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LIPA board OKs new gas plant, 'green' plans

LIPA trustees Thursday approved plans to pursue a new gas-fired plant in Suffolk, a roster of "green" energy sources and a branding study that could ultimately see the LIPA name fade from public view.

The board authorized LIPA to pursue a contract for one new natural gas power plant in either Yaphank or Shoreham, in line with projections that LIPA will need 600 megawatts to 900 megawatts of new capacity by 2022. A megawatt powers around 800 homes.

Trustees approved a plan for LIPA to spend $385,000 to hire the firm, Landor Associates, to study potential new brands to replace LIPA.

"LIPA is looking to become less of an operating face and more of a regulator," said LIPA chief operating officer Michael Hervey. "Something more generic" could work as a brand customers would associate with the local electric utility, he said.

On Landor's to-do list: "create more public awareness of and accountability for the new service provider," PSEG, which takes over as the grid operator in 2014. The LIPA brand has ranked near the bottom of customer satisfaction and branding studies.

Trustees Thursday also approved plans to pursue up to 400 megawatts of new solar, wind, fuel cell and other renewable sources. Chairman Howard Steinberg said the authority was "hopeful" it could push renewables to 12 percent of LIPA's energy mix by 2020. Sources such as solar and wind energy currently make up around 3 percent.

Environmentalists at the meeting, disappointed that LIPA didn't select a 900-megawatt wind farm off the coast of Rhode Island that had been proposed, criticized the decision.

"It's not clear that you really need new fossil fuel plants," said Peter Gollon, energy chairman of the Sierra Club. "What you've done is put new generation first and efficiency and renewables last."

Trustee David Calone countered that proposed projects like the wind farm "would have led to substantial, nearly double-digit rate increases. The projects were not cost effective."

Others groups, including solar-panel installers and unions representing power plant workers, applauded the move to new plants and more solar projects.

One observer questioned whether all the new capacity will be needed.Energy expert Matthew Cordaro said given the state's recent blessing of a LIPA plan to pursue an overhaul of old National Grid plants, to the tune of $2 billion for 750 megawatts, "there may not be a need for a consideration of two additional major [new] projects."

Hervey noted that LIPA's assumption in repowering is to keep upgraded plants such as Port Jefferson and E.F. Barrett in Island Park "at the same size the units are now," and not increase their capacity. Repowering would make existing plants operate cleaner, cheaper and more efficiently.

The pursuit of the manifold new power sources comes as LIPA continues to see a leveling off of electric use among customers. So far this year, sales of electricity to residential customers are 66,257 megawatt hours are 1 percent below projections. Businesses used 183,271 megawatt hours less than LIPA had projected for the year to date, 2 percent under the budget

As it transitions to PSEG from National Grid, LIPA must also provide facilities for the new contractor. Trustees Thursday approved $9.2 million annually for PSEG to lease 10 National Grid facilities over a 15-year period, starting when PSEG takes over in Jan. 2014. LIPA will also pay $1.3 million to buy three other facilities, in Levittown, Ocean Beach, and Babylon.

LIPA trustees also approved the use of a National Grid computer system for PSEG for $1.6 million a year for four years, in addition to other costs. If LIPA and PSEG replicate the system in the future, they'll pay $26.5 million.

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