Long Island Power Authority Chairman Kevin Law Wednesday said he will “terminate” a controversial project to install 40 wind turbines off the coast of Jones Beach, dealing a fatal blow to a plan alternately portrayed as an environmental necessity and an economic boondoggle.
The decision follows Law’s review of a recently completed independent report on the economics of the $700 million project that he said showed its costs to be “significantly” higher than traditional forms of energy generation or even a new energy-efficient plant. Legislators and citizens groups have criticized the plan since it was proposed in 2003, but a small cadre of environmental groups, some with financial ties to LIPA, had been among its most ardent supporters. Recently, even some of those proponents have expressed surprise at the soaring cost of the project.
Law emphasized that the decision, which he will discuss with trustees at a Sept. 22 LIPA board meeting, doesn’t mean an end to wind power proposals for Long Island. He will continue to pursue that source of alternative energy, he said, including possibly land-based windmills, at other locations. The Jones Beach location, he said, is off the table.
“While I’m a supporter of renewable energy, I’ve decided this project doesn’t make any economic sense, and I will recommend to LIPA trustees that we terminate it,” Law said in an interview with Newsday.
He said he’ll work with local wind-energy advocates, including Gordian Raacke of Renewable Energy Long Island and Neal Lewis of the Neighborhood Network, to research possible wind proposals that “make economic sense.” Law said he has already met with the groups to inform them of his plan.
Lewis Wednesday said he looks forward to going back to the drawing board on a wind-energy plan, agreeing the economics should have been discussed long ago.
“I think a number of things went wrong with the whole process,” he said. “We indicated years ago that cost issues should have been brought out in a more forthright way.”
Environmental activist Richard Schary, who has long criticized the deal’s unknown finances, said his concern had always been that the project “was not about the environment.”
Rather, he said, “it was about the money.”
Other long-time critics hailed Law’s decision.
“This is a victory for common sense,” said Babylon Supervisor Steve Bellone, who Wednesday announced an effort to block placement of a planned transmission cable from the farm through beaches in his district. “It’s a victory for the ratepayers of Long Island who ultimately would have borne the overwhelming burden of this costly, symbol project that ultimately would have delivered very little energy,” Bellone said.
When LIPA first announced the plan, it estimated the cost to be between $150 million and $200 million. But LIPA did not disclose actual costs until Newsday filed a Freedom of Information Law request last year. Initially, LIPA denied the request, but on appeal it provided limited and outdated information disclosing that from FPL Energy’s winning bid for the project in 2003 was $356 million. Newsday later reported that the cost had ballooned to $650 million by last October. LIPA, at Law’s request this summer, disclosed the December 2006 cost to be just shy of $700 million.
In an April 2002 assessment, LIPA consultant AWS Scientific estimated energy from the wind farm would cost between 6 and 9 cents per kilowatt hour, then well above the 4.5-cent average LIPA paid. At the time, LIPA said advances in wind-power technology were continuously lowering the cost, so that electricity from the wind farm would be competitive with electricity from traditional sources.
But analysis since then by Dowling College’s Long Island Economic and Social Policy Institute showed the cost would be more than six times that of standard power in the latter years of the contract.
Babylon supervisor Bellone by then had been banging the cost drum for more than a year, in August of 2006 calling the developer “the Halliburton of Wind Power.”
A spokesman for FPL Energy declined to comment, noting, “We have not heard from LIPA relative to their intentions on the offshore project.”
By Mark Harrington
22 August 2007
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