LI has more excess power than projected, PSEG LI says

Long Island has even more excess power than previously projected, enough to forestall the need for a big new generating plant until 2028, according to an updated analysis by PSEG Long Island.

The new projection is up to four years longer than previously estimated, PSEG said, and gives the utility greater flexibility as it works to plan for the Island's energy needs. PSEG last year found that the Island had enough excess power to push back the need for a big new plant until at least 2024.

It could result in hundreds of millions of dollars in "avoided costs" if traditional ways of meeting power needs can be delayed or replaced by less expensive, greener ones, according to PSEG Long Island president and chief operating officer David Daly.

"It has a direct impact on the ability to delay [new construction] and lower costs," Daly said. "It's avoided cost. . . . By pushing it out you're really just avoiding need and need is cost."

Revised outlookIn an interview Friday, Daly cited as reasons for the change in outlook: updated economic analysis, the company's continuing long-term assessment of the region's power needs, and an influx of measures to reduce user demand and to expand green-energy sources such as solar. Just this year alone, PSEG has seen more home solar power installations than LIPA had in the first decade of the program.

The updated power conclusions, which Daly stressed are preliminary and would be finalized by year's end, provide PSEG with more flexibility as it works on an integrated power resource plan to determine the best mix of power sources for Long Island over the long term.

Before PSEG took over management of the grid, LIPA had planned to build a new 750-megawatt plant -- called Caithness 2 -- that would have started operating in 2018, while beginning repowering projects to upgrade at least one older National Grid plant. PSEG in 2014 requested that those plans be suspended until it finished its review of the Island's power needs, which will be finished early next year.

The review gives PSEG tools to analyze current energy sources, including the need for a network of smaller power plants that operate sporadically and, in some cases, inefficiently. Daly said there are 18 such plants on Long Island, providing a combined 930 megawatts of power, chiefly during peak need times. Many of the plants, which range from 9 megawatts to 92 megawatts, have contracts with LIPA that expire over the next five years.

"They are older, they are dirtier, and most of their contract end dates are in the next five years," Daly said. As a result, PSEG may be "able to take advantage of having some of these units roll off and not having to replace them."

The excess power scenario also gives the utility "more flexibility on repowering," or overhauling older plants owned by National Grid "if you decide that's what you want to do," Daly said.

Inroads for green energyThe new figures also could allow green energy alternatives to make greater inroads into Long Island's energy portfolio, according to experts told of the findings.

"It's really good news," said Gordian Raacke, executive director of Renewable Energy Long Island, a green-energy advocate. "It confirms that there's a paradigm shift in the electric utility field and it buys us more time to bring more renewables online."

Daly said that's already happening. This year, PSEG's efforts to improve efficiency and introduce new solar is expected to produce the equivalent of 82 megawatts of reduced demand. Much of it has come from a boom in home solar rooftop installations, more than 12,000 so far this year.

Since 2009 PSEG and LIPA have seen 400 megawatts of reduction from renewables and efficiency, Daly said. PSEG also has been using a LIPA-initiated system that remotely cycles down central air conditioners during peak times, reducing peak demand by 30 megawatts each time it's used.

As Newsday reported last year, LIPA in the mid-2000s, after several years of outages and tight energy supplies, began an aggressive process of contracting for new energy sources, including numerous small "peak" power plants, a 660-megawatt cable under the Atlantic, and a 350-megawatt power plant in Yaphank called Caithness.

PSEG found last year that LIPA's planning for power needs went well beyond the industry standard for a cushion of extra power -- enough to lower the likelihood of an outage due to inadequate power to once in 1,000 years. Most utilities plan for such an outage every 10 years.

Between 2005 and 2013, PSEG found, LIPA had an average of 528 megawatts of excess power annually above state capacity requirements -- the equivalent of nearly two new power plants. Some years, the report said, the excess approached 1,000 megawatts. A megawatt powers around 800 homes. PSEG said the average cost of the 528-megawatt excess was around $71 million a year, or around $641 million over the nine years.

Analysis pushbackSome have been critical of PSEG's power analysis and delays in building a big new plant. Caithness Long Island Energy and its supporters, including a school district and labor unions, have charged that PSEG's analysis is self-serving and would result in more energy being imported over power cables from Connecticut and New Jersey, where PSEG owns plants.

"That's not the case at all," said Daly, noting that PSEG sources comprise a small portion of the available power from the cables -- less than 5 percent from the New Jersey side, for instance. "We have no ability to profit from those economy [cable] purchases" by LIPA.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.