PSEG considers delaying some power projects

An aerial photo of LIPA's Caithness facility in An aerial photo of LIPA's Caithness facility in Yaphank shows the large rectangular parcel about the same size as the plant directly adjacent to the now operating facility on June 6, 2013. Photo Credit: Doug Kuntz

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LIPA and the state are reviewing recommendations from PSEG Long Island that conclude that the region has plenty of power to get it up to 2022, including a finding that projects such as the proposed Caithness II plant "will not be needed."

PSEG's recommendations include "delaying decisions on current" Long Island Power Authority requests for proposals. While PSEG did not offer specifics, a list of planned LIPA projects includes the 752-megawatt Caithness plant, upgrading smaller plants and making the natural gas pipeline and electrical infrastructure enhancements that would be needed to accommodate them.

LIPA also has a request out for 280 megawatts of renewable energy, for which at least one wind energy company plans to bid. LIPA's road map includes overhauling the E.F. Barrett power station in Island Park by 2019 and, further into the future, repowering the Port Jefferson power station.

"If LIPA adopts our recommendation on changes to the planning criteria, our analysis indicates there is adequate [power] supply through 2020 to 2022," said PSEG Long Island president David Daly. "This, in turn, provides an opportunity to take a step back and a fresh look at the mid- to long-term supply picture, which PSEG Long Island would capture in a comprehensive integrated resource plan." Some plans already underway, he said, could be "scaled back or delayed."

Daly, in an interview Tuesday, said PSEG is "awaiting completion" of the separate LIPA and state Department of Public Service reviews before it acts on the recommendations.

LIPA trustees are expected to be briefed on the PSEG review at a special board meeting at LIPA headquarters Wednesday.

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As reported in Newsday last week, PSEG found that LIPA's planning approach called for considerably more new power sources than even the New York Independent System Operator, which sets capacity requirements for utilities statewide. PSEG recommended taking the NYISO approach, which it notes is an industry standard used by all other state utilities.

Newsday reported on LIPA's approach in June, noting it contained 585 megawatts of "allowance for contingencies" beyond the state requirement. Newsday also reported that the Caithness II plant would cost an estimated $3 billion over its 20-year contract.

Daly declined to discuss the specific recommendations in the report, saying it was LIPA's decision whether to accept and follow them. PSEG officials close to the review have previously said LIPA found the recommendations "reasonable" and would not put the Caithness II contract up for a trustee vote this year.

LIPA declined to comment.

PSEG proposes spending the next 12 to 18 months to develop a broad integrated resource plan that would negate near-term rate hikes tied to additional power while working to integrate its Utility 2.0 plan, which would add renewables and reduce the need for some 185 megawatts of power.

Legislators and environmentalists say they are behind PSEG's plan.

"It's a transformational moment," said environmental activist Peter Maniscalco, who successfully opposed the Shoreham nuclear plant more than 40 years ago. "There is the great joy in having said no to nukes, no to fossil fuels and we're finally going to be able to get a renewable energy future."

State Sen. Kenneth LaValle (R-Port Jefferson) said he was "upbeat" about the PSEG findings.

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Caithness Long Island Energy president Ross Ain said in a statement that the plant developer "looks forward to working with PSEG Long Island and LIPA as they conduct further analysis."

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