LIPA’s long-awaited review of current and future power needs cites a $5 billion price tag in recommending against an overhaul of two aging power plants and canceling a decision to build a large plant.
In a draft summary of a three-year study by PSEG Long Island, LIPA cited a sharp reversal of its previous expectations that demand for electricity would grow exponentially over the next two decades. Newsday has reported that LIPA and PSEG now expect demand to decline for the next several years, then increase only marginally by 2035. The difference in the forecast represents about 1,700 fewer megawatts — the equivalent of five power plants. A megawatt powers between 800 and 1,000 homes.
LIPA “does not need to add generation to meet load growth through at least 2035,” the report says.
Accordingly, “there is no compelling reason for LIPA to proceed with Caithness II,” a proposed $2.9 billion, 706-megawatt plant in Yaphank, “or the [Island Park-based E.F.] Barrett or Port Jefferson repowering projects” to modernize the two older plants. Repowering antiquated plants involves substantially replacing them on site with new, modern equipment.
Citing a separate assessment by consulting firm the Brattle Group, the study states that “none of the projects are needed for reliability or economic purposes.” The plan doesn’t rule out re-examining repowering plants in the future. A separate study to review repowering the Northport plant will begin next year.
Communities around the two power plants have been hopeful that LIPA would upgrade them to justify continued tax payments from the utility. LIPA is challenging the payments in court, saying the plants are overassessed and it wants to sharply lower the payments.
LIPA and PSEG found no need for additional generation, but they cited state mandates by Gov. Andrew M. Cuomo in doubling down on plans for new green energy over the next 20 years — about 800 megawatts of primarily offshore wind.
Neither the LIPA summary of the full (and unreleased) PSEG study nor LIPA officials who briefed Newsday last week gave any indication of the ratepayer cost of those new green energy power sources. A senior LIPA official said any such calculation “becomes too speculative” given declining turbine costs and the state’s plan to procure renewables for utilities.
Newsday this month reported that the 90-megawatt wind farm agreement LIPA recently signed with Deepwater Wind off the coast of Rhode Island will cost ratepayers $1.62 billion over its 20-year contract life.
The study notes that adding more wind power and other green resources “significantly” reduces the amount that the old power plants will be used, making repowering them even less feasible.
The study drew disappointment from those backing plant overhauls and praise from green-energy advocates.
Communities in and around the existing National Grid-owned power plants in Island Park and Port Jefferson had wanted the state-mandated studies to justify repowering the old gas-fired power plants. The study says that while technically and environmentally feasible, the upgrades are “not economic nor required” for system reliability.
Towns and school districts are fighting tax challenges by LIPA that seek to lower the nearly $200 million the utility pays each year for the plants collectively.
“I will continue to argue to LIPA that repowering Barrett makes sense,” said state Sen. Todd Kaminsky (D-Long Beach), whose district includes the Island Park plant. His argument: “For the next 10 years, we can either have an aging, dirty plant or — what I think is preferable — a repowered plant that is more efficient, friendlier to the marine ecosystem and resilient to storms.”
State Sen. Kenneth LaValle (R-Port Jefferson) said he plans to closely scrutinize LIPA’s calculations, including holding state hearings. “It doesn’t make any sense,” he said. The Port Jefferson plant “should be repowered.”
He also questioned the influx of renewables that are planned. “There’s something called the ratepayer who has to foot the bill,” he said. “Wind power is so costly the ratepayers here just can’t afford it.”
Green-energy advocates who have looked to LIPA to lead a revolution in renewables in the face of a warming climate and a Trump administration that is turning back climate-change advancements were ecstatic about LIPA’s recommendations.
“This is precisely the plan environmentalists have been advocating for over the last 15 years,” Adrienne Esposito, director of Citizens Campaign for the Environment, said in a statement. The report “validates our call for a transition away from antiquated energy technology to a modernization of our energy infrastructure in the 21st century.”
“Base-load plants don’t appear to fit our future needs,” at least under current forecasts, the senior LIPA official said, referring to fossil-fuel based plants.
The expectation that natural gas prices will remain low removes part of the incentive for overhauling those plants, because the fuel savings is exceeded by the combined $2.1 billion it would cost to rebuild the Port Jefferson and Island Park plants. The new Caithness plant would cost $2.9 billion, LIPA said. PSEG has previously said that plant alone would raise average monthly bills by around 6 percent, a claim Caithness disputes.
Developers and proponents of the proposed Caithness II plant are also losers in the LIPA recommendations, which call for canceling the award.
Ross Ain, president of Caithness Long Island LLC, saying he’d not been notified of PSEG’s findings, said, “I’m certainly disappointed they are not going forward with a project we felt and still believe has a lot of value for ratepayers, the environment and for economic development on Long Island, which continues to import almost half its energy from plants in Connecticut, New Jersey and upstate.”
The report notes that nearly all contracts for power will be up for renewal by 2030, providing an opportunity to shift more of the mix to renewables.
But that doesn’t mean LIPA will close any of the older plants. The study found that the Port Jefferson, Island Park and Northport plants are well-maintained and highly reliable, and are crucial to helping LIPA meet state requirements to have ample power.
The study “underscores the value of the existing plants,” said LIPA trustee Matthew Cordaro, who has written studies calling for overhauling the older plants. While perhaps not short-term, he said, “There’s still a role that repowering can play” on a smaller scale than originally studied.
LIPA and PSEG have more work to do. The plan calls for another study to look at the dozens of smaller so-called peak-power generators operating around Long Island, which are needed to fill power gaps in high summer demand times.
The study could conclude that these plants can be upgraded or replaced with more modern mini-plants, or with large battery storage units. Both would be more capable of quick startups, a useful trait with the abundance of intermittent energy resources like wind and solar projected for the grid.