PSEG Long Island is proposing to spend more than $200 million over the next four years to help reduce power usage by customers and ultimately cut energy bills.
The plan, required in PSEG's contract with LIPA, is expected to have "minimal" impact on rates, and even then not until the current rate freeze ends in January 2016, PSEG said.
The plan calls for PSEG to spend $200 million on the initiatives, and then recover that amount, with a profit, over as much as a decade while the initiatives are in place. Cost savings from reduced energy use could offset any rate increase, PSEG said.
The plan, Utility 2.0, calls for new methods and technologies to cut energy use by the utility's 1.1 million customers. These include adding new energy sources in strategic locations around Long Island, installing controllable thermostats to reduce use during peak-use times, and retrofitting hospitals, apartment buildings and businesses to cut energy use.
The plan, filed with LIPA and the state, aims "to lower total customer bills from what they would have been by lowering energy usage and deferring and/or avoiding the cost of supply and system improvements."
According to the proposal, "projections indicate that while the investment may marginally increase customer rates after the current rate freeze [which ends Jan. 1, 2016], the total costs are expected to be lower than they otherwise would have been due to avoided costs of supply and system investments that would have been required."
The measures are geared toward reducing demand by a total of 185 megawatts, about half the capacity of a large power plant. The plan would cost a total of $215 million, including $15 million in spending from LIPA's capital budget.
One green-energy advocate said that while the plan sets laudable goals to reduce demand through greater energy efficiency, it doesn't go far enough in advancing nonfossil fuel, renewable energy sources.
"The goal of every utility, and especially LIPA under PSEG Long Island, should be a rapid transition from fossil-fuel generation to renewable powered generation from the sun and wind," said Peter Gollon, chairman of Sierra Club Long Island's energy committee.
"Much remains to be done in this area," he said.
LIPA trustee Matthew Cordaro called the plan "monumental" in scope. But Cordaro expressed concern that the profit motive for PSEG "substantially reduces the character of LIPA as a public power utility." LIPA has had a $1 billion energy efficiency program called Efficiency Long Island.
The PSEG plan also includes funding for battery energy storage on the South Fork of the East End to reduce peak-period demand. In addition, advanced energy meters would be deployed for large customers, allowing them to gauge and better manage energy use to cut demand.
PSEG is seeking approval of the plan by LIPA trustees by Dec. 1. PSEG said it plans to hold a technical conference on the plan at Stony Brook University on July 24, 2014, and public hearings through the summer.
The initiatives would start next year, pending approval by LIPA trustees.
Reducing electricity demand
PSEG Long Island's $200 million plan to cut electricity demand includes:
$60 million to install programmable thermostats to remotely reduce temperatures in homes and businesses during periods of high heat.
$45 million for expanded solar-energy installations for businesses.
$8 million for home energy use reports for 250,000 customers to help them manage and reduce energy use.
$30 million to design energy-efficiency retrofits for hospitals.
$9 million to expand geothermal energy systems.
$13 million for efficiency programs for multifamily public housing customers in the Rockaways.