LIPA capacity issues lead some to call for repowering older power plants

LIPA headed off a short-term power deficiency by retrofitting power plants and re-upping undersea cable contracts, but a longer-term deficiency looms, according to a recent state filing, leading some to intensify the call to overhaul Long Island’s biggest, oldest plants.

In a letter to the Public Service Commission in August, PSEG Long Island, writing on LIPA’s behalf, described how the utility had retrofitted three small power plants in Shoreham and Glenwood Landing to allow them to be powered up this summer using a technology known as water injection, which cools the plant and reduces emissions to within state standards.

The utility also entered into a new contract for 345 megawatts of capacity over the Cross Sound Cable, and it extended a contract with the Neptune cable owners to provide its 600-plus megawatts of capacity through 2030, a decision the Long Island Power Authority later filed a federal complaint over to object to its 50% cost increase.

The combined moves addressed what the state grid manager saw as a potential capacity deficiency of some 254 megawatts by 2030, ensuring that LIPA will keep the lights on by showing that it has agreements in place with power generators in the event of spiking summer demand. Capacity contracts are essentially lease agreements that ensure LIPA has sufficient potential to meet demand on the highest peak days. LIPA pays separately for energy from the plants depending on grid conditions and demand. 

But the short-term fixes don’t fully address what could be a looming shortfall of upward of 500 megawatts by the middle of the next decade.

“There are significant uncertainties regarding load forecast, in service dates of new projects, reliability of aging generation, generation retirements, contract extension and continuous changes in reliability rules,” PSEG wrote in the letter.

For that reason, National Grid Ventures, which owns and operates the fleet of large and small fossil-fuel plants across Long Island, says the urgency increases each day to begin the process of repowering the largest plants. Such a move, the company says, would avoid a growing backlog of demand for power plant equipment caused in part by frenzied interest in data centers.

At the same time, National Grid says, Long Islanders would benefit sooner from an agreement to power the plants through reduced emissions, lower power costs and potentially increased tax bases in communities that host the plants, all of which are over 50 years old.

“We certainly think repowering is a necessary solution,” said Will Hazelip, president of National Grid Ventures. “We think it needs to be a live option that’s being developed today.”

Demand for the power turbines and other equipment needed to repower has “gotten very tight,” Hazelip said. “We think it’s critical to move forward to reserve equipment as quickly as possible.”

LIPA and PSEG are in the midst of a yearlong study of the Island’s power needs and expect to complete it next year.

LIPA spokesperson Michelle Livingston declined to comment on specifics of LIPA’s future power options, including whether the utility would pursue repowering of old plants. She said the resource study “will consider all resource options needed to meet Long Island’s future energy needs while maintaining reliability and affordability.”

In at least one case, National Grid could increase the capacity of the E.F. Barrett plant in Island Park, if a transmission project known as Propel NY Energy, a 90-mile series of cables from Long Island to Westchester and the Bronx, is approved and completed. National Grid is a partner in Propel developer NY Transco.

Hazelip said waiting for the LIPA study could be costly. “If we were to reserve turbines this fall, say, that’s [arrival by] late 2030 or 2031 for delivery. If we waited another year, that could be 2033 or 2034, and we’d need a couple of years to install” and get the plants operational, he said.

John Howard, a former PSC chairman, said the combined moves, while probably necessary, will not be cheap. “There’s no free lunch,” he said. “The dilemma is, once we see what’s necessary to build a reliable system work, we’ll say, 'Holy smokes, it’s expensive.' ” Hazelip has said consumers could benefit from repowered plants, which are more efficient and can result in savings. 

Current cost estimates of the projects past and future haven’t been discussed, though LIPA a decade ago predicted repowering the big plants would hit ratepayers with a price tag of $1 billion to $2 billion per plant.

LIPA’s work securing additional resources this year has helped address the short-term crisis, but the New York Independent System Operator, the state grid manager, has been pushing for downstate utilities to do more, even as other challenges loom, according to the filing.

For LIPA, those challenges include expiring contracts for two other small National Grid power plants, in Port Jefferson and Glenwood Landing, which, if new terms aren’t worked out, could see their combined 108 megawatts out of LIPA’s reach. There’s also a legal requirement that a New York Power Authority power plant in Brentwood rated at 47 megawatts be deactivated by late 2030, according to PSEG's letter. And, if not repowered, the large National Grid plants could be “derated” by the state’s grid operator, given their age of 50-70 years and what could be reliability issues because of that status.

The wild card in the mix, according to the PSEG letter, is the prospect that LIPA could see new large electric-demand customers come into the region, once a state moratorium on data centers expires next year. Already one data center company has proposed a 176-megawatt project in Yaphank, which would require the equivalent of half the output of the Caithness Long Island power station in Yaphank.

Even uncertainty around Propel NY Energy could upset LIPA’s plan. “Under a conservative planning scenario, by 2036,” the letter states, the Long Island-region energy capacity deficiency “could exceed 500 megawatts.”

Any repowered plant, which could involve building a new facility on the old plant grounds while eventually powering down the old, would still require a series of approvals by the state. National Grid is already engaging local communities.

“Initial discussions around repowering have been positive,” Hazelip said, though he acknowledged the company has not been able to discuss specific tax implications of re-upping a plant contract rather than following prior plans to retire the plants, which led to local tax-payment reductions by LIPA.

Hazelip wouldn’t say specifically how much larger the power output of the Barrett plant would be if it were repowered and Propel is built, but said Propel “does allow for additional megawatts to be added there.” Higher capacity at Barrett, he said, could help LIPA address the 500-megawatt shortfall expected in 2036.

“If we want to add more megawatts to address that 500-megawatt deficiency in 2036, we do need transmission system upgrades, and Propel, for Barrett, would be one of those upgrades,” he said.

Bruce Kennedy, administrator for the Village of Sea Cliff, which has raised numerous objections to Propel, said the LIPA filing raises questions about the necessity of Propel in light of repowering. 

"First we create the appearance of a sick grid by assuming legacy generating plants will be retired or unavailable, then we prescribe Propel as the cure," he said in an email. "But now those very plants are being retrofitted, contracted and kept in service — and suddenly the immediate reliability 'illness disappears." 

"A possible future deficiency under uncertain planning assumptions is not the same thing as demonstrating a present, project-specific need for a $3.26 billion transmission project," he said. 

Repowering would not impact LIPA’s plans to continue to inject renewable energy into the grid, Hazelip said.

“We should be focusing on having fossil fuel generation there as a necessary backup, and the state energy plan recognizes that, and repowering is a great way to ensure that that’s there,” he said. “We also have to continue to add renewables to the system so that the fossil fuel plants run less and less over time and bring emissions down that way.”

Hazelip said the Port Jefferson power station, the smallest of the three baseload plants, also may have a repowered future, potentially to provide available backup to the Sunrise Wind project when the wind isn’t blowing. He noted that National Grid’s East Hampton plant has continued to operate this summer even with South Fork Wind farm producing well.

“It highlights that even with renewables, you still need fossil fuel power generation to keep the system reliable,” Hazelip said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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