LIPA declines Barrett purchase

The Long Island Power Authority announced on Sept. 25 that it would not purchase the Barrett Power Plant in Island Park.

LIPA has an option in its contract with National Grid, which owns the Barrett Plant and 13 others on Long Island, to purchase the plant. If LIPA had gone through with the purchase, it would have built a new plant on the site, one that was more energy-efficient and environmentally friendly.

The plan was met with wide approval from Island Park residents at a meeting LIPA hosted with the community at Lincoln Orens Middle School on March 18. However, LIPA recently decided to forgo the purchasing option in their contract because purchasing and repowering the plant didn’t make economic sense in the face of the $7 billion in debt LIPA has.

Kevin Law, president and CEO of LIPA, said that the company already contractually pays National Grid for the power generated by the Barrett Plant, as well as the fuel that goes into the plant, the taxes on the plant and other overhead charges — pretty much all of the plant’s expenses. The going rate for the plant, Law said, was about $90 million. On top of that, it would have cost LIPA about $1 billion to repower and build a new plant. So LIPA’s decision to not purchase the plant was based on financial reasons.

“We have $7 billion in debt, and it’s tough for us to take on more,” said Law. “I support repowering and I’d like to see a repowering project done on Long Island. And I still, and I’ve said this publicly before, I still think Barrett is the best candidate of all the plants for a repowering.”

For National Grid, the current owner of the plant, LIPA’s decision to not purchase the plant has not affected operations of the plant or the PILOT (Payments in Lieu of Taxes) that it generates for the Island Park School District—about 40 percent of the district’s tax base.

“The power plants are under contract with LIPA until 2013 with an option to renew until 2028,” said National Grid Media Relations Representative Elizabeth Margulies in an e-mail. “And we will continue to work with LIPA find comprehensive energy solutions that will both reduce the carbon footprint on Long Island and secure the region’s energy future.”

Law said that Barrett was one of the strongest candidates for repowering because it has extra land available and already has infrastructure in place. Also, the community is very supportive of the plant. “So for all those reasons, Barrett continues to be the top candidate for repowering, it’s just going to be done by somebody else,” said Law. “And then LIPA will be buying the power from that entity.”