ML20094G226

Petitioner Notice of Lilco/Long Island Power Authority Exaggeration & of Commencement of State Court Action.* NRC Should Await Ny State Decision Re Matter within Special Jurisdiction.W/Certificate of Svc

ML20094G226
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	02/25/1992
From:	Mcgranery J DOW, LOHNES & ALBERTSON, SCIENTISTS & ENGINEERS FOR SECURE ENERGY, SHOREHAM-WADING RIVER CENTRAL SCHOOL DISTRICT, NY
To:	NRC COMMISSION (OCM)
Shared Package
ML20094G220	List: ML20094G212 ML20094G226
References
OLA-3, NUDOCS 9203020024
Download: ML20094G226 (8)

Text

6 y g

.4 e '

, v pcof@

UNITED STATES OF AMERICA 2 G NUCLEAR REGULATORY COMMISSION -

g '25 OM -

BEFORE THE COMMISSION ht CM

) /

\A 4 -

In the Matter of ) Docket No. 50-322 IA-3

)

LONG ISLAND LIGHTING COMPANY )

) (Application for (shoreham Nuclear Power Station, ) License Transfer)

Unit 1) )

)

PETITIONERS' HOTICE OF LILCO/LIPA EXAGGERATION AND OF COMMENCEMENT OF STATE COURT ACTIOl{

Petitioners Shoreham-Wading River Central School District (" School District") and Scler.tists and Engineers for Secure Energy, Inc. ("SE2 ") hereby give the Commission notice of the exaggeration by LILCO/LIPA of the impact for payments in lieu of taxes of the transfer of the license for the Shoreham Nuclear Power Station Unit 1 ("Shoreham") to LIPA and notice of the School District's commencement of an action in the New York State Supreme Court to confirm that LIPA automatically ceased to exist as a matter of law on January 15, 1992 pursuant to New York Public Authorities Law i 2828.

EXAGGERATION OF TAX IMPACT OF LICENSE TRANSPIB By letter of February 14, 1992 LILCO/LIPA informed the Commission that transfer of the Shoreham possession only license to LIPA by March 1, 1992 would avoid "an additional year of Shoreham tax payments, currently $82 million per year, of which

$29.2 million goes to SWRCSD". LILCO/LIPA joint letter at 2

g83588EAO!88)}ga I

o I -. - . - , - -. . - _ - . - . _ _ _ _. _ _ _ - _ _-

n (February 14, 1992). This was a gross exaggeration of the impact of the transfer.

The controlling section of the LIPA Act in How York Public Authorities Law I 1020-q, subd.1 which statest Each year after property theretofore owned by LILCO is acquired by the authority by any means authorized by this title.and, as a consequence, is removed from the tax rolls, the authority shall make payments in lieu of taxes to municipalities and school districts equal to the taxes and assessments which would have been received from year to year by each such jurisdiction if sucn acquisition had not occurred, except for such taxing jurisdictions which tax the Shoreham plant, in which caso the in lieu of tax payments shall in the first year after the acquisition be equal to one hundred percent of the taxes und assessments which would have been received by such taxing jurisdictions. In each succeeding year such in lieu of tax payments shall be decreased by ten porcent until such time as such tax payments equal taxes and assessments which would have been levied on such plant in a nonoperative state.

In order to appropriately calculate the in lieu of tax savings, if any, to LILco/LIPA as a result of the transfer one must first determine the assessed value of Shoreham "in a nonoperative state". That value is its value when Shoreham hold only a construction permit and before it received its initial f acility operating license NPF-36 on July 3, 1985. Soo 50 Tod.

Reg. 28129 (July 10, 1985). While Shoreham had only a construction permit (1192, was "in a nonoperative state"), its assessed value for 1985-86 was $146,134,908 determined as of the assessment date of June 1, 1985. That assessed value remained

.1 L. - -

. . - _ . ..__c_._._.--

the same until LILCO received its full power operating license on April 21, 1989. Egg 54 Fed. Reg. 18371 (April 1989).

On June 1, 1989, the assessed value of the $5.5 billion Shoreham plant with a full operating license was increased to

$156,579,980 for the 1989-90 tax year and has remained at that level since then. Thus, whenever license transfer would occur the assessed value of Shoreham for purposes of payments in lieu of taxes may decrease but would never drop below $146,134,980.

Addressing only the case of the School District and without mention of the payments in lieu of tax due the Town of Brookhaven or the County of Suffolk, Petitioners note that the applicable School District tax rate for 1990-91 was 18.32% of assessed value resulting in a levy of approximately $20.68 million, as LILCO and LIpA have recognized. If the same tax rate were applied to the assessed value of Shoreham in a " nonoperative state", the levy would be approximately $26.77 million or $1.9 million less than the levy on an operational Shoreham, llowever, for the tax year 1991-92, the School District tax rate has increased to 20.55% which would yield an in lieu of top payment levy of approximately $30.03 million on the assessed value of Shoreham "in a' nonoperative stahe" or about $1.35 million pore than taxes on Shoreham with a full power operating license for 1990-1991.

In short, the in lieu of tax payment savings alleged by LILCO/LIPA by early transfer of the license simply do not exist.

4-HOTICE OF Sci!OOL DISTRICT COMMENCEMENT OF STATE COURT ACTIOl{

The attached letter from School District New York State counsel is self-explanatory in informing me that the School District is commencing an action in How York State Court to confirm that LIPA ceased to exist as a natter of law on January 15, 1992 pursuant to Public Authorities Law $ 2828. The School District has asked that I infuta the NRC of this development.

In these circumstances, the School District respectfully submits that it would be arbitrary and capricious to issue an NRC license to an applicant that may soon be determined to be defunct by the New York State Courts. Well established judicial procedent demands that the Commission stay its hand in these circumstances and await the prompt decision of How York State on a matter within its special jurisdiction.

Respectfully submitted, February 25, 1992 _

w 1 fphes P. McGrahegf/Jr.

(DOW, 14HNES & ALDERTSON Suite 500 1255 Twenty-Third Street, N.W.

Washington, D.C. 20037 (202) 857-2929 Counsel for the Petitioners Shoreham-Wading River Central School District and Scientists and Engineers for Secure Energy, Inc.

, ,- -.n- - r,,, , . _ , . . . . , - - - . . - , . , , , _ _ . - , _ _

ecT

a. P.C. t" . 0 2 pr C D - 2 0 - 9 2 TUC 1 6 s .4 D L. C W 1 0 G R G tI R .

MN

' FW M , e YN y n/ w ll N AYHobas Av rwein Founwu str= lit, NHw Yopin tytuni 0814) 4%$ Ivilis gpg,,, M*""""

J . m u . . .. . . . , ran m. 46.. mon g ,, , , , , , , ,

Herwari iI ...rni povon.o . .

tYlueou con.w teceus . i u Krw nini l' ...i.

February 25, 1992 RY IAC4IMILE Janen P. McGranory, Jr.

Dow, LCENES & ALBERTSON 1255 Twenty-Third Street Washington, DC 20037-1194 Re Ternination of Long Island PCWer Authorityt obligation to Repay Appropriations to the State of New York Dear Mr. McGranaryt in your recent filing before the Nuclear Regulatory Commienion Ome) , entitled " Suggestion of Hootncas Due to the Long ind and Power Authority's Imminent Demise", you exposed the fundamental .tnd profound illegality of LIPA's acquisition of the Shorehan Nuclear Power Station (Shoreham) . In light of the Sunset Provisions or the LIPA Act and the Public Authorities Law, it is indeed incumbent upon LIPA to establish its continued existence by seeking recourse How York explicitly authorizes an in state court. In fact, applicable preen dura for such recourco -- the declaratory judgennt.

action.

With LIPA continuing to function, and no such declaratory judgment action forthcoming we have become increasingly disturbed by the flagrant illegality of the situation. LIPA has been terminated by operation of lav, yet continues to act purportedIy on the state's bohalf. Moreover, LIPA has never developed any snurce be of revenue to repay state appropriations, Instead, all continues LIPA of which must to spend repaid according to State 1&V.

taxpayer dollars as if further appropriations are a certainty, and as if repayment will never be mado.

The name considerations are shared by several state taxpayers, and we now believo it imperative to protect their interents through f ormal legal process. We have therefore resto)ved to cott=ence an action for declaratory and injunctive teller pursuant to Article 7-A of the State Finance Law. The action vill

- seek to have LIPA declared to be terminated as a matter of law, and f

TUK 10846 L CI 64 I O G M CZ E R , P.C. P.OD

, FED-20-02 t.

I James P. McGranery, Jr.

February 25, 1992 Page 2 to enjoin all continued apptcpriations to, and expendituren by, LIPA.

'ro brief you on the procedural side of this, we will comannee the action on Wednesday, February 26, 1992 and advise asa developments unfold. Of course you have explained the "tootneen lusue to the NRC, but since this, is entirely a matter of state law, l we request that you advise the ccmaission of the pendency or the action.

l Very truly yours, LEW ' &, ER, P.C.

.f, .

12WI$

v~

LL/ser s

t

, ,yf , ,+-#.-,,. - - r.-, , , , . . - - - -- . _ - . - . - - . , - _ - . - , - ,,m. _ - _ - -- - , - - , - . . , . - -

E

-b> $

2 M

- to UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION [E6 2b pg2

{ DC # $ dcu BEFORE Tl!E COMMIS$10H t#[Mno 3

(pg@ ,

In the Matter of ) Docket No. 50-322-OlA-3

)

14NG ISIAND LIGl! TING COMPANY )

) (Application for (Shoreham Nuclear Power Station, ) License Transfer)

Unit 1) )

)

CERTIFICATE OF DERVICE I hereby certify that copies of the Petitioners' Notice of LILCO/LIPA Exaggeration And Commencement of State Court Action in the above-captioned proceeding have been served on the following by hand, telecopy, or first-class mail, postage prepaid (as indicated below) on this 25th day of February, 1992:

Chairman Ivan Selin Commissioner Forrest J. Remick U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission one White Flint North One White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, Maryland 20852 Rockville, Maryland 20852 (Hand) (Hand)

Commissioner Kenneth C. Rogers Commissioner James R. Curtiss U.S. Iluclear Regulatory Commission U.S. Nuclear Regulatory Commission one White Flint North One White Flint North 11555 Rockville Pike 11555 Rockville Pike Rockville, Maryland 20852 Rockville, Maryland 20852 (Hand) (Hand)

Commissioner E. Gail de Planque Thomas S. Moore, Chairman U.S. Nuclear Regulatory Commission Administrative Judge One White Flint North Atomic Safety & Licensing Board 11555 Rockville Pike U.S. Nuclear Regulatory Commission Rockville, Maryland 20852 Washington, D.C. 20555 (Hand) (Mail) ,

Jerry R. Kline George A. Ferguson Administrative Judge Administrative Judge Atomic Safety & Licensing Board Atomic Safety & Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 5307 Al Jones Drive (Mail) Shady Side, Maryland 20764 (Mail) l .

l l

-s -

1 l

)

Edwin J. Reis, Esq. W. Taylor Revoley, III, Esq.

Mitti A. Young, Esq. Donald P. Irwin, Esq.

Office of the General Counsel Ilunton & Williams U.S. Nuclear Regulatory Commission Riverfront Plaza, East Tower j One White Flint North 951 East Byrd Street 11555 Rockville Pike Richmond, Virginia 23219-4074 Rockville, Maryland 20852 (Telecopy)

(Hand)

Samuel A. Cherniak, Esq. Carl R. Schenker, Jr. , Esq.

NYS Department of Law O'Melveny & Myers Bureau of Consumer Frauds 555 13th Street, N.W.

and Protection Washington, D.C. 20004 120 Broadway (Telecopy)

New York, New York 10271 (Telecopy)

Nicholas S. Reynolds, Esq. Stanley B. Klimberg, Esq.

David A. Repka, Esq. Executive Director &

Winston & Strawn General Counsel 1400 L Street, N.W. Long Island Power Authority Washington, D.C. 20005 200 Garden City Plaza, Suite 201 (Telecopy) Garden City, How York 11530 (Mail)

Charles E. Mullins, Esq.

Office of the General Counsel U.S. Nuclear Regulatory Commission one White Flint North 11555 Rockville Pike Rockville, Maryland 20852 (Hand)

-mu , -

JMen P. McGraneg/$r.

Nunsel for the Petitioners Shoreham-Wading River Central School District and Scientists and Engineers for Secure Energy, Inc.

.