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South Fork power upgrade to cost $3.67 a month per LIPA ratepayer

Improving power supply to the South Fork will cost all Long Island ratepayers $3.67 a month each by the time several phases of a PSEG Long Island project to address a looming shortage are completed by 2026, according to documents released by LIPA this month.

LIPA and PSEG have tentatively selected a portfolio of technologies, including a 15-turbine wind farm off Rhode Island, to address a worsening power shortage in the Hamptons. The new technologies, which include 5-megawatt storage batteries, measures to reduce customer usage by around 8 megawatts and temporary generators, will cost all ratepayers $1.19 a month, according to the LIPA documents.

But the solution also will include an array of grid upgrades necessary to improve reliability on the South Fork and to accommodate the new wind power, which would enter Long Island at an interconnection point in East Hampton, according to the documents. Those upgrades will cost ratepayers around $2.48 a month to pay a construction bill of around $500 million by 2026. Most of the work will be complete in 2022.

The wind farm, if ultimately approved by LIPA, isn’t expected to be operational until the end of 2022. LIPA trustees have yet to vote on the proposals, despite a scheduled vote at the end of July, which was postponed because the state wanted to complete a “blue print” for an eventual offshore wind “master plan.”

The blue print was completed earlier this month, but LIPA trustees did not vote on the South Fork plan last week. It could come before the board at its Dec. 21 meeting.

The LIPA documents suggest that despite the high costs, the South Fork solution comes with “avoided costs” that make it the most economical of a number of projects it had reviewed.

The cost of the portfolio is estimated to be $67 million to $90 million a year. By deferring the $500 million investment of the new grid enhancements, LIPA estimates it’s avoiding $11 million to $37 million in costs. It also estimates avoiding tens of millions of dollars for other renewable, capacity and energy costs.

LIPA will begin requesting money from ratepayers to fund the new programs beginning next year. The board will be asked to approve $8.9 million in the 2017 capital budget, and $45.3 million in the 2018 budget. Every $36 million of revenue collected by LIPA represents a roughly 1 percent bill increase.

Several LIPA ratepayers attended a board meeting last week to voice objections to the plan’s reliance on gas- or diesel-powered temporary generators to help fill a power shortage through 2019.

The new transmission upgrades include a new power line in Southampton from the Canal substation, replacement of an overhead line on the Wildwood to Riverhead line, a new underground circuit from Buell Lane to Bridgehampton, and upgrades within substations in Amagansett, East Hampton, Hither Hills, and Culloden Point. All that work will be completed by 2022.

A final project calls for a new Canal-Wainscott circuit to be added by 2026.

David Daly, chief operating officer of PSEG Long Island, said the new state clean-energy standard and LIPA’s previous commitments to build some 400 megawatts of renewable energy into the system make the portfolio proposed for the East End viable.

“It comes back to policy,” he said. “Given the clean-energy standard and how you think about implementing that, this was a good integration of these two projects. The technical analysis pointed to this as the best solution.”

That would not have been the case without the LIPA renewable mandate or the state standard, which LIPA has yet to fully approve, Daly said. “If you didn’t have the requirement of the clean-energy standard, you would not have selected this solution,” he said.

State policy aside, the best solution, he said, would have been to do the transmission upgrades now.


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