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PSEG analyzes its power options amid reports there’s enough

Despite projections showing more than adequate power for

Despite projections showing more than adequate power for the next 12 years, special interests are pushing for new power projects. This is the Caithness I power plant at the Caithness LI Energy Center, in Yaphank on April 16, 2015. Credit: Newsday / Thomas A. Ferrara

As PSEG Long Island completes an analysis of the region’s power sources, special interests are pushing for a range of new power projects in the face of projections that the system will have plenty of excess power for the next 12 years.

The utility has been working for more than a year on the Integrated Resource Plan, which will analyze scores of prospective power options and include a breakdown of their potential impact on rates. Environmental groups want the plan to show a way to increase green energy; lawmakers are calling for new plants or repowering old plants; plant developers, to build new ones; and citizens groups, to keep tax payments steady.

Their wishes may come up against a glaring reality: Long Island already has plenty of power — in fact, there’s probably a power plant too many. What’s more, the excess is expected to swell over the next five years as demand levels off or declines, and previously planned projects go online.

Last year, PSEG released a preliminary study that found the Island had more than enough capacity to meet power needs for at least the next decade. Subsequent studies have pushed that out to 2028. On Friday, PSEG released the latest projections for power usage for the next 15 years, and the estimates provide a view of how much extra power LIPA built during the past decade.

This year alone, Long Island will have around 411 megawatts of excess power, according to the new projections. The excess increases over the next five years, to 488 megawatts by 2020, according to the estimate, which also projects a decline in demand between this year and 2020 of 104 megawatts. A megawatt powers about 800 homes.

“I suspect that the way PSEG presents the solutions, the decisions are going to be obvious,” said Matthew Cordaro, a former Long Island Lighting Co. executive who is now a LIPA trustee. LIPA trustees will ultimately vote on any plan. “They may lay out the priorities and the costs, the solutions are going to jump out at you. It may be obvious what direction they are going to move in.”

PSEG said that it has not come to any conclusions with the plan, and that the decision of what to do will be determined by Long Island stakeholders and state policy mandates.

“Providing a clear and transparent view of what’s needed will allow for all our customers to participate in the dialogue and have an input on what is in the best interest of Long Island’s energy future,” spokesman Jeff Weir said.

By late May or early June, PSEG will release its first findings. The plan is expected to examine 80 to 90 models of new resources and scenarios for the electric grid with figures showing each’s ability to meet demand, cost and impact on rates. The plan will build in assumptions such as lower costs for renewable energy, a continuation of tax credits, and a range of projections for natural gas pricing, PSEG said.

For months, PSEG has been meeting with stakeholders — some 25 meetings in all — to discuss the scope and parameters of the plan.

Still, some who have met with the company as recently as last month expressed concern about what the plan may contain, and leave out.

For instance, green-energy groups have pushed PSEG to closely examine the cost and feasibility of offshore wind, noting the recent extension of a 30 percent taxcredit that could reduce the cost. They also note that natural gas prices could skyrocket in future years, as they did in 2014.

At the same time, backers of the Caithness II power plant, a 750-megawatt natural-gas-fired facility proposed for Yaphank beside an existing facility, say the utility must invest in new cleaner-burning plants and retire dirty old ones, while lessening reliance on off-Island generation through several cables.

Earlier this month, a letter signed by state Sen. Thomas Croci (R-Islip), several Brookhaven elected officials and union leaders urged Gov. Andrew M. Cuomo to “green-light” Caithness II in PSEG’s review. “We cannot allow bureaucracy and narrow self-interest continue (sic) standing in the way of a project broadly supported by the local community,” the letter stated, in an apparent jab at PSEG.

Another contingent, including communities that receive large tax payments from LIPA, want to see the existing old plants overhauled and upgraded.

“I’m hoping they will produce a plan that will show us how we can get to the high level of renewables that we need in a timely way,” said Peter Gollon, energy chairman of the Long Island Sierra Club chapter, adding that he and others suggested the utility give wind energy the proper weight.

Dan Tomaszewski, president of the Longwood Central School board, called his meeting with PSEG a “sham.”

Tomaszewski is co-founder of the Coalition for a Brighter Long Island, a group that is backing the Caithness II power plant in Yaphank. The 750-megawatt plant, if built, would pay around $20 million in annual payments in lieu of taxes into the Longwood School District.

What he expects to be missing from the report is an examination of savings of retiring older National Grid plants, a scenario to which residents of the districts the plants are located in would likely object.

“Any evaluation that does not take into account the retirement of obsolete plants would reflect a clear bias on PSEG-LI’s part,” Tomaszewski said.

But PSEG said it has no bias in presenting the report. The company is “not going to show up and say, ‘There’s the answer.’ Instead, we’re saying, ‘Here’s the lay of the land,’ ” said a person familiar with the plan. “We hope it facilitates a discussion and we can come to a consensus on a path forward.”

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