Powering Long Island
Facts at a Glance UPDATED
Long-term Energy Resource Plan
Please browse the frequently asked questions below.
- What was the purpose of LIPA’s Request for Proposals to Provide Electric Capacity, Energy and Ancillary Services to the Long Island Power Authority (“RFP”)?
- What was the response to the issuance of the RFP?
- What were the criteria for evaluating the proposals?
- Which project(s) are being recommended to LIPA’s Board of Trustees?
- How does the RFP fit into LIPA’s Long-Term Energy Plan?
- What is the process going forward?
What was the purpose of LIPA’s Request for
Proposals to Provide Electric Capacity, Energy and Ancillary
Services to the Long Island Power Authority (“RFP”)?
LIPA’s 2010-2020 Electric Resource Plan (the “Resource Plan”) identified a need to secure additional electric resources to help LIPA meet its projected generation requirements, but also to enable LIPA to replace and/or repower old, inefficient generation as a means to update and modernize the existing generating fleet on Long Island. In recognition of these needs, LIPA issued the RFP in August 2010.
What was the response to the issuance of
LIPA received 45 proposals from 16 different entities on March 31, 2011. Of these, 29 were on-Island generating projects and 16 were off-Island generation and transmission projects. On April 28, 2011, LIPA posted on its website at http://www.lipower.org/company/proposals/electric.html a list of the name(s) of each proposer’s parent and/or consortium members.
What were the criteria for evaluating the
Consistent with LIPA’s other generation and transmission resource procurements, LIPA set forth technical and cost criteria in the RFP, which were used to evaluate each proposal to determine which proposal would provide the best value to LIPA and its customers.
Which project(s) are being recommended to
LIPA’s Board of Trustees?
Based on the evaluation, LIPA Staff determined that the projects proposed by two experienced developers, J-Power USA Development Co., Inc. (“J-Power”) and Caithness Long Island II, LLC (“Caithness”), were ranked the highest. By resolution dated October 25, 2012, LIPA’s Board of Trustees authorized Staff to conduct negotiations with J-Power and Caithness for a 20-year Power Purchase Agreement (“PPA”), to determine which project will best meet LIPA’s needs.
The proposed projects are as follows:
- J-Power (which is a subsidiary of Electric Power Development, Co. LTD.) proposes to develop, own and operate a new 377 MW natural gas-fired power plant in Shoreham, New York in the Town of Brookhaven on a site reserved by LIPA for a future generating plant. J-Power also owns four existing generation plants on Long Island, including one at Shoreham.
- Caithness (which is a subsidiary of Caithness Energy, LLC) proposes to develop, own and operate a new 706 MW natural gas-fired power plant in Yaphank, New York in the Town of Brookhaven. This new plant would be adjacent to its existing 326 MW power plant.
What is the process going forward?
The project developer would be responsible for obtaining permits for siting and building the project. This would entail an environmental review process conducted by State and local regulatory agencies, which will involve public input. LIPA does not control the outcome of this process, which will be based on State and local permitting requirements.
Provided that a PPA meeting LIPA’s needs is negotiated with either J-Power or Caithness, and the environmental review for the project has been completed, the Board of Trustees would need to adopt all environmental findings required by applicable law and authorize the execution of a PPA. The PPA would also be subject to review and approval by the New York State Attorney General and the New York Office of State Comptroller. The LIPA anticipates that this process would be concluded by early 2015. The successful proposer would likely commence construction after PPA approval and receipt of all necessary permits.
How does the RFP fit into LIPA’s Long-Term
The project to be developed as a result of this RFP would provide the necessary new generating capacity to meet future electricity needs, and to provide the ability, if economic, to retire and repower the Port Jefferson power plant, among other power plants.
The RFP recommendation represents only a part of the strategy to meet the future electricity needs on Long Island. It is a “leg” of a three-legged stool - the others being the Amended and Restated Power Supply Agreement with National Grid for 3,700 MW of generating capacity, approved by the LIPA Board of Trustees on October 2, 2012 and implementation of the LIPA’s Resource Plan. And, the development of new generation is only part of LIPA’s strategy to meet the future electricity needs on Long Island in a cost-effective and environmentally sound manner. LIPA also plans to execute on its long-term Resource Plan, which seeks to further diversify the supply portfolio available for its customers, and includes continued efforts and investments to improve energy efficiency through the Efficiency Long Island Program; enhancements to existing renewable energy programs; future renewable energy procurements; replacing inefficient peaking units; and other actions and investments that might be necessary and/or feasible to reliably and economically meet future load. Specifically, Staff recommends that LIPA:
Commit to issuing a notice no later than July 1, 2013
for another 100 MW of renewable energy capacity under the
existing Clean Solar Initiative feed-in-tariff (or “FIT”) at
a price to be determined after assessment of market
conditions at that time.
- A portion of this total would be reserved for the East End of Long Island system as part of a comprehensive plan designed to defer the need for significant capital investments for transmission system upgrades.
Commit to expanding the feed-in-tariff to allow wind,
fuel cells and other renewable resources to fill an
additional 20 MW block of capacity.
- The pricing structure in the tariff would be set to reflect the unique characteristics of each resource block. This updated tariff would be made available on July 1, 2013.
Initiate a process involving LIPA Staff, renewable
energy providers, energy efficiency experts, and consumer
and environmental interest groups in January 2013 to solicit
input on expanding the use of renewable resources and
efficiency programs over the 2013 to 2022 timeframe and
- Consideration would be given to smaller and more affordable offshore and onshore wind, along with solar and fuel cells. The public input process would seek to find the most cost-effective procurement approach to obtaining a greater percentage of efficiency and renewable energy on Long Island, giving consideration to the capacity needed by 2022, and the goal of reducing load on the East End of Long Island to defer the need for transmission system upgrades.
- At the conclusion of the public input process, which would be expected to last through May 15, 2013, LIPA Staff would report the results to the Trustees and request a competitive procurement for additional renewable energy resources for up to 280 MW of capacity to be in-service by 2018. This procurement, combined with the expansion of the FIT would bring an additional 400 MW on-line by 2018.
- A second renewable RFP would be considered within the context of updating the Resource Plan commencing in 2013. Any action on LIPA’s collaborative wind project with NYPA and Consolidated Edison would be in addition to these resources and can add up to an additional 175 MW of offshore wind capacity to the Long Island system.
Commit to modifying the Solar Pioneer program to
provide rebates to residential customers who lease
qualifying solar PV systems.