Light dims — slightly — on EPCAL energy park plan

11/12/2014 11:45 AM |
Supervisor Sean Walter and councilman George Gabrielsen at a recent town board work session. (Credit: Barbaraellen Koch)

Supervisor Sean Walter and councilman George Gabrielsen at a recent town board work session. (Credit: Barbaraellen Koch)

The lights have been dimmed, but they’re not being turned off.

At least, not yet.

Plans to build at least one peaker plant at the Enterprise Park at Calverton — to produce energy that would be sold to the Long Island Power Authority — are now on hold. But much remains in motion while LIPA decides whether renewable energy projects at the Calverton site are worthwhile, a decision that will affect Riverhead taxpayers directly, since balancing next year’s budget hinges, in part, on lease agreements with private power vendors at EPCAL.

It’s still possible that all the proposed energy projects, which resulted from a competitive bid and are being evaluated by LIPA, may never be implemented.

After seeking bids last year aimed at strengthening the region’s power supply, Public Service Enterprise Group-Long Island, or PSEG, which operates the transmission system owned by LIPA, is expected to recommend that LIPA’s board of trustees wait until the end of 2015, after further evaluation of energy needs, to update some aging power plants in Nassau and Suffolk.

Riverhead Town has submitted at least one proposal at EPCAL, and possibly two, that could now potentially be delayed as a result. Many details of the proposals are confidential and unknown to the general public, so it remains unclear exactly how many projects are in limbo.

It was expected that the winners of the peaker plant and renewable energy bids would be announced at next month’s LIPA trustee meeting.

News of PSEG’s reluctance to sign up for more power plant construction was first reported over the weekend by Newsday and was confirmed Tuesday by PSEG spokesman Jeff Weir.

“We’ve recommended to [LIPA] to continue through the process, but not to enter into any commitments at this time,” Mr. Weir said.

In October 2013 — just months before PSEG took over day-to-day operation of the grid — LIPA issued separate requests for proposals for two distinct purposes: one to increase its renewable energy portfolio and another “to replace old and inefficient peaking generation with new resources that can be available for service no later than May 1, 2019.”

“Peaking generation” occurs at what are commonly known as peaker plants: smaller units that are fired up only in the case of emergencies or high-load times, such as a hot day in the middle of summer.

Riverhead Town Board members decided at the end of 2013 that they would offer private companies leases on land at EPCAL, requesting its own bids related to both RFPs and passing the best ones along to LIPA. Predicted revenue from capitalizing on EPCAL land — either through either lease agreements with power companies or outright sales of land — account for close to $700,000 out of next year’s $41 million general fund budget.

Supervisor Sean Walter said Tuesday that delays in the bid for newer peaker plants don’t concern him. Indeed, several renewable energy projects at EPCAL, as well as at the town-owned landfill, were pitched as part of a separate LIPA request for proposals that is continuing as scheduled.

“Is it unexpected? No, it’s not unexpected,” Mr. Walter said. “That is exactly what I would expect from LIPA. Luckily for us, all of our eggs are not in one basket. That’s a good thing.”

Councilwoman Jodi Giglio said she sees LIPA and PSEG backtracking on the peaker plants as a bad sign and would have preferred that the Town Board agree to balance its budget through more cuts rather than what she called “fictitious money.”

The general fund faces a $4 million shortfall next year and a proposed budget for next year will be voted on Tuesday.

“We can’t count on money when we don’t have anything in writing,” Ms. Giglio continued. “I’m a true believer in contracts, and right now we don’t have anything … I will vote no.”

Should the $700,000 from EPCAL land transactions — or one of any other “one-shot” measures — fail to come through, the town would be forced to dip further into its reserves, a practice so common over the past decade that the town is now left with just $1.5 million heading into next year.

Councilman George Gabrielsen has been pushing harder than any other Town Board member for an “energy park” at EPCAL comprising 96 acres, among all projects.

In addition to having proposed renewable energy projects remain in play, Mr. Gabrielsen said another plant could be eyeing the EPCAL site after its proposal met with a cool reception in Southampton Town.

He also pointed out that PSEG has identified the East End as a particular area in need of power upgrades, supported by PSEG’s Utility 2.0 plan released over the summer.

“The East End of Long Island represents the highest load growth region on Long Island,” the report states. “Currently there are approximately 40 MW of generating units built in the 1960s and 1970s operating on the East End. These units are in need of replacement.”

The councilman, a supporter of Mr. Walter’s budget — which appears likely to pass largely as-is — fancied himself more of a glass-half-full type.

“It looks like they didn’t pull the plug on the whole thing,” he said. “So that’s good news.”