For Immediate Release: October 25, 2012
LIPA Trustees Approve Actions to Meet Long Island’s Long-Term Energy Needs
Plan reinforces LIPA’s commitment to diversify its energy portfolio to meet future resource needs through a combination of new and repowered generation facilities, new renewable energy resources and continued commitment to energy efficiency
Uniondale, NY – The Long Island
Power Authority (LIPA) Board of Trustees voted today to
authorize staff to begin negotiating potential power
purchase agreements (PPA) for new generating resources
consistent with LIPA’s Electric Resource Energy Plan. The
Trustees also authorized actions related to diversifying
LIPA’s resource portfolio, including efforts and investments
to improve energy efficiency through the Efficiency Long
Island Program, its renewable energy programs, future
renewable energy procurements, and other actions and
investments targeting up to a minimum of an additional 400
megawatts (MW) by 2018 resulting in a total of over 700 MW
installed.
LIPA Chairman Howard Steinberg called the action
today significant and precedent setting. “The action today
to support the addition of new, clean and more efficient
natural gas, base-load generation, coupled with an
aggressive renewable energy program and continued support
for our $924 million 10-year energy efficiency program,
positions LIPA to diversify its energy portfolio and begin
the transition to a cleaner, more reliable, and reasonably
priced electric system on Long Island.”
“Today’s action by the LIPA Board is a giant step
forward toward securing our energy future," said LIPA Chief
Operating Officer, Michael Hervey. “While LIPA has
consistently supplied safe and reliable energy to our
customers over the last decade, the fact is that peak demand
continues to grow on Long Island. This comprehensive energy
plan will ensure that we will be able to meet our future
energy needs using a diverse mix of energy resources and
efficiency measures that are reliable, economic, and
environmentally friendly.”
Competitive results of LIPA’s Generation and
Transmission Request for Proposals
In 2010, LIPA issued a request for proposals (RFP) seeking
new and/or repowered resources to help meet Long Island’s
growing energy demand and the requirements of the New York
State Reliability Council and New York Independent System
Operator.
LIPA received 45 proposals from 16 entities on
March 31, 2011, which reflected a variety of technologies
and project sizes. The analysis showed that the best
proposals provided potential savings of several hundred
millions of dollars while the less competitive proposals
could have cost several billion dollars.
Following a comprehensive analysis, it was
determined that the projects proposed by J-Power USA
Development Co., Inc. (J-Power) at the Shoreham generation
site and by Caithness Long Island II, LLC. (Caithness) in
Yaphank were the highest ranked proposals. LIPA Trustees
decided to conduct negotiations with each proposer to
ultimately determine which project would be able to receive
all necessary regulatory approvals and permits in a timely
fashion and would provide the best value to LIPA customers.
“The selection of new generation resources has the
potential to create 700 to 1300 highly-skilled construction
and trades jobs on Long Island and up to 30 permanent jobs
during operation, further helping the region recover from
the most severe economic downturn since the Great
Depression. This coupled with significant expansion of
LIPA’s renewable energy program and continued investment in
energy efficiency will add thousands of new jobs to the
region and improve our environment,” said Paul DeCotis,
LIPA’s Vice President of Power Markets. “The addition of new
base-load resources will also provide the opportunity and
resources necessary to repower the Port Jefferson steam
plant, which must be removed from service prior to
repowering. Securing new additional generation now will
further support this effort and reduce customer costs over
what they might otherwise have been.”
The Caithness Project
Caithness (a wholly owned subsidiary of Caithness Energy
LLC.) proposes to develop, operate, and own a new 706 MW
natural gas-fired, combined cycle power plant in Yaphank,
New York in the Town of Brookhaven on the same site as its
existing 326 MW combined cycle generation plant. Caithness
proposes to sell the entire output of the proposed project
to LIPA under a 20-year PPA following its proposed May 1,
2017 commercial operation date (COD). Natural gas for the
new plant would be delivered using either the existing
National Grid gas system or through a new gas pipeline being
proposed by Northville Industries.
The J-Power Project
J-Power (an indirect wholly-owned subsidiary of Electric
Power Development Co. Ltd.) proposes to develop, operate,
and own a new 377 MW natural gas-fired, combined cycle power
plant in Shoreham, New York in the Town of Brookhaven on a
site owned by LIPA. J-Power proposes to use the latest
Mitsubishi 501G combined cycle technology designed for
maximum efficiency.
J-Power proposes to sell the entire output of the
proposed project to LIPA under a 20-year PPA following its
proposed for May 1, 2017 COD. Natural gas for the new plant
would be delivered using either a new marine, pipeline
extension proposed by Iroquois Gas Transmission or through a
new gas pipeline being proposed by Northville Industries.
Before any selected project could commence
construction, a full environmental review must be completed
by the developer, and LIPA’s Board of Trustees may be
required to adopt all environmental findings produced prior
to authorizing the execution of any resulting PPA. The
agreement would also be subject to review and approval of
the New York State Attorney General and the New York State
Comptroller.
“The Long Island Federation of Labor, AFL-CIO fully
supports the decision by the Long Island Power Authority
Trustees to maintain a dependable supply of power on Long
Island. Building a new generating facility here on Long
Island is the right decision for our regional economy.
LIPA’s decision will create hundreds of construction jobs
and allow for the repowering of existing facilities, which
will save existing union jobs.” John R. Durso, President,
Long Island Federation of Labor, AFL-CIO
LIPA’s continued commitment to invest in
efficiency and renewable energy
While neither project selected will fully meet LIPA’s future
energy needs on its own, LIPA envisions that this gap will
be made up through a combination of energy efficiency, clean
technologies, and renewable projects such as solar, wind,
and fuel cells. In furtherance of implementing its electric
resource plan, LIPA will expand its successful solar rebate
and feed-in (FIT) tariff and issue a new competitive
solicitation for renewable energy on Long Island, actions
that are consistent with the recommendations of Governor
Cuomo’s Energy Highway Taskforce. Specifically, LIPA will:
- Immediately modify the Solar
Pioneer program to provide rebates to residential
customers who lease qualifying solar PV systems.
- Commit to issuing an
additional 100 MW of renewable energy capacity, no later
than July, 1, 2013 under the Clean Solar Initiative
feed-in-tariff (FIT)
- Commit to modifying LIPA’s
tariff, no later than July 1, 2013 to allow wind, fuel
cells and “other” renewable resources to compete for an
additional 20 MW block of capacity.
- Commit to issuing a
competitive procurement for additional renewable energy
supply, including offshore wind, for up to 280 MW of
capacity by 2018.This procurement, combined with the
expansion of the FIT would bring an additional 400 MW
on-line by 2018.
- Along with NYPA and Con
Edison, continue to pursue and seek private and federal
funds where feasible for the LI-NYC Offshore Wind
Project which could produce between 350-700 MW and is
currently in the lease application stage with The Bureau
of Energy Ocean Management.
- In addition, LIPA will
initiate a process involving LIPA staff, renewable and
energy efficiency industry experts, and environmental
and consumer interest groups to expand LIPA’s use of
renewable resources and efficiency programs beyond 2018
to ensure that LIPA is adding renewable energy capacity
at a level comparable to the rest of the state.
“In early 2012, Governor Cuomo announced the New
York Sun Initiative with goals to significantly expand the
deployment of solar energy in New York State. LIPA is to be
commended for their vision and their response to the New
York Sun Initiative in expanding the deployment of solar on
Long Island. A goal of 400 MW by 2018 is a huge step in the
right direction and LISEIA looks forward to working with
LIPA on the details of each of the initiative,” said
Chairman of The Long Island Solar Energy Industries
Association, Sail Van Nostrand.
“We commend the LIPA staff and Board for their
continued work to promote and expand solar on Long Island,
said Co-Founder and CEO of Green Logic Energy, Marc Clejan.
“The addition of 100 MW of solar thru the Feed-In Tariff
program is a great step in that direction. We particularly
commend LIPA on their commitment to ensure the FIT program
continues to encourage the development of more smaller
distributed generation sites which help create a broader,
deeper and more sustainable market for renewable energy on
Long Island.”
“We can’t afford not to invest in renewable
energy,” said LIPA Vice President of Environmental Affairs,
Michael Deering. “However, the time, the projects and the
price has to be right in order to continue to meet our
on-island regulatory requirements and continue to keep
prices stable for our customers. The renewable energy and
efficiency component of this plan will allow us to further
diversify our energy portfolio and reduce peak load with
projects that are environmentally and cost friendly.”
LIPA, a non-profit municipal electric provider, owns the retail electric Transmission and Distribution System on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens. LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered. In 2011, LIPA outperformed all other overhead electric utilities in New York State for frequency and duration of service interruptions. LIPA does not provide natural gas service or own any on-island generating assets. More information about LIPA can be found online at http://www.lipower.org.
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