Decision Supporting Caithness II Upheld by Federal Energy Regulatory Commission

 FERC rejects PSEG-LI’s latest obstacle to clean, low-cost power, and economic development on Long Island when it denied its request for a rehearing killing an attempt to stick an additional billion dollars in project costs onto Caithness II 
YAPHANK, NY  March 18, 2016 Â Amidst Governor Cuomo’s unprecedented efforts to improve New York’s infrastructure, the Federal Energy Regulatory Commission (FERC) removed an obstacle to fulfilling modernization of the Long Island electric grid. Yesterday, FERC rejected PSEG-LI’s request for rehearing FERC’s September 30th decision that rejected PSEG-LI’s criteria for determining the electric transmission upgrades required to reliably and safely interconnect new, clean, and efficient generation facilities on Long Island. FERC found PSEG-LI’s guidelines violate FERC’s Orders and the New York Independent System Operator’s (NYISO) tariffs (Caithness Long Island II, LLC v. New York Independent System Operator, Inc.). FERC’s most recent decision is a further repudiation of the special transmission interconnection requirements that PSEG-LI added onto the standard NYISO criteria for determining the upgrades required to connect power plants and undermines PSEG LI’s invalid and unsupported claims that Caithness II would increase electric rates on Long Island.
As a result of FERC’s action yesterday, there will only be minimal transmission upgrade costs, and the Long Island electric ratepayers will reap the benefits. Indeed, a study by General Electric Consulting has previously found that, due to its high efficiency, Caithness II is expected to save Long Island ratepayers an average of $192 million annually or over a billion dollars in wholesale energy costs over the first six full years of operation under the Caithness proposal that the Long Island Power Authority (LIPA) management previously selected out of 45 projects in a competitive solicitation. Then PSEG-LI asked the LIPA board to put the brakes on it.
PSEG-LI keeps raising obstacles to our clean, efficient project that will save $190 million a year in energy costs, conserve water, reduce emissions, and improve reliability. PSEG-LI’s empty allegations about the costs of Caithness II are an attempt to discredit the project, said Ross Ain, President of Caithness Long Island II, LLC. PSEG-LI has consistently failed to produce any evidence to back up its claims. Hopefully, this ruling is the final nail in the coffin regarding the alleged high transmission costs needed to connect Caithness II to the electric grid.
The reality is that Caithness II would lower rates, provide much needed local economic development, create hundreds of jobs, and increase tax revenues to support Long Island’s schools, libraries, fire districts, and local government, Mr. Ain continued. The new plant will help make Long Island energy independent by substantially reducing imports of expensive off-Island electricity from power plants owned by PSEG and others in New Jersey, Connecticut, and upstate New York, as well as significantly reduce air and water pollution from the old, inefficient plants on Long Island. Importantly, the plant will also further the Governor’s goal of reducing greenhouse gas emissions by 40 percent from 1990 levels by 2030.
This decision comes on the heels of a diverse group of nearly 30 elected, business, and community representatives sending a letter to Governor Cuomo urging him to step in and move Caithness II forward due to PSEG-LI’s failure to modernize the region’s energy infrastructure, protect Long Island’s energy supply from the threat of extreme weather, improve Long Island’s environment, and bring much-needed jobs and investment to the region.
LIPA management selected Caithness II in 2013 for its value to Long Island ratepayers and the environment. It is a combined-cycle 750-MW natural gas-fired plant that will be built adjacent to the existing Caithness facility in Yaphank. PSEG-LI recommended that the project be put on hold in August 2014. Caithness II has widespread support from environmental, business, government and labor leaders, and is expected to save ratepayers in excess of $192 million in annual wholesale energy costs, in addition to creating significant environmental and economic benefits.
About Caithness Long Island, LLC
Caithness Long Island, LLC, is a subsidiary of Caithness Energy, LLC, a privately held, New York-based independent power producer. For over 25 years, Caithness has been a pioneer in the development of clean, reliable energy. More information can be found at: www.caithnesslongisland.com.