By:Scott Brinton
LIPA, Freeport negotiating deal to close plant; civic leader holds little hope
Long Island Power Authority and Freeport Village officials met last Thursday to discuss a possible partnership that could shut down Freeport Electric's Power Plant No. 2. The more than 30-year-old diesel plant has roiled Merrick in recent months, after the Old Lindenmere Civic Association started fighting it in February.
Joseph Kralovich, Old Lindenmere's president, fears the unfiltered diesel exhaust that the plant gives off may cause cancer in humans. Numerous federal and state agencies, including the National Institute for Occupational Safety and Health and the California Air Resources Board, have declared diesel exhaust a likely carcinogen.
State Sen. Charles Fuschillo Jr. (R-Merrick) called the meeting between LIPA and Freeport. Among attendees were LIPA Chairman Richard Kessel of Merrick, Freeport Mayor William Glacken and Freeport Electric Superintendent Hubert Bianco.
In an interview with the Herald, Kessel said, "Obviously, there have been a lot of concerns raised by people in Freeport and Merrick. It's an old plant. If we can be helpful, we'd like to be helpful."
Kessel declined to offer specifics of any deal that might be in the works between LIPA and Freeport. He would only say that the parties were discussing a partnership to provide Freeport with "additional generation" of electricity at a location other than Plant No. 2. He would not say what location he might have in mind.
On May 17, LIPA technicians started checking Freeport's generation equipment to see what, if any, partnership could be developed, Kessel said.
Negotiations between Freeport and LIPA could get tough. Last year, LIPA offered the village a deal that would have provided the municipality with the electricity it needs at low cost, provided it shut down Plant No. 2. Freeport refused.
Village officials had offered no explanation why they declined, until Bianco recently wrote to the State Attorney General's Office. (The attorney general, Environmental Protection Agency and state Department of Environmental Conservation are investigating Plant No. 2 for possible violations of the Clean Air Act.)
In his four-page letter, Bianco wrote, "Unfortunately, the energy prices quoted to Freeport were generally higher than market prices, so the village bought off the market or generated the energy itself, depending on which of the options was less costly to its consumer-owners."
Kessel said, "Freeport isn't going to make a deal that forces up their rates." (According to a Long Island Business News report this year, Freeport residents pay half what the rest of the Island does for electricity. In 1996, village officials told the Freeport Leader that their electric rates were 60 percent less than the rest of Long Island.)
Kessel also said that Freeport officials told him they couldn't get enough electricity for the village from the New York State Power Authority, from which the municipality buys megawatts.
On May 15, in an interview with Channel 12 News, Mayor Glacken said the village had no plans to close Plant No. 2. The village would continue to run it, he said, adding that Freeport Electric would raise the plant's stacks, which would disperse exhaust across a wider range.
Kralovich doesn't believe the village will raise the stacks' height. Freeport officials have made that statement before and never acted on it, he said. In fact, as early as 1975, the village proposed raising Plant No. 2's stacks, according to reports in the Freeport Leader. Kralovich also said that raising the stacks would not cleanse the exhaust.
The civic leader also does not believe Freeport will strike a deal with the Long Island Power Authority. Unless shut down by the DEC or EPA, the plant will continue to run, he worries.
In the new era of deregulation, which takes effect this year in New York, Freeport stands to make hefty profits by generating electricity and selling it on the open market, Kralovich believes. Freeport has sold electricity in the past. According to its 1999 Public Service Commission report, it generated 1.2 million kilowatt-hours of electricity at Plant No. 2 and sold 1.3 million to LIPA for $135,000. That same year, Freeport officials were reported to have said they generated electricity to meet the village's needs.
Kralovich believes Freeport will continue to sell electricity in the future as the price for megawatt-hours rises in a deregulated market.
New York's path to deregulation began in 1996, when the Public Service Commission, the state's chief regulator for the electric industry, required New York's utilities to give up their monopoly control of power plants to new owners, according to state Comptroller H. Carl McCall's February deregulation report.
The new owners were expected to compete in a recently formed wholesale market, governed by the New York Independent System Operator.
The idea behind deregulation was that competition would drive down electric rates. Across the country (take California, as an example), that hasn't happened, however. The reason, according to McCall: With the tech-heavy new economy consuming huge amounts of electricity, supply is running short. And McCall wrote in his February report: "In a deregulated market, when supply is tight, those who control the supply raise prices."
Kessel said that LIPA doesn't need electricity generated by Plant No. 2. "If they close it, and we wouldn't get any power from it, that's fine," he said.
The LIPA chairman added that, in any deal between LIPA and Freeport, the village must demonstrate a will to cooperate. "If they don't want to partner with LIPA, I can't force them to do that," he said.
