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Government Affairs Albany Update

October 19, 2001

Long Island Power Authority (LIPA) To Add New Electrical Generating Capacity

The Long Island Power Authority (LIPA) has announced its intention to add a total of ten new turbine generation units that will be put in service by next summer under LIPA's Powering Long Island Program. Five turbine generators will be placed in service by PPL Corporation and Calpine which will collectively supply Long Island with 203.8 megawatts (MW) of electric power by next summer, 159 MW will be generated by PPL alone.

The three turbine projects, which will be developed, owned and operated by FPL Energy in Far Rockaway and KeySpan in Port Jefferson and Glenwood Landing will add an additional 203.8 MW of electricity to Long Island's supply by next summer. Combined, the ten new turbine units will be capable of generating a total of 407.6 MW of electricity.

During early August of this year Long Island came within less than 100 megawatts of running out of supply. LIPA claims that if it does not add new on-island generation, it's almost a certainty they will have rolling blackouts next year if they experience the same conditions they did this summer.

Public Service Commission Chairman Maureen O. Helmer confirmed LIPA's need for new on-island generation. In a recent letter she stated that an analysis of the electric system conditions on Long Island on August 8-9, 2001 leads her to conclude that there is a serious and immediate need for an additional 400-500 MW of generating capacity to be constructed on Long Island by May 1, 2002. Without additional generation on Long Island, a repeat of the August 8-9 weather conditions could very well cause the need for load shedding/rotating blackouts on Long Island.

The following developers will locate the units at these Long Island locations:

PPL - 2 units at Shoreham and 2 at Brentwood for 159.8 MW
Calpine - 1 unit at Bethpage for 44 MW
FPL - 1 unit at Far Rockaway for 44 MW
KeySpan - 2 units at Glenwood Landing and 2 at Port Jefferson for 159.8 MW

Combined, all ten new turbines, which are being advanced under LIPA's Powering Long Island Project, will be capable of generating a total of 407.6 MW. Construction of all of LIPA's Powering Long Island projects is anticipated to begin in January 2002 with the facilities projected to be on line next summer. LIPA will purchase 100% of the power generated by the units for its customers.

Council Submits Testimony and Study in Support of Bethlehem Power Plant

On October 17th The Business Council submitted public testimony and a formal study, The Power To Grow, which details the need for more electrical generation in New York State and the need for the Bethlehem Energy Center (BEC), before representatives of the New York State Board on Electrical Generation and the Environment (the Article X Siting Board) at a public hearing held in Bethlehem, a suburb of Albany. The BEC will be a state-of-the-art, 750 MW, natural gas fired combined-cycle power plant.

The Council stated that the PSEG-sponsored Bethlehem Energy Center will add 350 new MW to the state's electricity grid. The proposal calls for increasing the plant from 400 MW to 750 MW. The project will bolster the electricity market, add to competition, increase jobs, and help both the state and local economies. The developers hope to have the natural gas fueled plant in operation by 2004.

Earlier this year, The Business Council filed comments with the State Energy Planning Board advocating for almost 10,000 MW of new generation in order to insure reliability and competition in New York's wholesale electricity market. Increased generation and competition will lead to lower prices and market reliability.

This summer The Council also filed for status as a party in two power plant projects seeking approval before the Siting Board. The Council requested party status in these cases in order to represent business and industry. The Council is the only statewide business advocacy group to represent the needs of business, industry and manufacturing in the process.

The web site for the Bethlehem Energy Center can be accessed here: http://www.bethlehemenergycenter.com/ for meeting agenda, registration form, and directions.