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Richard Kessel, LIPA Chairman

November 17, 2006 @ 12:00 am EST


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Our speaker at LIMBA was LIPA Chairman Richard Kessel. As usual Richard connected very well with his audience. He began by speaking about the recent storm outages that seriously plagued the system. Communications and the proper workforce deployment were the hallmarks of the recovery. Kessel believes in communicating. Often we see communications from some corporations that is experiencing trouble as cover-up. Kessels attitude seems to be get out the news, even if it’s bad. Not informing the public simply does not fly.


He spoke about rates and for historic perspective he cited the folly of Shoreham as part of the reason we are paying high rates.


The phenomenal growth of the needs that have been placed on the system has resulted in a constant need to increase capacity. However he stated that by various strategies the system has  maintained the balance of needs vs supply assets. The building of the 12 smaller, quicker to build, generators helped maintain the system. The Cross Sound Cable is now in place and has taken the stress off the system. The, still to be completed, Neptune cable will provide another 650 megawatts of power.


Kessel admits that the best way to provide on-island generation would be to use the most efficient combined cycle baseload generators of the magnitude of 300+ megawatts. These are difficult to permit and build. The Caithness plant falls into that category and has been permitted and will be built in North Bellport.


Since LIPA took over the system the capacity has increased by 2300 megawatts. That is an enormous increase over a system that was less than 4000 megawatts at the time LIPA began.


Kessel reverted to high rates and went on to say that rates are high because;

1) LIPA pays $334 million in taxes.

2) Shorham debt load is still 4 Billion    

3) Fuel. The cost of fuel has risen dramatically


The most exiting news was and is that LIPA is engaged in the largest demand side management in history. Finding ways not to keep expanding the need for power is essential. Reducing power needs by energy efficient lighting is a major savings. The more we do in the area of managing and reducing loads has dividends in less pollution and less generating needs.


Alternative energy is no small item. There are numerous proposals for producing power by wind, fuel cells, solar and more exotic new methods. All of these will be part of an energy producing matrix alongside demand management.. He was disappointed that the Solar Roof Program had only 750 subscribers instead of the 10,000 that were expected.


In the end Ritchie harkened back to the fact that we will still want to have more connections to the mainland and use generating assets that are not presently available to us.

Pictured: LIPA Chairman, Richard Kessel and Ernie Fazio