LIPA Comments On The Draft New York State Energy Plan and
Draft Environmental Impact Statement
 
Long Island Marriott, Uniondale, New York
February 5, 2002 @ 1:00 P.M.

Good Afternoon:

I am Richard J. Bolbrock, Vice President of Power Markets, for the Long Island Power Authority.

The Long Island Power Authority, or LIPA, was created by the New York State Legislature in 1986. LIPA’s acquisition of LILCO resulted in immediate rate reductions of 20.9 percent in Nassau County and the Rockaway Peninsula in Queens and 19.1 percent in Suffolk County. Information about LIPA and many of its programs, including its energy conservation programs for residential and commercial customers, are available at LIPA Web site www.lipower.org.

Now, with that introduction about LIPA, I would like to briefly discuss the Draft State Energy Plan (SEP) that is the subject of today’s hearing. First I would like to comment on the five SEP objectives in the context of Long Island. The Energy Planning Board has annunciated sound strategies for putting New York on a continued path toward a sustainable energy future that both improves our environment and grows the economy though market forces. LIPA is currently and will continue to implement policy objective #1, which supports the continued safe, secure, and reliable operation of the energy system infrastructure. Since acquiring LILCO, LIPA has embarked on a major capital improvement program for its transmission and distribution system to enhance system security and reliability, raising annual expenditures at the time of the transaction from about $125 million per year to the current level of $332 million in 2002. The result has been that LIPA’s customers enjoy the lowest number of service interruptions as well as the shortest service interruption duration of any overhead utility in the state.

Through a competitive negotiation process, LIPA has also supported the development of ten simple-cycle gas turbines at six sites on Long Island. The six generating facilities are needed to avert a serious electric capacity supply problem on Long Island for the upcoming summer and to maintain system reliability.

LIPA stands ready to actively participate in the proposed study regarding the security of New York’s energy infrastructure recommended in the Draft Energy Plan. One step that is currently being taken by LIPA to support this objective as well as several of the other energy policy objectives of the SEP, is the Cross-Sound Cable Project that will connect Long island to the Connecticut grid adding approximately 330MW of new transmission capability to Long Island. Among other benefits, the cable will make Long Island less of an electrical island and provide enhanced reliability benefits to the residents of both Long Island and Connecticut.

Policy objective #2, stimulating sustainable economic growth through greater reliance on market forces, is also supported by LIPA. It is important for the State to continue to encourage meaningful public participation in the siting of new major electric generating facilities while exploring ways to both streamline the approval process and, to the extent feasible, align the process with the new structural changes that have occurred in the industry. Consistent with the recommendations associated with this policy objective in the Draft Energy Plan, which LIPA supports, LIPA has and will continue to actively support the establishment of a Northeast RTO that would merge the operations of the NYISO, the New England ISO and the Pennsylvania, New Jersey, and Maryland ISO in a manner that benefits the residents of New York. Regarding the recommendation that the State move expeditiously to a fully-competitive retail electricity marketplace, LIPA has recently opened its retail access program, known as Long Island Choice, to all of LIPA’s more than one million customers. This action is being implemented years ahead of schedule, and according to information provided by the American Public Power Association, LIPA is the only large public power entity in the country to have taken this step.

A cornerstone of LIPA’s energy strategy and planning is the continued emphasis on the promotion and deployment of energy efficient technologies and the development of clean distributed generation (DG) technologies such as photovoltaics, wind and fuel cells. In 1999, at the urging of Governor Pataki, the LIPA Board of Trustees adopted a Clean Energy Initiative, which is a 5-year, $170 million program designed to achieve these aims. The State can play a vital role in achieving the goals of this policy objective #3, increasing energy diversity in all sectors of the State’s economy through greater use of energy efficient technologies and alternative fuels. LIPA is already investigating and/or implementing many of the recommendations in the Draft Energy Plan associated with this policy objective.

Policy objective #4, promoting and achieving a cleaner and healthier environment, is strongly supported by LIPA. LIPA’s Clean Energy Initiative is one vehicle to help achieve the goals of this objective. Meaningful greenhouse gas emission targets are needed if progress in this area is to be made.
 
LIPA also believes that tradable credits for actions already taken make good sense, as does the development of a program that encourages businesses to enter into voluntary agreements to meet specific energy efficiency targets and reduce greenhouse gas emissions. LIPA would play a supportive role in this effort, largely through its Clean Energy Initiative. LIPA’s mission is aligned with policy objective #5, ensuring fairness, equity, and consumer protections in an increasingly competitive market economy. Clearly LIPA has somewhat of an advantage in addressing this objective because LIPA’s primary mission is public service. Nonetheless, this remains a challenging issue given the various consumer classes and technical complexities of cost determination and allocation.
 
LIPA commends the State Energy Planning Board for preparation of a comprehensive and well thought out draft SEP. We believe the recommendations for attaining the policy objectives are realistic and achievable and will keep the State on a course that ensures a secure, affordable, and reliable energy supply. LIPA stands ready and willing to assist in achieving the Plan’s goals
 
Since its acquisition of LILCO in 1998, LIPA has determined and has demonstrated that it is possible to provide its customers with the delivery of reasonably priced, environmentally responsible, and secure energy service with a high degree of reliability. We have seen that with public out reach and education coupled with appropriate levels of incentives, residents and businesses alike are willing to change their attitudes and behavior toward the utilization of energy resources. We observe that employing technological innovations in a supportive market structure are key to achieving the desired results. We urge that the State take the appropriate steps to implement the policy objectives

Thank you for this opportunity to comment on the draft SEP.

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