Assessing Long Island’s Future Energy Needs

When Long Island businesses are asked about the challenges they face in conducting business in the region, near the top of everyone’s list is the cost of energy. It’s no wonder given Long Island’s history of dysfunctional energy policy beginning with how the Long Island Lighting Company saddled Long Island ratepayers with nearly $7 billion in debt from the closing of the Shoreham Nuclear Power Plant with much of that debt remaining unpaid and in the power rates that Long Islanders and businesses pay. This has contributed to Long Island’s economic non-competitiveness with other regions. In fact, recent published reports show that the electric rates that Long Islanders pay are among the highest in the state.

Long Island’s cloudy energy past, seemingly influenced more by politics and local influence, appears a distant distraction since PSE&GLI was awarded the responsibility of planning for the region’s future energy needs. However, even while Long Island’s energy needs are being evaluated by PSE&GLI there are those who are undermining that process by pushing for the construction of the nearly $1 billion 750 megawatt Caithness II Power Plant. This despite PSE&GLI’s initial analysis which suggests that Caithness II would increase energy costs for power users by six percent in the first year of operation.

Proponents argue that Caithness II is needed to provide construction jobs for the Long Island economy as well as replacing older energy plants. Nobody argues about the need for jobs but the criteria for building Caithness II has to be more about how much additional energy Long Island requires, something that PSE&GLI says won’t be needed until 2028. Countering this reasoning are Caithness II proponents who say their power plan would save Long Island ratepayers millions of dollars by reducing fuel costs and providing economic support for communities. They contend that PSE&GLI wants to be the sole supplier of future Long Island energy needs and doesn’t want competition from the gas-operated Caithness II.

Long Islanders, long battered by energy policies forced on them by those who thought they knew what the right energy policies for Long Island were, are now being told that a new energy source is needed and Caithness II is the answer. It seems like the old days; who to believe regarding Long Island’s energy needs?

Further contributing to what could become a complicated energy mix are the planned Long Island solar arrays and the federal government’s planned auction of building rights for a wind farm on 81,000 acres of federal ocean bottom off the coast of New York and New Jersey. How the power generation from this wind farm, located 11 miles south of Long Island, will impact the region’s future energy needs and energy costs needs to be integrated into PSE&GLI’s evaluation. Wind energy is a real possibility since New York State’s Energy Research and Development Authority expects to enter the bidding, wanting to direct the project’s development.

It’s time to step back and wait for PSE&G’s projection of Long Island’s future energy needs before a rash judgement to build Caithness II is made. Long Island businesses need a consistent energy policy and can’t be saddled with paying for energy capacity that is not needed. ■

Dr. Martin R. Cantor is director of the Long Island Center for Socio-Economic Policy, author of Long Island, The Global Economy and Race, The Aging of America’s First Suburb and a former Suffolk County Economic Development Commissioner.