A municipality located within the Long Island Lighting Company's former service area may not establish a public utility service to provide gas or electric power without the Long Island Power Authority's agreement. The Town would use this public utility service to purchase low cost electric power on the open market and distribute this power to the residential and commercial users in the Town of Southold.
Municipalities have broad authority to establish public utilities.
For such purpose, any municipal corporation may purchase gas or electrical energy from the state, or from any state agency, or other municipal corporation, or from any private or public corporation. The above provision must be applied taking into consideration LIPA's legislative authority. LIPA is empowered to transfer any of its assets to one or more municipal electric agencies established pursuant to Article 14-A of the General Municipal Law, for such consideration and upon such terms as LIPA may determine to be in the best interest of the electric ratepayers in the service area. The Attorney General has previously concluded that a municipality in the service area of LIPA may not condemn the transmission and distribution system, facilities and other assets of LIPA and use them to operate a municipal utility pursuant to Article 14-A of the General Municipal Law. Only LIPA is authorized to determine whether assets should be transferred and the terms and conditions of transfer.