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LIPA prohibited from holding wind farm project's lease

Two years after it began exploring a wind-farm project off the coast of the Rockaways, the Long Island Power Authority last week discovered that it cannot be the lease holder for the project because LIPA's own bylaws prohibit it from holding a lease in federal waters.

LIPA chief Kevin Law Thursday confirmed that a legal review following a meeting with federal officials from the U.S. Interior Department's Minerals Management Service, which regulates energy projects in coastal waters, found that LIPA "can't own real estate outside the borders of New York State."

Law said the finding has "no impact at all" on whether it ultimately moves forward with the project.

"We are an equal partnership between, LIPA, Con Ed, New York City and the New York Power Authority," Law said. "It doesn't matter who gets the lease as we will be doing a joint [request for proposals]."

But the finding could mean that NYPA takes a larger role in the wind farm than was originally envisioned. NYPA is run by Richard Kessel, the former LIPA chief whose vision of a wind farm off the coast of Jones Beach was ultimately tanked by opposition. NYPA has no such restriction on whether it can hold a lease in federal waters.

Law shelved the project when he took over LIPA in 2007.

"We're certainly aware of the issue and trying to work through it," with LIPA and Con Ed, Kessel said Thursday. "We are looking at some of the legal questions as to what NYPA's role could be in the project."

Kessel added, "This project was started by LIPA. I think they deserve a lot of credit for it and we want to be as helpful as we can be."

Law said LIPA and its partners always envisioned that an outside company would ultimately build the wind farm, and LIPA and Con Ed would enter into a contract to buy wind energy.

The Rockaway wind farm envisions turbines placed up to 15 miles off the coast, a distance that reduces the visual impact that, some say, fueled opposition to the Jones Beach project, which was to be 3 to 5 miles off the coast. But the decision to move into federal waters inadvertently pushed the project out of LIPA's ability to hold the lease.

The Jones Beach project would have been in state waters, where LIPA could have been the lease holder.

The LIPA-Con Ed wind farm initially envisioned 100 turbines off the coast, producing some 300 megawatts of power. The two companies conducted research that showed the cost to upgrade existing infrastructure and connect it to the farm could exceed $800 million - around the estimated cost of the Jones Beach project.

Law said for the Rockaway project to move forward, NYPA or Con Ed will have to take ownership of the lease."Somebody has to control the ocean bottom - it won't be LIPA," he said.

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