LIPA trustees on Wednesday approved the latest in a series of debt refinancings to take advantage of lower interest rates, as the authority prepares for a separate offering of $350 million in new debt that will lift overall borrowings to $7.9 billion.
The latest refinancing, set to take place in September, will result in up to $369 million in new securities at lower interest rates while retiring an equal amount of older, higher-interestdebt. When the transaction is complete, LIPA will have refinanced around $4.25 billion in old debt at better rates in a series of state-authorized moves to save some $484 million.
The separate $350 million in new debt LIPA plans to issue in October will be used to fund long-life system improvements. The new debt offering, approved by trustees last year, will increase debt to $7.9 billion from last year’s $7.73 billion.
LIPA chief executive Tom Falcone has said a LIPA 10-year plan will eventually lower debt levels by funding more of long-term projects from cash on hand rather than borrowings.
Separately on Wednesday, trustees approved a plan for the utility to partner with another state authority to work on offshore wind initiatives expected to place hundreds of turbines in the waters off Long Island.
Under a memorandum of understanding with the New York State Energy Research and Development Authority approved Wednesday, LIPA will commit staff to work with the state agency on planning, energy procurement and grid integration of the up to 2,400 megawatts of wind energy the state plans to purchase from projects by 2030.
Working on the presumption that LIPA will be a major connection point for some of the projects, LIPA and NYSERDA will study the effects on the Island’s electric grid, and the potential need for grid upgrades and quick-start plants for balancing the intermittent power of wind energy.
The agreement doesn’t commit LIPA to spending money on the effort, but LIPA eventually is expected to contract for upwards of 400 megawatts of wind-energy from NYSERDA-directed projects over the next decade. The first project, by Norway-based Statoil, could see more than 100 turbines in the waters off Long Island by 2025.
LIPA for its part in the state’s Clean Energy Standard, has already committed to between up to 367 megawatts of primarily solar energy projects, Falcone said.
Also at the board meeting, residents who live near a contested steel-pole project in Eastport railed against PSEG Long Island for failing to properly notify them of the project before it started, and for placing poles dangerously close to a “high-speed artery,” on County Road 51.
“You’ve compounded the problem,” said Roy Reynolds, president of the East Moriches Property Owners Association. Brookhaven Town last week filed suit against LIPA and PSEG over the project.