold Municipal Electric utility. The proposed method of constructing, leasing, purchasing, or acquiring, the eq~a~dfacilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: 2.1. F~ and Facilities. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boundaries of the Town currently owned by the Long Island Lighting Corporation ("Lilco"), and purchase, condemnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the Lilco system. The Town of Southold Municipal Electric Utility also may construct its own generating facilities to supply electrical energy to its customers and, in its discretion, may construct new infrastructure instead of acquiring Lilco property. E. The maximum and estimated cost of the items set forth in subparagraph A. hereof, should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisition of theeq~.facilities, distribution system and any other costs that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issuance of a bond by the Town for the useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs of the acquisition, construction, development, implementation and operation of the Town of Southold Municipal Electric Utility including the debt service of any financing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other costs of the Southold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any effect on the general budget or real estate taxes of the Town. 2.2. Bervice and Maintenance of Equipment Facilities, and Distribution SYstem. A. The Town of Southold Municipal Electric Utility will obtain service and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable and acceptable maintenance, service and billing companies. The contracts will be supported wherever possible by a performance bond of an amount acceptable to the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service and billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Town deems it to be in its best interests to do so. 2.3. Eleotrioal BuDpl~. A. The Town of Southold Municipal Electric Utility will obtain its supply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof. 3.0. Mandatory Referendum. This Local Law shall be subject to approval by a mandatory referendum of the residents of the Town of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. The Town of Southold Municipal Electric Utility shall be effective and granted the full powers entitled to it by law on the date of the approval by a simple majority of the referendum, and the filing of the Local Law with the Secretary of State of New York. Dated: March 31, ,1998 Town of Southold Suffolk County, New York Southold Town Clerk March 31. 1998 ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-1823 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOVv'N OF SOUTHOLD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS DULY ADOPTED BY THE SOUTHOLD TOWN BOARD AT A REGULAR MEETING HELD ON MARCH 31, 1998: WHEREAS. there has been presented to the Town Board of the Town of Southold, on the 31st day of March, 1998, A LOCAL LAW, entitled "A Local Law in Relatlon to Creating A Municipal Electric Utility in the Town of Southold; now therefore, be ~t RESOLVED that the Town Board of the Town of Southold hereby sets 8:00 P.M., Tuesday, April 28, 1998, Southold Town Hall, 53095 Main Road, Southold, New York as the time and place for a public hearing upon this Local Law, which reads as follows: LOCAL LAW NO. - 1998 A Local Law in Relation to the Creation of a Municipal Electric Utility in the Town of Southeld BE IT ENACTED, the Town Board of the Town of Southold as follows: Sec2~on ~ Title, PurPose and Definitions. Pursuant to Section 10 of the Home Rule Law, and Section 360 of the General Municipal Law, the Town of Southold, County of Suffolk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utility. 1.1(B). Effective Date. The local law shall take effect on the filing of the approved Local Law with the Secretary of State of New York, which shall be within five (5) days after its approval by a simple majority of the voters by mandatory referendum at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. 1.2. Intent. WHEREAS the Town of Southold is a Town duly formed under the laws of the State of New York, and; WHEREAS the Town Board of the Town of Southold is duly' empowered pursuant to Section 360 of the General Municipal Law of the State of New York to form a Municipal Electric Utility for the Town, and; WHEREAS it is essential for the well-being, livelihood and safety of the residents and businesses of the Town, and of the other consumers of electric power in the Town, including the Town itself, and of their families and guests, for the economic climate of the Town, and for the protection of private and public Property within the Town and the value of that property, that the supply and distribution of electricity to the residents, businesses and other consumers of electric power in the Town, and the Town itself, be provided in a reliable manner, and at a fair and reasonable cost, and; WHEREAS the Town Board has determined that the most reliable, fair, and economical way for the supply of electricity and electrical service to be provided to the Town of Southold, its residents and businesses and institutions, is by the creation of the Town of Southold Municipal Electric Utility, the Town Board of the Town of Southold hereby enact this local law for the intent and purpose of establishing a Municipal Electric Utility pursuant to Section 360 of the General Municipal Law, and all of the powers and duties thereunder. Section 2.;F~cluipment and Facilities, Mainten&noe and Serv~oe. and SUDDly The Town of Southold Municipal Electric Utility shall acquire the necessary e~and facilities, and either establish necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of electricity such as are necessary for the creation of the Southold Municipal Electric Utility. The proposed method of constructing, leasing, purchasing, or acquiring, the eq~a~dfacilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: 2.1. F~ and Facilities. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boundaries of the Town currently owned by the Long Island Lighting Corporation ("Lilco"), and purchase, condemnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the Lilco system. The Town of Southold Municipal Electric Utility also may construct its own generating facilities to supply electrical energy to its customers and, in its discretion, may construct new infrastructure instead of acquiring Lilco property. B. The maximum and estimated cost of the items set forth in subparagraph A. hereof, should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisition of thee~.facilities, distribution system and any other costs that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issuance of a bond by the Town for the useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs of the acquisition, construction, development, implementation and operation of the Town of Southold Municipal Electric Utility including the debt service of any financing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other costs of the Southold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any effect on the general budget or real estate taxes of the Town. 2.2. Service and Maintenance of Equipment Facilities, and Distribution System. A. The Town of Southold Municipal Electric Utility will obtain service and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable and acceptable maintenance, service and billing companies. The contracts will be supported wherever possible by a performance bond of an amount acceptable to the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service and billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Town deems it to be in its best interests to do so. 2.3. Electrio&l Supply. A. The Town of Southold Municipal Electric Utility will obtain its supply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof. 3.0. Mandatory Referendum. This Local Law shall be subject to approval by a mandatory referendum of the residents of the Town of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. The Town of Southold Municipal Electric Utility shall be effective and granted the full Dowers entitled to it by law on the date of the approval by a simple majority of the referendum, and the filing of the Local Law with the Secretary of State of New York. Dated: March 3~, ,1998 Town of Southold Suffolk County, New York Southold Town Clerk March 31, 1998 WHEREAS, there was presented to the Town Board of the Town of Southold on the 31st day of March 1998, a Local Law entitled, "A Local Law in Relation to the Creation and Establishment of a Electric Municipal Utility"; and WflEREAS, a public hearing was held on this Local Law on the 28th day of April, 1998, at which time all interested persons were given an opportunity to be heard thereon, now. therefore, be it RESOLVED that the Town Board hereby enacts Local Law No. , which reads as follows: LOCAL L~W NO. - 1998 A Local Law in Relation to the Creation of a Municipal Electric Utility in the Town of Southold BE IT ENACTED. the Town Board of the Town of Southold as follows: Section ~ Title, Pu~ose and Def~n£tions. L.L(A) o Enaotme~2, Pursuant to Section 10 of the Bome Rule Law, and Section 360 of the General Municipal Law, the Town of Sou~hold, County of Suffolk and State of New York, hereby enacts this local law to create the Town of Southold Municipal Electric Utility. 1.1(BI, Ef:eot~ve Date. The local law shall take effect on the filing of the approved Local Law with the Secretary ef State of New York, which shall be within five (5) days after its approval by a simple majority of the voters by mandatory referendum at an election to be held to approve this local law, pursuant to Section 360 of the General Municipal Law. 1.2. Intent. WHEREAS the Town of Southold is a Town duly formed under the laws of the State of New York, and; WHEREAS the Town Board of the Town of Southold is duly empowered pursuant to Section 360 of the General Municipal Law of the State of New York to form a Municipal Eleotric Utility for the Town, and; WHEREAS it is essential for the well-being, livelihood and safety-of the residents and businesses of the Town, and of the other consumers of electric power in the Town, including the Town itself, and of their families and guests, for the economic climate of the Town, and for the protection of private and public ProPerty within the Town and the value of that property, that the supply and distribution of electricity to the residents, businesses and other consumers of electric power in the Town, and the Town itself, be provided in a reliable manner, and at a fair and reasonable cost, and; WHEREAS the Town.8oard has determined that the most reliable, fair, and economical way for the supply of electricity and eleotrical serwioe to be provided to the Town of Southold, its residents and businesses and institutions, is by the creation of the Town of Southold Municipal Electric Utility, the Town Board of the Town of Southold hereby enact this local law for the intent and purpose of establishing a Municipal Electric Utility pursuant to Section 360 of the General Municipal Law, and all of the powers and duties thereunder. Beotion 2.;Eq~pment ~n~ Facilities, Maintenance and Service. and S~pDIy The Town of Southold Municipal Electric Utility shall acquire the necessary eq~pm~and facilities, and either establish necessary functions for or procure contracts for the maintenance, service and billing of the electrical energy system and utility, and a supply of electricity such as are necessary for the creation of the Southold Municipal Electric Utility. The proposed method of constructing, leasing, purchasing, or acquiring~ the eq~m~.~facilities for the municipal electric utility, together with both the maximum and the estimated costs thereof, the method of furnishing such service, and the method of obtaining electrical supply shall be as follows: 2.1.~.~nt end Fao~lities. A. The Town of Southold Municipal Electric Utility will obtain by purchase or condemnation the electrical distribution system within the boundaries of the Town currently owned by the Long Island Lighting Corporation ("Lilco"), and purchase, condemnation or agreement for the use of the equipment of the Fishers Island Electric Company, and will construct such additional infrastructure as may be needed to separate itself from the Lilco system. The Town of Southold Municipal Electric Utility also may construct its own generating facilities to supply electrical energy to its custOmers and, in its discretion, may construct new infrastructure instead of acquiring Lilco property. B. The maximum and estimated cost of the items set forth in subparagraph A. hereof, should be forty-seven million one hundred thousand dollars ($47,100,000). C. The cost of the acquisition of th~eq~pms~.facilities, distribution system and any other costs that are necessary for the implementation of the Town of Southold Municipal Electric Utility shall be paid by the issuance of a bond by the Town for the useful life of the equipment and facilities, and the longest maturity possible, which is expected to be thirty (30) years. D. The entire costs of the acquisition, construction, development, implementation and operation of the Town of Southold Municipal Electric Utility including the debt service of any financing that is created in order to pay the costs thereof, including the long term bond that is described herein, as well as any other costs of the Southold Municipal Electric Utility, will be paid in the first instance from the revenues generated by the Town of Southold Municipal Electric Utility, and will not have any effect on the general budget or real estate taxes of the Town. 2.2. 8ervioe and Maintenance of Equipment Facilities, and Distribution Bvstem. A. The Town of Southold Municipal Electric Utility will obtain service and maintenance for the infrastructure of the Municipal Electric Utility, and billing and management services by obtaining contracts with suitable and acceptable maintenance, service and billing companies. The contracts will be supported wherever possible by a performance bond of an amount acceptable to the Town. B. The Town will also consider and retain the ability and power to create its own maintenance and service and billing department, including the equipment, materials, and supplies required for that department, in order to provide service and maintenance to the Town of Southold Municipal Electric Utility if the Town deems it to be in its best interests to do so. ~.3. Electrical BuDplv. A. The Town of Southold Municipal Electric Utility will obtain its supply of electricity either by contracting with a utility or supplier, or by generating its own electricity, or a combination thereof. 3.0. Mandatory Referendum. This Local Law shall be subject to approval by a mandatory referendum of the residents of the Tow~ of Southold, to be conducted at an Election or Special Election pursuant to and as set forth in Section 360 of the General Municipal Law of the State of New York, the Election Law and Town Law of the State of New York. The Town of Southold Municipal Electric Utility shall be effective and granted the full powers entitled to it by law on the date of the approval by a simple majority of the referendum, and the filing of the Local Law with the Secretary of State of New York.