LIPA to name preferred power plant proposal

Gov. Andrew M. Cuomo's office has postponed the

Gov. Andrew M. Cuomo's office has postponed the signing of his recently approved LIPA reform bill because of a scheduling conflict, according to an official notice. (July 15, 2013) (Credit: Newsday / Alejandra Villa)

The Long Island Power Authority Thursday will make a presentation to trustees on its preferred proposal for a new large power plant to be built by 2016 at a cost that could reach $3 billion.

Trustees aren't expected to approve the contract for the plant, but LIPA staff has been expected for weeks to announce which of two finalists it deems the better proposal: Caithness II, a 707-megawatt Yaphank plant; or J-Power USA, a 377-megawatt plant in Shoreham. Both would be highly efficient natural gas-powered plants. One megawatt provides power for around 800 homes.

Sources have said LIPA appears to be favoring the more expensive Caithness proposal. LIPA spokesman Mark Gross declined to comment on the topic.


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The plant decision comes a day after Gov. Andrew M. Cuomo had planned to hold a ceremony near LIPA's Uniondale headquarters to sign his LIPA overhaul bill, which was approved by the State Legislature last month. The ceremony was postponed until Monday because of scheduling conflicts, Cuomo's office said Wednesday.

LIPA trustees have scheduled two meetings for Thursday at that headquarters, both open to the public. At 9 a.m., the trustees' Finance and Audit Committee will meet, to be followed by a full trustees meeting at 11 a.m.

LIPA has said it expects to announce the results of its three-year review of new power-plant bids, which could start the permitting and licensing process in advance of approving a 20-year agreement to either Caithness II or J-Power.

Depending on which proposal LIPA chooses -- if indeed it chooses one Thursday -- LIPA ratepayers would be on the hook for $1.5 billion to $3 billion or more over the 20-year life of the contracts, experts projected. LIPA has said the additional power is needed to meet increased energy needs by decade's end, although critics say LIPA could be overbuilding for electric demand that is largely stabilizing on Long Island.

When it first announced the selection of the two finalists in October, LIPA said the new project could create up to 1,300 construction jobs, and help LIPA "diversify its energy portfolio."

Proponents say newer, efficient plants could ultimately save LIPA money over its existing fleet of older, National Grid-owned plants, which are considerably less efficient.

Local towns and villages that host the antiquated power plants, including Island Park, Northport and Port Jefferson, face tens of millions of dollars in reduced tax payments from LIPA, which is grieving plant assessments but recently made settlement offers.

The municipalities and school districts would prefer that LIPA overhaul those older plants to increase their value, and keep tax payments relatively stable. LIPA has said it needs the new plants to have enough excess power so that it can take the older ones temporarily off line to complete the upgrades.

LIPA has said it may need up to 900 megawatts of additional capacity by the end of the decade. It already has more than 6,300 megawatts of capacity from a variety of sources, including undersea cables, plants and an upstate nuclear facility.

Last week, LIPA's peak loads reached more than 5,700 megawatts, well below the all-time peak of 5,915 in July of 2011. Trustees will discuss the authority's performance during last week's heat wave at Thursday's meeting.

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