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LIPA, full of excess power, sees no need for new plants until 2035

Long Island has so much excess power, and peak summer usage is projected to grow so slowly in the next 20 years, that new plants may not be needed until at least 2035, a new analysis shows.

The findings by PSEG Long Island, presented by LIPA Thursday, offer a stark departure from previous projections that foresaw peak-power use sharply growing in the next two decades.

The new analysis projects peak power demand to decline for the next three years before beginning a slow, marginal increase through 2035. That’s a dramatic change from 2010, when LIPA had forecast a peak load demand of more than 7,600 megawatts by 2035. Now, the projected load for 2035 is about 5,500 megawatts, slightly above where it is currently. A megawatt powers from 800 to 1,000 homes.

The forecast marks a change from projections as recently as 2015, when PSEG expected growth of nearly 1,000 megawatts, the equivalent of three average gas-fired power plants, by 2035.

Reappraising needs

The new analysis raises questions about plans to overhaul existing power plants, or build new ones, suggesting that such expensive propositions would be unneeded and wasteful.

The presentation by LIPA included a slide that questioned the plan to overhaul the plants, saying that cheaper natural gas “reduces the value” of fuel savings from newer plants. It also notes that an influx of solar power and other green energy could result in overhauled plants becoming “stranded assets” — something that becomes obsolete — over the next 13 years.

One senior LIPA official discussing the projection Thursday suggested the utility had so much power “optionality” that it could even retire plants such as one in Port Jefferson with little cost and at great savings.

“Life has turned out vastly different than we thought it would in 2010,” the LIPA official said, citing aggressive energy efficiency measures and the wide adoption of solar energy. “As you put more renewables on the system, the economics of base-load [gas-fired] power plants goes down.”

LIPA is expected by April to release state-mandated studies of overhauling the three largest National Grid plants. While the official wouldn’t discuss the conclusions of the report, he noted the utility has so many options about what to do in the future that “you should think carefully about it,” meaning repowering the old plants.

“The taxes are too high, even if the plants are repowered,” the official said.

Settlements sought

The disclosures come as LIPA has been on a campaign to reach settlements on the tax challenges it has filed in districts where the plants are located. Northport, Island Park and Port Jefferson get $76.6 million, $36 million and $28 million, respectively, because of plants located in their districts — plants that are used less and less.

The official broached the idea that the utility would have the option to retire a plant such as Port Jefferson under its long-term contract with National Grid, and could do so with little cost in terms of rerouting power lines to balance the power load. “We wouldn’t have to put a dollar into transmission to shut that plant down,” he said.

State Sen. Kenneth LaValle (R-Port Jefferson), whose district hosts one of the old plants, questioned whether the pending studies on repowering and on LIPA’s future energy needs will be credible. “I will be asking for legislative hearings in Senate and Assembly energy committees to scrutinize their data, which I have little faith in,” he said.

Suggesting that LIPA is “trying to use repowering as a tool to deal with the tax challenges,” LaValle added he and his constituents in Port Jefferson Village and Brookhaven Town “are not going to roll over and do things that are not in their best interest.”

LIPA in the past has offered settlements of the tax challenges that called for a ramp-down of tax payments for the plants.

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