State-Mandated Study Finds Retiring Portion of Northport Power Station in 2022 Will Save LIPA Customers $300 Million

REPORT EXPECTS CONTINUED DECLINE IN NORTHPORT POWER STATION USE FROM 55% OF PLANT CAPACITY IN 2005 TO 2.9% BY 2035

UNIONDALE, NY - May 19, 2020 — The Long Island Power Authority today released a New York State mandated Repowering Feasibility Study of the Northport Power Station, alongside its annual Property Tax Report. The study shows that accelerating the retirement of 400 to 600 megawatts of vintage, fossil-fueled steam power plants in 2022 can save Long Island electric consumers over $300 million.

“These reports demonstrate that our efforts to reduce electric demand through one of the nation’s leading energy efficiency programs is both good for the environment and our customers’ electric bills,” LIPA Chief Executive Officer Tom Falcone said. “In the wake of the COVID-19 pandemic, and the stress it is placing on families throughout Long Island, it is more important than ever that we operate efficiently, reduce cost, and treat all our customers fairly.”


Gordian Raacke, Executive Director of Renewable Energy Long Island, said: “Retiring vintage fossil-fueled power plants makes sense as we remodel our energy infrastructure to a 21st-century system running on renewable energy with smarter, more energy-efficient technology. We commend LIPA for the vision to power Long Island 100 percent with clean and renewable power sources by 2040, which will dramatically reduce air and climate pollution while saving consumers money.”

The Repowering Study finds that the need for Long Island’s aging steam power plants has significantly decreased and that replacing the plants with newer, more efficient natural gas plants would raise customer costs by $1.2 to $1.7 billion. The study finds that replacing a single unit of the four-unit Northport plant would raise customer bills by nearly $700 million. Instead, the study found that retiring, not replacing, one of the four units at the Northport plant in 2022 would be the best option – reducing customer cost by $300 million without harming system reliability.

The Northport Power Station has undergone a gradual decline in its annual energy production, from 55.8 percent of plant capacity in 2005 to 15.2 percent last year. That decline is expected to continue to 2.9 percent of plant capacity by 2035.

In response to the study, LIPA announced that by year-end it would complete a review of the savings from retiring other similar 1960s-era steam plants in Island Park and Port Jefferson and recommend an additional retirement of 400 to 600 megawatts of steam plants by 2022. LIPA expects additional steam plant retirements after new offshore wind projects are interconnected into the Long Island electric grid in 2024.

This announcement follows the decision to retire smaller “peaking” power plants in West Babylon and Glenwood Landing in 2020 and 2021 and two larger steam plants in Far Rockaway and Glenwood Landing in 2012. LIPA will also review additional “peaking” plant retirements, including two units at Glenwood Landing.

LIPA has made settlement offers to the host municipalities of the vintage steam power plants that would provide a stream of tax benefits over seven years, even if the units are retired. These settlement offers are in exchange for resolving a decade-old dispute about the appropriate level of taxation of the plants. The overassessment of taxes at each of the steam plants, despite declining energy production, is a significant factor in the early retirement of the plants. Any redevelopment of the sites with cleaner technologies, like storage, is uneconomical.

“We have put forward a solution that provides the host communities with time to adjust to a more sustainable level of taxation on the plants, consistent with their actual value, and the opportunity to redevelop these sites for a clean energy future,” LIPA CEO Tom Falcone concluded.

Mitchell H. Pally, Chief Executive Officer of the Long Island Builders Institute, said: “In these unprecedented times, it is absolutely necessary that our electric utility do everything possible, both short-and long-term, to reduce the electric bills paid by our businesses as they attempt to recover from the devastating effects of the COVID-19 pandemic, and to use this opportunity to provide new and cleaner methods of electric service. The release of these two reports lays out a specific series of actions, which are absolutely necessary, to reduce the costs of every ratepayer on Long Island, while at the same time use the most efficient and cleanest methods of producing our energy. We strongly support these much-needed initiatives and urge their implementation now.”

Kyle Strober, Executive Director of the Association for a Better Long Island, said: “The serious economic aftershocks from COVID-19 have put into stark relief the insistence by Long Island ratepayers that LIPA pursues as many avenues for saving as possible. A $300 million savings for LIPA ratepayers, coupled with fair phasedown settlements for overassessed power plants, will all help reduce the burden our region must bear for its energy. In these dire times, we call on LIPA to continue in efforts to save ratepayers’ money, and by doing so, assist our region in regaining its economic footing,”

Adrienne Esposito, Executive Director of Citizens Campaign for the Environment, said: “Closing a portion of the Northport power plant is cause for celebration as the long reign of fossil fuels is coming to an end. Long Island is engaged in a profound transition away from fossil fuels and replacing them with cleaner, safer renewable energy infrastructure. The well-reasoned decision of closing a unit at Northport instead of repowering this dinosaur, pave the path to achieving New York’s critical mandate to be carbon-free by 2040. The public can no longer bear the financial burden and the environmental impacts of these outdated, obsolete power plants.”

Sammy Chu, Chairman, U.S. Green Building Council Long Island Chapter, said: “The U.S. Green Building Council-Long Island supports LIPA’s decision to retire one of their four steam units at Northport Power Plant. Due to decreased energy demand on Long Island and increased deployment of renewable energy sources, the economic costs of repowering the Northport Power Plant aren't justified. As deadlines outlined in the Climate Leadership and Community Protection Act approach, it is imperative we make decisions based on long term projections. LIPA has outlined sensible recommendations in their Northport Repowering Study. We are grateful for LIPA's continued prioritization of renewable energy sources to meet the needs of our grid as outlined in CLCPA.”

Neal Lewis, Executive Director, Sustainability Institute at Molloy College, said: “The Sustainability Institute at Molloy College supports the process recommended by the newly completed study of the Northport Power Plant that was mandated by New York State. Repowering the old power plants as fossil-fuel plants is not a feasible option for the ratepayers and would also not be consistent with long term goals of implementing the Climate Leadership and Community Protection Act, enacted last year. This is the right thing to do for the ratepayers, and to be consistent with plans to convert to a sustainable energy grid that relies upon renewable energy systems.”

 Julie Tighe, President of the New York League of Conservation Voters, said: “As the need to act on climate change is becoming more and more critical, this repowering feasibility study shows that renewable energy is the way forward. Moving away from fossil fuels is necessary to not only improve our environment but also save money for ratepayers. Mothballing one of the plants will reduce air pollution and help New York meet the 100% clean energy by 2040 standard set in the Climate Leadership and Community Protection Act. Rooftop solar and energy efficiency mandates are already greening Long Island, and the upcoming offshore wind power will slash emissions even further. We look forward to working with LIPA as these actions are implemented as soon as possible.”

Gordian Raacke, Executive Director of Renewable Energy Long Island, said: “Retiring vintage fossil-fueled power plants makes sense as we remodel our energy infrastructure to a 21st-century system running on renewable energy with smarter, more energy-efficient technology. We commend LIPA for the vision to power Long Island 100 percent with clean and renewable power sources by 2040, which will dramatically reduce air and climate pollution while saving consumers money.”

Lisa Tyson, Director of the Long Island Progressive Coalition, said: “The Long Island Progressive Coalition strongly supports LIPA’s decision to retire one unit at the Northport power plant. This decision not only saves LIPA customers money, but it also begins our transition to renewable energy system and reduction in greenhouse gases that the New York State Climate Leadership and Community Protection Act requires. Now is the time to invest in energy efficiency, solar, wind, and battery storage, not polluting power plants.”


LIPA’s Annual Property Tax Report

LIPA also released its annual Property Tax Report, highlighting the importance of reducing property taxes on Long Island’s four legacy steam power plants at Northport, Port Jefferson, E.F. Barrett, and Glenwood Landing. As Long Island transitions to a cleaner energy future, reducing taxes to a fair level on these four plants would save electric customers more than $2.4 billion through 2040.

The cumulative $184 million paid by LIPA in annual property taxes on the four vintage steam plants has never been higher, while the amount of energy the plants produce has never been lower.

As the Property Tax Report notes, “energy efficiency programs have reduced demand, while new clean energy assets, including offshore wind, solar, and battery storage projects are added to the grid. These twin forces of reduced demand and increased clean energy make the vintage steam plants a diminishing component of our electric grid.”

The 2020 Property Tax Report and the 2020 Northport Repowering Report are available at www.lipower.org.

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