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LIMBA Steve Thome VP Development J Power USA

December 7, 2012 @ 12:00 am EST


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Our speaker today was Steve Thome. Mr. Thome represents J-Power, a company with experience in building and managing electric power plants. They are proposing a modern gas fired power plant using very similar technology that was used by Caithness when the built their plant a couple of years ago. LIMBA was firm supporter of the Caithness plant because it used technology that gave us very low emissions and used air cooling towers rather than water cooling. The stress that water cooling puts on the environment is detrimental to fish life if it uses water from surrounding bodies of water and it puts unsustainable demands on ground water of that happens to be the source.


The environmental pluses of this plant were the primary focus of the talk this morning. The old method of electric generation is called single cycle and this technology is referred to as combined cycle. Single cycle has about 34% efficiency and combined cycle has an efficiency of 59%. That means that in the case of a single cycle unit only 34% of the heat content of the fuel is actually converted to electric energy.


But this meeting went far beyond the technical superiority of the generation. We discussed the availability of the gas that would be needed to fire the unit. We had in the room a group of knowledgeable energy people and the questions were useful in helping the rest of us understand the many aspects of the proposal.


The placement of this unit at the old Shoreham site has many advantages. The Shoreham land is a brownfield and the reuse for power generation is already approved. That would otherwise be an obstacle to constructing a power plant. In fact J-Power already has a peaking plant on the property.


The question of job creation came up and the number of jobs created during plant construction is about 400. Permanent operating jobs would be 30. The equipment would be mostly made in America, specifically Marietta Georgia. The water way that is built into the property at Shoreham would accommodate the barging of major components to the site which is still another reason for site desirability.


The plant would be serviced by an existing gas pipeline that crosses the Sound. There would need to be a branch of that line not far from the Connecticut shore. “Would there be enough supply in that line?” That question was answered in the affirmative. “This is a high pressure line and would have the ability to supply this new plant.” according to Thome.


We went on to the politics of the plant. Municipal ownership, for example would pose other questions. Dr. Mathew Cordaro was in the room and he was useful to the conversation at the meeting. Cordaro is the Chairman of the Suffolk County LIPA Oversight Committee. He was the only person in attendance that actually ran a municipal power company. He was the president of Nashville Electric Company. I specifically asked how that project would look if the customer was not LIPA but a true municipality. “Would we see the same tax benefits if the municipal company did not own the facility and just contracted for the power?” The advantages appear to be that we would be better off if the municipal power company contracted the builder to create the facility and then handed the builder a check, and that check would be financed by tax free bonds. Instead we are contracting for a purchase agreement of 30 years to buy thee power while the builder still owns the facility.


Lastly there was the size and scope of the plant that several people pointed out to me after the close of the meeting. LIPA has stated that there is a foreseeable need for an additional 2,500 megawatts of power. There is another power proposal out there from Caithness for 700 MW. Why are we pitting these two companies against each other, when according to LIPA both are needed?


What we should be doing is vetting both proposals with the mindset of creating both of these environmentally desirable plants and doing it under the flag of a municipal entity.