New push for Caithness II power plant in Yaphank

Caithness Long Island Energy and its supporters have begun a multipronged campaign to call into question PSEG Long Island's finding that a large power plant Caithness wants to build in Yaphank is not needed.

Caithness officials, supporters and lawyers, including former LIPA general counsel Stanley Klimberg, have made appearances at recent LIPA-PSEG hearings on a proposed rate hike to lay the groundwork to revive the 750-megawatt plant, called Caithness II.

An administrative law judge overseeing the PSEG rate case recently approved Caithness' request to become a formal intervenor in the rate proceeding, making it an interested party to the outcome.

"We are very skeptical that [PSEG's] is the best plan for Long Island," Ross Ain, president of Caithness Long Island Energy, said of the utility's ongoing study of Long Island's power needs, which found Caithness II wasn't needed.

Among Ain's concerns are that the process gives no forum for public review, meetings or input. He said he also is concerned that the plan could pave the way for more imported energy from PSEG sources in New Jersey and elsewhere -- electricity that Caithness could produce locally.

Wednesday, a group calling itself the Coalition for a Brighter Long Island is holding a rally to turn up the pressure on PSEG. "PSEG-LI has lost almost all of its credibility through its self-serving and ongoing neglect of the economic and environmental welfare of Long Islanders," a flier for the group states, charging PSEG aims to "compete with plants on Long Island."

The flyer states that Caithness II would bring $1 billion in "private investment" and 500 "good-paying jobs." Most of those jobs are during the two-year construction phase. The flyer states that Caithness II would "save" ratepayers $180 million in "net-cost benefits."

PSEG denied the claim and is standing by its assessment on Caithness II.

"We determined a new Caithness plant wasn't necessary," PSEG spokesman Jeff Weir said. "It was not linked to a desire to purchase power from PSEG plants in New Jersey," or anywhere else, he said. "There are no purchase agreements in place [with PSEG plants] and there are no plans to do that."

Donald Miller, a spokesman for Caithness Long Island, said Caithness will attend the rally Wednesday and appreciates the coalition's efforts.

"We're certainly delighted they are supporting the Caithness II project to promote economic development in Brookhaven Town and reduce our reliance on the older plants," Miller said.

To back its claims, Caithness has commissioned a study by GE Consulting Services to compare the market impact of Caithness II to other possible options, including expansion of cables to PSEG plants off Long Island.

Caithness, which already operates a highly efficient 350-megawatt plant in Yaphank, won a request for proposals by LIPA in July 2013 to build a 750-megawatt plant adjacent to the existing facility.

But PSEG found LIPA for nearly a decade had an average excess power of 528 megawatts a year, costing ratepayers a total of $641 million. PSEG said the region had enough generating capacity to last until at least 2020 with no major new plants. The determination put plans for Caithness II on ice.

LIPA estimated Caithness II would have increased rates up to 3 percent.

Newsday has reported that the plant had a total 20-year cost in excess of $3 billion.

In January, PSEG Long Island president David Daly, in updating the forecast to say no new power was needed until 2024, explained it succinctly. "We have too many [capacity] contracts and too many power plants," he told the Long Island Regional Planning Council.

In a filing with the Department of Public Service in response to PSEG's 3.9 percent rate-hike proceeding, Caithness lawyer Klimberg, with the firm Ruskin, Moscou Faltischek of Uniondale, raised questions about how the rate plan "will incorporate any changes" to PSEG's existing baseline power plan if the utilities, for instance, decided to retire certain National Grid plants or move ahead with Caithness II.

Klimberg also raised questions about a rate mechanism PSEG is requesting, called a "delivery service adjustment," that would allow the utility to raise, or lower, customer charges if costs for storms, debt refinancings or National Grid power plant charges changed during the next three years. Costs could increase, Klimberg wrote, "without rate-case review."

Weir of PSEG said the company, in its ongoing analysis of Long Island's power sources, was "committed to finding the right solution that will minimize and reduce the costs for all customers across our service territory in the future." While Caithness officials disagreed with the PSEG assessment, much of the criticism of PSEG has come through proxies.

Earlier this month, Daniel Tomaszewski, president of the Longwood school district and leader of the Coalition for a Brighter Long Island, attacked PSEG's analysis during a public hearing on the proposed 3.9 percent rate hike.

"I worry that PSEG Long Island is deceiving ratepayers like me by asking us to pay for more power from PSEG's plants in New Jersey and Connecticut as the company delays new, clean efficient energy that would serve Long Islanders here on Long Island," he said.

Tomaszewski said his new "grassroots coalition" isn't just focused on the $13 million Caithness II would pump into the Longwood school district each year. "We need economic development," he said, adding that the first Caithness plant "is a good neighbor" that "any Long Island community would want in their backyard."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.