LIPA Issues RFP For Purchase Of 990 MW Of Electricity From Off-Island Sources
Neptune Cables
Levittown, NY – February 17, 2005 – (View Photos) Long Island Power Authority Chairman Richard M. Kessel today announced the issuance of a Request for Proposals (RFP) seeking the purchase of up to 990 megawatts (MW) of electricity from generating facilities located off of Long Island that would be imported over both the Cross-Sound and Neptune cables.
The Cross-Sound Cable, which is operating, links Long Island to the New England power grid via the 24-mile connection that runs from Shoreham to New Haven and is capable of carrying up to 330MW of electricity. The Neptune Regional Transmission System cable, which is currently under regulatory review and is due to be available by July, 2007, will transport up to 660MW of power via a 65-mile long cable that will run from Nassau County to Sayreville, New Jersey. The Neptune cable will link Long Island to the New Jersey, Maryland and Pennsylvania power grid.
"We're seeking long-term energy purchase agreements for electricity imports to be carried over both the Cross-Sound and Neptune cables so we can maximize the economic and environmental benefits of off-Island resources for Long Island's electric consumers," said LIPA Chairman Richard M. Kessel.
In issuing the RFP, LIPA seeks to:
- Procure electricity under competitive prices, terms, and conditions that accommodate LIPA's changing requirements;
- Procure capacity to meet LIPA's New York Independent System Operator (NYISO) locational capacity requirements;
- Effectively and efficiently utilize cable assets available to LIPA;
- Diversify the location of its suppliers by procuring electricity from generating facilities located off-Island; and
- Increase its fuel diversity by reducing reliance on natural gas and oil used to fuel the generating facilities currently providing electricity to its customers.
The RFP is seeking contracts for power in increments of not less than 10MW all the way up to 330MW for the Cross-Sound Cable beginning May 1, 2006, and in increments of not less than 10MW all the way up to 660MW for the Neptune RTS beginning July 1, 2007. The term of the contracts can range from five to twenty years.
The RFP includes a component that will encourage the use of "green power" over the cables, by seeking energy contracts for quantities of electricity as low as 10 MW. Small units of sale will encourage the suppliers of renewable energy, or "green energy," to participate in LIPA's RFP process.
"The Cross-Sound Cable has already demonstrated its usefulness," said Mr. Kessel. "In its first six months of operation, we saved nearly $8 million in comparison to the cost of on-Island power by importing electricity from suppliers in New England using short-term contracts. The savings should be even greater over both cables using long-term purchase contracts."
A proposers' conference will be held on March 16, 2005 for parties interested in the RFP. Responses are due April 14, 2005. Selections are scheduled to be announced in time for review by the LIPA Board of Trustees and its December 2005 meeting.
LIPA, a non-profit municipal electric utility, owns the retail electric system on Long Island and provides electric service to nearly 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens. LIPA does not own any on-island generation assets and does not provide natural gas service.
Source: LIPA