Long Island's energy challenge: Cleaner options, rein in rates

For Long Island ratepayers battered by the country's fourth-highest energy costs, the next 20 years promise a universe of devices and technologies to take charge of their energy fate. The goal: cut carbon emissions and get bills under control.

Behind the scenes, meanwhile, their power company is planning a cleaner future by eyeing projects like a new cable to import clean Canadian hydropower to replace at least one or more soot-belching generating plants, while more than doubling renewable sources and offering incentives to cut use.

The new diverse sources will be needed.

In 20 years, the Long Island Power Authority projects, peak consumption on the Island will be one-third higher, or by about 3,000 megawatts - about half of what Nassau and Suffolk use on a hot summer day now.

And the prospect of new fleets of plug-in electric cars in coming decades, experts say, could push that demand curve even higher.

LI's unusual situation

But Long Islanders face a unique challenge that will continue to drive energy costs up for many: Because LIPA is burdened with $7 billion in debt, much of it tied to the closing of the Shoreham nuclear power plant, customers who continue to get most of their electricity from the utility may see little rate relief for decades - and could foot the bill for those who convert to greener alternatives.

It's happening already. Customers who install solar panels and cut their bills do so with hefty rebates from LIPA paid for by the remaining 1.1 million customers.

Conditions are ripe for an energy revolution by a new and slowly growing class of energy user on Long Island: Those who produce and store their own energy, and cut their bills and carbon footprints to a minimum.

Solar power and geothermal heating and cooling systems, while still a tiny part of Long Island energy landscape, are expected to accelerate as technology improves and continues its price slide, and as new devices to store abundant sun energy hit the market.

"Twenty years from now, most if not all buildings on Long Island - homes and offices - will be generating their own power," said Gordian Raacke, executive director of Renewable Energy Long Island, a LIPA-funded clean-energy promoter.

Two state-of-the-art homes on the East End illustrate the allure of the self-sufficient energy model.

The $3.5-million Lauto home in Montauk uses heating and cooling systems that draw energy from deep within the earth, solar panels to produce more energy, and a tightly controlled environment of switches and monitors to put the family - and the house itself - squarely in charge of its energy destiny.

In Southampton, the overhauled home of the Dubin family is essentially a net-zero-energy reality, wrapped so tightly that little heat or cool air escapes, lighting with modern LED lights for pennies, and water is heated via geothermal and sun-based systems. A computer monitor that sits on a kitchen counter gives a minute-by-minute report of home energy production - and savings.

(Solar) window into future

For the Long Island Power Authority, which steers the region's energy fate, the need to explore new energy sources is urgent. Contracts for capacity from the Island's largest power plants, owned by National Grid, expire in 2013. But LIPA is expected to rely on them for the foreseeable future.

"We have a 20th century grid in a 21st century world," said outgoing LIPA chief Kevin Law. So now is the time to start planning for cleaner power.

Accordingly, LIPA in coming weeks will put out bids for enough new power to supply up to 1,000 megawatts - 20 percent of the amount needed to meet summer-peak demand. Planners are keeping an eye on new regulations.

"We can't ignore the impact of climate legislation," said Paul DeCotis, a former deputy secretary for energy of New York State and LIPA's vice president of power markets.

The utility power shift will be largely invisible to customers. Not so changes at home, where, pundits say, control over usage, energy sources and costs will move from the backyard meter to the living room. Omar Siddiqui, program manager for energy utilization for the Electro Power Research Institute in Palo Alto, Calif., views a future in which a desktop "energy management control system" makes all home energy decisions.

Windows - some solar-power collectors - would dim automatically to maximize light and restrict or increase heat. Furnaces and central air conditioners would be replaced by highly efficient heat pumps, which would send refrigerant through tiny pipes to individual rooms to control temperature. Homes equipped with $250 smart meters and fed by a utility's smart electric grid would give users and utilities more information and more ways to change usage patterns to cut costs, including off-peak pricing. Meter readers would be a thing of the past.

The question is whether LIPA can figure out a revenue model in this future scenario, said Raacke of Renewable Energy Long Island.

"We have perfect conditions: high electric rates and a great amount of sunshine," Raacke said. "The trick for LIPA and other utilities is to figure out a way to generate revenue from that."

Raacke envisions a day when the utility is more of a power manager of largely scattered energy resources, and less of a power producer.

The smart grid LIPA is planning could take on that role, Law said.

Overhauling power plants

Long Island's iconic power plants won't be a thing of the past, but their roles will be different. The regional energy plan now under consideration forecasts that at least two of the big five steam-generating plants - Far Rockaway and Glenwood Landing - will be retired.

Ideally, LIPA wants the plants' owner to upgrade the remaining three - the big Northport power station, Port Jefferson, and E.F. Barrett in Island Park.

But the bill of around $1 billion per plant will come back to LIPA ratepayers - same, too, for the smart grid. Given that some or all of the plants could be sold by owner National Grid, upgrade plans remain sketchy.

Bob Catell, co-chairman of the Advanced Energy Research and Technology Center at Stony Brook University, predicted that even in 20 years, as much as half of Long Island's power will come from local power plants - though they will probably be upgraded.

He pointed to a coming generation of plug-in electric cars as a big reason reliance on the grid could actually be greater than it is now. And while technology is improving, he noted, "You can't get that much power from renewables."

One thing is clear: While oil is an option to fuel the plants, its use has decreased markedly. In the last year alone, the plants have run almost exclusively on natural gas. That presents new challenges.

Energy expert Matthew Cordaro, dean of Dowling College's business school, said there's already a need for more gas here - to power overhauled plants and displace heating systems using oil. "I think more than one new gas line is needed," Cordaro said.

The rejection of Broadwater, the proposed liquefied-natural-gas barge that would have sat in Long Island Sound, only delayed the call for a major gas pipeline to supplement the three that now feed Long Island.

But not all current plants may need the gas they use. Under one scenario, the Port Jefferson power station would be converted to a receiving station for a Canadian hydropower cable snaking its way here in the next decade - delivering 600 megawatts, Law said - nearly double that of the existing power plant.

Expanding marketplace

LIPA's plan for less costly hydropower isn't the only one envisioned. "I see room for many players as we look at the decarbonization of the marketplace," said Don Jessome, chief executive of Transmission Developers Inc. By 2015, the Ontario firm plans to build a 355-mile, 2,000-megawatt line called the Champlain Hudson Power Express - though most of its capacity will feed New York City.

Long Island already gets a growing percentage of its power from faraway sources.

The Neptune Cable, which originates in New Jersey and has operated since 2007, delivers around 600 megawatts. The Cross-Sound cable under the Long Island Sound from Connecticut adds another 300 megawatts.

The challenge for LIPA is to keep pace with growing demand, satisfy public policy goals that stress cleaner power, and do it all while staving off a revolution by rate-stressed customers.

If LIPA misses the boat, a new concept called micro-grids could step up.

They're local collectives of electric customers that use the big utility as one of many power sources, with communal decisions about conservation, renewables and pricing.

An example: Princeton University can hop off the grid and access a plant of its own when peak pricing spikes in the summer. John Kelly, deputy director of the Galvin Electricity Initiative, a backer of micro-grids, said the concept could spur small, community decisions to go all-solar, mandate conservation, or reach out to distant energy suppliers.

Said Kelly, "The old utility model and structures are going to look very bad in the future."