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Caithness Energy LLC

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The Port Jefferson Power Station may soon be repurposed. Photo by Alex Petroski

The Village of Port Jefferson is soon putting a lengthy legal battle with Long Island Power Authority in its rearview mirror, though the future of the property that houses Port Jefferson Power Station is still on the road ahead.

Bob Foxen, chief executive officer of Global Common LLC, a company dedicated to establishing energy partnerships and projects beneficial to its clients, was contracted by the village to study alternative future uses for the site. He presented options to the village board of trustees during a brainstorming session at a public meeting Sept. 17.

“I guess the goal is to try, to the degree possible, to make the people of Port Jefferson whole, or close to whole, assuming they lose some tax revenue,” Foxen said during his presentation.

Village Mayor Margot Garant expressed an interest for the village to formulate a plan of action for the site.

“Once we have our tax grievance settlement behind us, or we know that we’re at kind of a pause, the next question is ‘Now what?’” she said. “We want to advocate for a repurposing of the site to keep us viable on the grid.”

The village is among the municipalities preparing to imminently announce settlement terms with LIPA to resolve near-decade-long litigation regarding the property tax assessment of the plant, which the utility has argued is too high based on decreasing energy demand. Port Jeff has advocated for the refurbishment and repowering of its baseload plant to update its decades-old technology and to justify the property’s tax assessment.

By 2027, the power purchase agreement between LIPA and National Grid expires, and to resolve the tax certiorari challenges, LIPA negotiated with the village a nine-year “glide path” for tax revenue reductions to coincide with the agreement expiration, according to village attorney Brian Egan. The glide path includes gradual percentage reductions in assessed valuation on the property, deeming baseload repowering an unlikely future outcome. In addition, Caithness Energy LLC’s 2014 plans to construct a new 600-megawatt plant in Yaphank were revived temporarily by Town of Brookhaven’s town board this past summer, though the expiration of the company’s special-use permit for the site has put the plans back in doubt. If constructed, the Yaphank plant would further cloud the future of the Port Jeff plant.

Foxen admitted the options he brought ready to present during the meeting were dependent on Caithness II never getting off the ground, an outcome that is very much in doubt. The options also consider New York Gov. Andrew Cuomo’s (D) stated goal from 2016 that 50 percent of the state’s power come from renewable sources by 2030.

The consultant suggested turning the site into a 200- to 300-megawatt plant powered by peaking units or smaller energy generation systems capable of firing up only in times of high demand, as its best option. The units operate using gas or liquid fuel, though they are viewed as efficient supplements to renewable energy sources like wind and solar, which can’t handle demand on their own.

“I think it does help support renewables,” Foxen said of peaking unit plants, adding that financing the work needed to repurpose the site in this way would be hard to establish without a new power purchasing agreement with LIPA. Village officials are set to meet Sept. 20 with representatives from private Finnish company Wartsila to discuss the feasibility of installing peaking unit technology at the Port Jeff plant.

Foxen’s other brainstormed options included establishing the village as a municipal electrical utility, meaning it would assume control of energy distribution from the plant to customers to power homes, though he called the option costly and time consuming; and taking over energy distribution and limiting it to private customers at a reduced rate for businesses in specific industries that have high-energy demand, like data storage centers, for example, which could even be housed on the vacant site.

“It would be kind of an interesting magnet for a data center or somebody like that — saving money on energy might be a draw,” Foxen said.

Brookhaven Supervisor Ed Romaine and the town board have taken steps that would allow the construction of a power plant in Yaphank, complicating the status of Port Jefferson's LIPA-run plant. File photos by Alex Petroski

It’s one step forward, two steps back for Caithness Energy, LLC in Brookhaven.

After securing a win in its efforts to advance the construction of a 600-megawatt power plant in Yaphank earlier this month, Caithness Energy LLC, an independent, privately held power producer informed by Brookhaven Town its special use permit for the site expired July 15.

The special use permit, initially approved in 2014,  granted Caithness permission to build a power plant on the site, according to Town Attorney Annette Eaderesto. It was granted for two years and  one-year extensions were approved twice, which is the limit under town law.

“We’re looking into it, but believe it has no bearing and we look forward to the next steps before the Planning Board,” Caithness President Ross Ain said in a statement.

The possibility that the permit might have expired was first raised by Councilwoman Valerie Cartright (D-Port Jefferson Station) during a July 12 meeting. She abstained from voting on a motion to lift a restrictive covenant preventing the project’s advancement due to amendments made to Caithness’ original 2014 plans, which included a reduction to the plant’s output capacity and updated technology. The other five councilmembers and Supervisor Ed Romaine (R) voted to remove the covenant.

“They’ll have to file a new application for the special permit and we’ll certainly accept it,” Eaderesto said.
The town attorney noted Caithness still has a pending site plan application before the Planning Board, which would remain as such as a new special use permit is sought.

The proposed project has drawn opposition for its potential environmental impact from groups like Sierra Club Long Island and state Assemblyman Steve Englebright (D-Setauket).

In addition, Port Jefferson Village Mayor Margot Garant has spoken out against the proposal, warning the construction of a second Caithness plant could push her community “off the economic cliff.”

The village has argued a way to make good with Long Island Power Authority over its decreasingly needed plant — and LIPA’s legal contention its Port Jeff plant’s property tax value is over-assessed and has been for years — could be to increase its output capacity. If constructed, the Caithness II plant, which would be built nearby the company’s first Yaphank plant opened in 2009, could theoretically kill plans to repower the Port Jefferson plan, according to the village.

Port Jeff Village and the town have said a settlement is nearing in an eight-year-long legal fight with LIPA, that will likely result in a gradual decrease in revenue from the plant’s property taxes, which help fund budgets for the village, Port Jefferson School District, the fire department and the public library.

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