The Long Island Power Authority Board of Trustees quietly took action earlier this month to renew a contract with National Grid for 12-15 years, which has the Sierra Club howling.
Sierra Club argues that this action – seemingly benign and intended to assure Long Island that the lights will stay on after the May 2013 expiration of the current contract – locks Long Island into an energy future for the next generation based on “dirty, dinosaur, polluting” fuel, rather than more earnestly, urgently and aggressively transition to renewable energy in the same time frame.
“This decision sets the course for Long Island’s energy future to be largely dependent on fossil fuels. It could make it more difficult for LIPA to enter into future contracts for clean energy sources like offshore wind, even though recent polling shows that Long Islanders overwhelmingly favor clean energy rather than fossil fuels and would even be willing to pay more for it,” Sierra Club stated.
“It is not only disappointing, but reckless for LIPA to decide to enter Long Islanders into more long-term dirty energy contracts without fully exploring, in an open and transparent way, the long-term impacts on its customers bills and the full benefits of clean energy,” stated Lisa Dix, New York senior representative for the Sierra Club.
“Clean, renewable energy like offshore wind must be part of Long Island’s future if we want to be leader, meet our renewable energy commitments and ensure we have cleaner air and a strong economy. Now is the time to make clean energy a reality, not double down on dirty and dangerous fossil fuels, Dix said.
How different from just a few months ago, when LIPA was being hailed for its strong advocacy of off-shore wind.
What the Sierra Club is particularly upset about is the process by which LIPA came to this agreement:
“Instead of waiting until 11th hour until these extensions would expire, they could have done a planning process where they kept their most efficient and cost effective plants on line to supply current power, ramp up efficiency programs to help get energy demand down, and put renewables online and start the transition,” Dix told me. “Instead, they just punted the decision of how we are getting the transition to renewables. They needed to extend these contracts because they waited until last minute, and we on Long Island are going to have to live with these dirty-polluting contracts, while development of renewables is taking a back seat.”
Instead, she insists, this decision by LIPA means that Long Island “will continue to go in same direction for 15 years- almost a generation…. They are locking ratepayers in, where cost for fossil fuels is unpredictable. Locking us as ratepayers into over a decade of a dirty energy future.”
LIPA vigorously contradicted the charge, reaffirming its commitment to cultivate renewables, saying that the new agreement gives LIPA the ability it did not have in the prior agreement to take dirty, inefficient plants off-line while pursuing conservation and clean energy.
“The agreement is not in lieu of renewable energy or other resources, and in fact positions LIPA to further develop its energy portfolio with an emphasis on new and cleaner more efficient generation, improved energy efficiency, and new renewable energy resources, which together would provide significant economic value and environmental benefits,” LIPA states in a fact sheet describing the agreement.
This agreement “assures that National Grid will continue to invest the capital needed to maintain these plants and comply with applicable environmental laws and regulations, while providing LIPA options to selectively repower or retire plants when such plants can no longer be operated economically.
“The agreement provides the opportunity to strategically and selectively remove or replace existing generation in an orderly fashion….
“The agreement establishes procedures to evaluate the feasibility of a potential repowering of the Port Jefferson, and Barrett (Island Park) and Northport steam plants, as well as the Barrett and Holtsville combustion turbine sites. Any subsequent repowering would be based on the results of an economic study and subject to a mutually agreeable power purchase agreement between National Grid and LIPA, a separate environmental review, and LIPA Board approval. It also establishes a potential phase-out schedule for any plants that cannot be repowered or that fail to continue operating economically.”
As to how continued operation of National Grid’s plants impact the environment, LIPA states, “National Grid’s plants operate primarily on low-emitting natural gas and meet all applicable environmental requirements. Since the plants were acquired in 2007, National Grid has invested $100 million in partnership with LIPA in the Northport, Barrett and Port Jefferson steam electric power plants to improve fuel efficiency and reduce emissions. These and other efforts have resulted in NOX, SO2 and CO2 emission reductions at these facilities of 67 percent, 89 percent and 44 percent, respectively, making them among the cleanest one-third of steam electric plants in the country.
“The repowering options within the agreement provide opportunity for even further reductions in environmental impact and improved fuel efficiency. In addition, National Grid and LIPA continue to work together to research and develop cost-effective solutions to best mitigate marine organism impacts associated with plant water-cooling systems. These efforts have led to significant investments in water-cooling infrastructure improvements. The provisions of the agreement for repowering bring even greater opportunities for minimizing and even eliminating marine impacts.”
Here’s how LIPA describes its efforts to reduce dependency on fossil fuels:
“LIPA continues to be a leader in energy efficiency and renewable energy development,” the company states. It points to its Clean Energy Initiative which reduced demand by 166 megawatts between 1999-2008, and a new 10-year, $924 million Efficiency Long Island (ELI) investment program designed to reduce peak demand by 520 megawatts by 2018 (basically, this would allow Long Island to keep pace with its utility demands without building new plants).
So far, LIPA has invested $240 in ELI and renewable energy projects, which so far have reduced demand by 130 megawatts.
Most dramatically, LIPA initiated the largest utility-scale solar photovoltaic (PV) project in New York State, contracting for up-to 50 MW in a public-private partnership, and was the first utility in the State to offer a solar PV feed-in-tariff which is expected to add an additional 50 MW of solar PV to the grid by 2014.
So, if you have been keeping count, in total, LIPA has reduced peak demand by over 300 MW as a result of its efficiency and renewable programs since 1999, which is equivalent to one medium size power plant.
We spoke with Paul DeCotis, LIPA’s Vice President-Power Marketing and the lead negotiator for the power supply agreement (PSA), who explained LIPA’s position this way:
“The contract expires May 2013. Clearly there is not efficient alternative to substitute by that service date.
“We had the right to extend the power supply agreement and we chose rather than extend it, to renegotiate for better terms and conditions.”
These better terms include lower cost – a $10 million savings over 5 years ($2 million a year), with additional savings possible; an option to repower existing generation generator (which means that National Grid can take out old generation and put in new); and most significantly, the option to remove generation from the contract – 15 year nominal contract, right to end after 12 years, and because have ability to take generation out of the contract where appropriate and necessary (obligates National Grid to provide the generation, but LIPA can retire generation that is no longer needed).
“This is not a choice between renewables or nonrenewables,” DeCotis told me.
He reaffirmed LIPA’s commitment to a 10 year, almost $1 billion efficiency program, and continued commitment to add additional renewable energy resources.
“But even if we had 1000 megawatts of renewable energy, when the sun is not shining and wind not blowing, still need [fossil fuel to turn the turbine].
Well, that shows that Sierra Club is right to be skeptical and concerned, because it means that LIPA does not have a plan to completely replace fossil-fuels, or even have renewables generate the majority of the power, but in its planning, renewables are always a small fraction of the total mix.
But Sierra Club is more skeptical about what the agreement means for LIPA’s future direction and the facts suggest Sierra Club is right to be concerned because it does not seem that LIPA every intends to make renewables the majority source to fuel our electricity needs. Instead of fossil fuels being the emergency back up when the sun doesn’t shine or the wind doesn’t blow and batteries are not perfected enough to store up the energy needed to get over that hump, renewables is seen as a pretty bow to add on to the energy infrastructure.
So far, there are only 100 megawatts worth generated by renewables (mainly solar), out of the 3700 megawatts needed to supply Long Island’s needs.
The only off-shore windpower project that LIPA is pushing for – the one off of the South Shore – would generate 350 megawatts, or at most 700 megawatts (and not all would go to Long Island, it would be shared with New York City).
When you mentally count up where LIPA is going with renewables, you may get to some 1000 out of 4000 megawatts generated through renewables.
LIPA’s agreement with National Grid gives LIPA the safety and security to know that its mission to supply Long Island’s electricity needs will be met through conventional ways, so why go forward?
This is further confirmed by the caveat that is always added to any discussion of renewables: “fiscally responsible.”
“We are always worried about the energy mix,” DeCotis told me. “We want to have clean, environmentally friendly, efficiency, and fiscally responsible.”
Those who approach this from an environmental point of view – global warming and public health – do in fact want zero dependence on fossil fuels, but recognize that we will never get to that point unless we commit to changing our energy infrastructure and our energy economy.
And that will require a different way of evaluating what is “fiscally responsible.”
