LIPA will resolve a looming South Fork power shortage through an offshore wind farm, $500 million in transmission-system upgrades, two large batteries and temporary gas-powered generators — at a cost to average ratepayers of around $1.20 a month, officials said.
LIPA will ask its board of trustees to allow it to negotiate a contract to buy energy from a 90-megawatt wind farm to be built by Deepwater Wind 30 miles from Montauk Point, according to chief executive Thomas Falcone.
The state late Tuesday asked LIPA to postpone a board meeting scheduled for Wednesday and LIPA agreed.
Falcone declined to specify the cost of the contract, which he said could be finalized by sometime early next year. But he said the $1.20-a-month cost for average customers when all the proposals are in place was the least expensive of several other proposals. The wind farm would be operating by December 2022.
At 90 megawatts, the Deepwater Wind farm would be considerably smaller than a 350- to 700-megawatt project LIPA has already proposed for the waters off Long Beach, which the New York State Energy Research and Development Authority recently took on as lead state agency to bid on a lease. The Deepwater project, in federal waters off Rhode Island, already has secured a lease.
The South Fork power recommendations, which LIPA will take up at a trustees meeting in Uniondale, follows months of analysis of dozens of proposals by PSEG Long Island and review by the state Department of Public Service.
The South Fork solution includes 8.3 megawatts of demand reduction, which offers incentives to customers to install special thermostats so the utility or a contractor can remotely adjust the temperature during peak-use periods.
Even as LIPA moves forward to negotiate a wind-farm contract, PSEG will begin a series of system upgrades that will help reduce bottlenecks and allow power from the proposed wind farm to flow westward on the grid when the East End doesn’t need it. The cost of those transmission system upgrades, including four new underground cables and upgraded substations, is just over $500 million by the time they’re completed in 2026.
“With the transmission upgrades it [power from the wind farm] can be transported across the system,” Falcone said. He said the plan will also require “temporary” fossil-fuel generators in East Hampton and Montauk until 2019.
The cost of the solutions is from $67 million to $90 million a year after the wind farm and other technologies are completed. The net customer bill impact is $2.48 a month, though LIPA said the incremental bill impact is $1.20 a month.
LIPA staff’s selection of the wind farm drew praise from environmental groups such as the Sierra Club and Renewable Energy Long Island. Gov. Andrew M. Cuomo in a statement said he “strongly encourage[s] the trustees to once again demonstrate New York’s leadership on climate change” in approving the wind farm.
Not all groups were pleased. Bonnie Brady of the Long Island Commercial Fishing Industry said, “I think LIPA is under a lot of political pressure to make things happen, but I think LIPA still has a duty to represent Long Island and our coastal fishing communities, and Long Island consumers who would be expected to pay much higher prices, for a feel-good measure that has nothing to do with the facts of industrialized offshore wind energy on our ocean waters.”