LIPA to Bring Renewable Hydro Power to LI Over Cross-Sound Cable

Uniondale, NY – January 26, 2006 - Long Island Power Authority Chairman Richard M. Kessel today announced that the LIPA Board of Trustees voted to approve the selection of a proposal to bring up to 345 megawatts (MW) of electricity to Long Island from a pumped-storage hydroelectric facility in Massachusetts. The renewable hydro power will benefit LIPA’s ratepayers and reduce Long Island’s reliance on fossil fuels to generate electricity.


“This historic decision to purchase clean, renewable hydro power over the Cross-Sound Cable is critically important to Long Island’s energy future,” said Mr.Kessel. “It will help us diversify our portfolio of energy resources, increase our use of renewable energy technology, and move Long Island away from its heavy reliance on power generated by fossil fuels.”

The proposal for the Bear Swamp hydroelectric generating facility in Rowe, Massachusetts, was recommended by a selection committee comprised of LIPA staff and consultants that evaluated responses to a Request For Proposals (RFP) LIPA issued seeking off-Island sources of energy that could be transmitted over either the existing Cross-Sound Cable between New Haven, Connecticut and Shoreham, Long Island, or the Neptune Cable from New Jersey that is currently under construction and expected to be in service by the summer of 2007.

Under terms of the 15-year Bear Swamp proposal, LIPA could receive up to 345 MW of power until the New England electric system operator (ISO-NE) implements locational capacity rules that will reduce it to 100 MW. ISO-NE is expected to adopt the rules in the summer of 2007.

The Bear Swamp facility is a partnership of Brascan Power and Emera Inc. It is a 600 MW hydraulic pumped-storage facility that straddles the Deerfield River in Rowe and Florida, Massachusetts. The major generating units are twin reversible pump turbines built within the hillside. During low demand periods for electricity, water is pumped 700 feet from the lower to an upper reservoir. During peak periods the water is released from the upper reservoir to spin the turbines and produce low cost energy.

“I am extremely pleased that LIPA will be able to purchase power from this proven generator of clean, renewable energy and bring it to Long Island over the Cross-Sound Cable, which has already helped us save tens of millions of dollars for LIPA’s customers. But for the Cross Sound Cable, LIPA would not be able to access such clean and low cost power,” said Mr. Kessel.

The Board of Trustees also authorized Mr. Kessel, on behalf of LIPA, to enter into negotiations to purchase up to 685 MW of electric generating capacity over the Neptune Cable for up to 20 years under proposals from FPL Energy and/or LS Power. The Neptune cable is expected to be operational by the summer of 2007.

The recommended proposals from both FPL Energy and LS Power are for electric generating capacity from natural gas-fired facilities in Pennsylvania that have modern pollution control equipment.

To help meet LIPA’s electric generating capacity needs and make effective use of its cable assets, LIPA issued the RFP seeking off-Island resources on February 17, 2005 to solicit proposals for capacity and/or energy over the Cross-Sound and Neptune cables. Eleven entities submitted 28 conforming proposals last April.

Using a phased approach, LIPA’s Selection Committee of in-house staff and retained consultants evaluated all 28 proposals based on their economic, technical, financial and environmental merits and proposed contract terms & conditions.