LIPA: Energy Crisis Far From Over

More Resources to be Added for Summer, But Supply Could be Tight

Kessel Details State of Long Island’s Electric Supply
in Speech before Hauppauge Industrial Association

Smithtown, NY – March 12, 2002 – Long Island’s electric supply will remain tight this summer, according to Long Island Power Authority (LIPA) Chairman Richard M. Kessel. He also warned that several major power producers who are currently planning to build new power plants on Long Island are canceling other projects around the country raising concern about the long-term commitment to complete plants on Long Island.

Long Island’s electric demand is still growing at an annual rate of about 100 megawatts (MW) per year, despite a recent economic downturn, Kessel said in a far-ranging speech today before a luncheon of the Hauppauge Industrial Association. Despite recent statements that energy demand growth would taper off this year, Kessel said that LIPA is already seeing growth numbers that could mean another record electricity use this summer. According to Kessel, LIPA already has 21.4 MW of additional commercial growth (out of a projection of 24 MW for the entire year) and its only mid-March.

“We’re not out of the woods yet,” said Kessel. Even though LIPA is pressing forward with projects to add about 400 MW of new electricity to be produced by ten new turbine generators being placed around Long Island, and the possibility of a new cross-Sound cable being completed in time for summer that could carry an additional 330 megawatts of power, Kessel emphasized that electricity consumers will “need to conserve as much as possible to get Long Island through extreme heat waves.”

Since all of the new electric resources may not be available in time for the entire summer, Kessel said that LIPA will “continue to stress energy conservation and efficient energy use as part of our Clean Energy Initiative, but we can’t ignore the fact that we also need new generation resources on Long Island.

“Long Island’s demand will continue to grow at a rate that is outpacing the state,” said Kessel. “As a result, we need to evaluate the electric resources that will be required if we want an adequate supply to meet demand and to have a truly competitive retail market for electricity on Long Island.”

Kessel also indicated that he was concerned about the power producers around the country who are pulling back from commitments to build plants in a number of states.

“We will seek to encourage producers to build plants for the out years of 2005 and 2006,” said Kessel. “We need new generation resources or we’ll go dark.”

Last year, LIPA’s Clean Energy Initiative lowered electric use on the Island by about 115MW, said Kessel. But increased demand offset the savings, which is another reason why more on-island generation is needed.

In many ways, Kessel said that Long Island is in much better shape than it was last summer, but “we must continue to conserve as much as possible while we seek to add new generation resources, which would include alternative generation technologies.”

In addition to reducing electric rates by an average of 20%, and saving electric customers approximately $2 billion over the last four years, LIPA has fully opened the Long Island market to retail competition through its Long Island Choice program.

The full text of Mr. Kessel’s presentation before the HIA can be obtained through LIPA’s Web site at www.lipower.org.

The Long Island Power Authority owns the electric retail system on Long Island, and provides electric service to nearly 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens. LIPA is the second largest municipal, not-for-profit electric utility in the nation in term of sales, and the third largest in terms of customers served. LIPA does not provide natural gas service.

Information about LIPA’s wide range of energy saving, money saving programs can be obtained by visiting LIPA’s Web site, or by calling the EnergyWise Infoline at 1-800-692-2626.
 

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