The National Grid Power station in Northport on December 12,...

The National Grid Power station in Northport on December 12, 2012. Credit: newsday / Thomas A. Ferrara

LIPA again will study the feasibility of overhauling aging power plants in Port Jefferson, Island Park and Northport under a provision in the new state budget, even as PSEG Long Island said no new power sources are needed until 2024.

Budget language agreed to by Gov. Andrew M. Cuomo and state legislative leaders calls for LIPA to undertake "engineering, environmental-permitting and cost-feasibility" studies of repowering the three National Grid-owned plants. The original budget bill will refinance an additional $2.5 million of LIPA debt.

The budget also includes language preventing LIPA from extending the life of any refinanced debt beyond its current maturity date.

According to the bill, the repowering studies must begin by Oct. 1 for the Island Park and Port Jefferson plants, and Oct. 1, 2018 for Northport. They are to take no longer than 18 months, after which they'll be presented to LIPA's board of trustees and the state Department of Public Service.

National Grid and LIPA previously in 2009 completed repowering studies of the plants as part of National Grid's purchase of KeySpan. The studies showed repowering Northport would cost between $1.6 billion and $1.9 billion, Port Jefferson between $614 million and $685 million, and the E.F. Barrett plant in Island Park $940 million. Alternatives included building entirely new plants on the sites.

Sen. Kenneth LaValle (R-Port Jefferson) said he was "optimistic" the studies would show overhauling the plants would benefit LIPA and its ratepayers. "I think a commitment has to be made quickly for those communities" around the plants, he said.

PSEG spokesman Jeff Weir indicated PSEG has already weighed in on the subject of new generation. "After careful study last year, we determined that there was no need for additional generation on Long Island until, at least, 2024," he said. "We wholeheartedly embrace this process because all we want is to implement the lowest cost and most reliable solutions."

LIPA will pay for the new studies, which LaValle expects will be done by an outside consultant.

Each of the plants has been the subject of separate tax grievance cases by LIPA seeking to drastically reduce the hundreds of millions of dollars LIPA pays in combined taxes annually for the plants.Matthew Cordaro, a LIPA trustee who as a past director of Long Island University's Center for Management Analysis wrote studies on the advantages of repowering the old plants, expressed concern with the timing of the new study. Noting that PSEG's review will be completed early next year, he said, PSEG "could be well on the way to making commitments which would lock out the hope for repowering for many years."

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