- Email: [email protected]
Pataki unveils Lilco bailout designed to cut L.I. rates
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E
NEWS
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u
s
strutted in Buena Vista County in
nity for geothermal. That leaves
tem, as well as the regulatory and
Northwest Iowa.
biomass. Heydlauff said AEP’s
financial albatross of the shut-
calculations indicate that to re-
tered Shoreham nuclear plant.
place the coal used in a 1,300 MW
The takeover will require his-
along with another 11 MW under
generating plant with hardwood
tory’s largest municipal bond is-
contract from a renewable energy
would require harvesting 300,000
sue-$5-6
source outside Iowa, would meet
acres of forest annually. If corn-
Standard & Poor’s, to be sold by the Long Island Power Authority.
Des Moines-based MidAmerican said that the wind purchase,
billion, according to
the Iowa Utilities Board’s require-
cobs and other corn residue were
ment, announced in August 1996,
used, it would require 6 million
that the company acquire 55 MW
acres of farmland, approximately
dovetails with the pending
of electricity generated by alterna-
equivalent to all the farms in Ohio.
merger of Lilco and Brooklyn
tive energy sources in Iowa.
The LIPA portion of the plan
Union Gas Co., which will take
To comply with the IUB order,
over Lilco’s electric generating
MidAmerican requested propos-
system. The merged company
als from 60 potential bidders and
would operate the Lilco trans-
chose Zond, a unit of Enron
mission and distribution
Corp., from 18 proposals.
under a contract with LIPA.
But renewable generating tech-
system
LII’A would also have the right
nologies will not be the way out
to buy Lilco’s generating plants
of the greenhouse gas dilemma
after three years. LIPA would
for American Electric Power. Ac-
take over $3.6 billion of the re-
cording to AEP’s environmental
maining $4.5 billion in debt,
guru Dale Heydlauff, his utility
with the merged company eat-
has evaluated all the current crop
ing some $900 million. In addi-
of green generating technologies
tion to the transmission
and dis-
and found them lacking in a sys-
tribution system, with a book
tem where the last seven units
value of some 51.4 billion, LIPA
were 1,300 MW coal-fired plants.
will get Lilco’s share of the Nine
Wind isn’t going to cut it, Heydlauff said, noting that AEP
Mile Point 2 nuclear plant, with
Restructuring Watch
had evaluated two favorable wind sites in West Virginia, but nixed them on environmental grounds. One would have intruded on a popular natural site, the Dolly Sodds ecological area in the Monongahela National Forest. The other was in a mountain pass
a book value of $900 million. As part of the deal, LIPA will
Pataki Unveils Lilco Bailout Designed to Cut L.I. Rates
T
work with Suffolk County to build a new transmission line under Long Island Sound to import cheaper power to the island. As
he final piece in the puzzle of how to restructure the
the electric industry becomes competitive and deregulated, LIPA
electricity system on Long Island
would give its customers the right
in the Atlantic migratory bird fly-
appears to be falling into place, as
to choose electricity suppliers. A
way.
N.Y. Gov. George Pataki in mid-
$1.1 billion liability that Suffolk
March announced a deal de-
County and two other govern-
dependable nor dispatchable,
signed to cut electric rates by up
ments in the area owe Lilco for ex-
AEP also rejected solar because
to 23 percent through a takeover
cessive property taxes would be
the region lacks sufficient sun-
of Long Island Lighting Co.‘s
discounted to $625 million. It
light. Nor is there any opportu-
transmission and distribution sys-
would be financed by the bond is-
Besides wind, which is neither
6
The Ekctricity
~our1d
H
T
E
NEWS
IN
F
0
C
U
S
sue and paid back by a surcharge
want to make sure it’s as adver-
are among the highest in the na-
on customers in Suffolk County.
tised.”
tion, which serves only to burden
According to calculations by
Mass. Legislative Panel Wants Full Choice in ‘98
Pataki’s office, the initial rate reductions under the plan will be
homeowners and businesses alike with what is basically a fixed-cost service with few choices, save conservation, should they desire to re-
18.2 percent in Nassau County
A
and 16.4 percent in Suffolk. After five years, the reduction would
special joint legislative committee on electric restructur-
duce their electric bills.” The report of the joint commit-
reach 23.2 percent in Nassau and
ing in Massachusetts has recom-
tee, released in March, also backs
20.5 percent in Suffolk. Required
mended that retail customer
a securitization plan for recovery
approvals for the deal include a
access in the state be imple-
of stranded costs, similar to that
nod from Democratic Assembly
mented by Jan. 1,1998, along with
planned for California and Penn-
Speaker Sheldon
a mandatory ten percent reduc-
sylvania. But the report does not
tion in electric rates for all con-
contemplate 100 percent recovery
Silver, a
Pataki adversary who sits on the
sumers in the commonwealth.
Only after scrutiny of stranded
Board. That board must give the
The committee says it concluded,
costs by the state’s Department
deal unanimous approval before
after some five months of work,
Public Utilities, and efforts to re-
it can proceed. “I don’t intend to
“that the time is appropriate to in-
duce the costs, including divesti-
stand in the way of a deal that
troduce retail competition into the
ture and renegotiation of pur-
produces all the things this deal
commonwealth’s electricity mar-
chased power contracts, would
is supposed to produce,” Silver
ket. Electricity rates for both resi-
utilities be able to “essentially refi-
told the NEW York Times. “I just
dential and business customers
nance a portion of their above-
state’s Public Facilities
.:.
Control
MEETIN
Cori$erence
OF
GS Date
Place
1 N T E R E S sponsor
T
Q
Contact
The 8th Global Warming International Conference & Expo
May 25-28
New York, NY
GWIC and Columbia University
Billie Jefferson (630) 91 O-1551
Antitrust in Energy Markets
June 2-4
Madison, WI
University of Wisconsin Law School and Wisconsin Public Utility Institute
(608) 263-4180
Euro Energy ‘97
June 3-4
London
The Institute of Economic Affairs
+44-l 71-608-3491
65th Annual EEI ConventioniExpo ‘97
June 8-11
Philadelphia, PA
Edison Electric Institute
Debra Henry (202) 508-5496
The 8th Annual National Energy Services Conference and Exposition
June II-13
Washington, DC
The Association of Energy Services Professionals
(561) 361-0023
UCI 1997 International Conference
June 11-13
Orlando, FL
Utility Communicators International
(314) 291-1000
WINDPOWER 1997
June 15-l 7
Austin, TX
American Wind Energy Association
Donna Ancypa (202) 383-2500
APPA National Conference
June 16-18
Toronto, ON
American Public Power Association
(202) 467-2900
2nd International Training Program on Utility Regulation and Strategy
June 16-27
Gainesville, FL
Public Utility Research Center and the World Bank
Sanford Berg (352) 392-6148
The Utilitv Refinancing Forum
June 23-24
New York, NY
Institute for International Research
(800) 999-3123
1997 ACEEE Summer Study on Energy Efficiencv in lndustrv
July 8-11
Saratoga Springs, NY
American Council for an Energy-Efficient Economv
Debbie Giallombardo 12021429-8873
Energy and Infrastructure in the Americas
Sept. 11-19
Caracas Venezuela
International Bar Association
+44-i 71-629-i 206
May 1997
of
7
H
E
NEWS
IN
F
0
c
u
s
strutted in Buena Vista County in
nity for geothermal. That leaves
tem, as well as the regulatory and
Northwest Iowa.
biomass. Heydlauff said AEP’s
financial albatross of the shut-
calculations indicate that to re-
tered Shoreham nuclear plant.
place the coal used in a 1,300 MW
The takeover will require his-
along with another 11 MW under
generating plant with hardwood
tory’s largest municipal bond is-
contract from a renewable energy
would require harvesting 300,000
sue-$5-6
source outside Iowa, would meet
acres of forest annually. If corn-
Standard & Poor’s, to be sold by the Long Island Power Authority.
Des Moines-based MidAmerican said that the wind purchase,
billion, according to
the Iowa Utilities Board’s require-
cobs and other corn residue were
ment, announced in August 1996,
used, it would require 6 million
that the company acquire 55 MW
acres of farmland, approximately
dovetails with the pending
of electricity generated by alterna-
equivalent to all the farms in Ohio.
merger of Lilco and Brooklyn
tive energy sources in Iowa.
The LIPA portion of the plan
Union Gas Co., which will take
To comply with the IUB order,
over Lilco’s electric generating
MidAmerican requested propos-
system. The merged company
als from 60 potential bidders and
would operate the Lilco trans-
chose Zond, a unit of Enron
mission and distribution
Corp., from 18 proposals.
under a contract with LIPA.
But renewable generating tech-
system
LII’A would also have the right
nologies will not be the way out
to buy Lilco’s generating plants
of the greenhouse gas dilemma
after three years. LIPA would
for American Electric Power. Ac-
take over $3.6 billion of the re-
cording to AEP’s environmental
maining $4.5 billion in debt,
guru Dale Heydlauff, his utility
with the merged company eat-
has evaluated all the current crop
ing some $900 million. In addi-
of green generating technologies
tion to the transmission
and dis-
and found them lacking in a sys-
tribution system, with a book
tem where the last seven units
value of some 51.4 billion, LIPA
were 1,300 MW coal-fired plants.
will get Lilco’s share of the Nine
Wind isn’t going to cut it, Heydlauff said, noting that AEP
Mile Point 2 nuclear plant, with
Restructuring Watch
had evaluated two favorable wind sites in West Virginia, but nixed them on environmental grounds. One would have intruded on a popular natural site, the Dolly Sodds ecological area in the Monongahela National Forest. The other was in a mountain pass
a book value of $900 million. As part of the deal, LIPA will
Pataki Unveils Lilco Bailout Designed to Cut L.I. Rates
T
work with Suffolk County to build a new transmission line under Long Island Sound to import cheaper power to the island. As
he final piece in the puzzle of how to restructure the
the electric industry becomes competitive and deregulated, LIPA
electricity system on Long Island
would give its customers the right
in the Atlantic migratory bird fly-
appears to be falling into place, as
to choose electricity suppliers. A
way.
N.Y. Gov. George Pataki in mid-
$1.1 billion liability that Suffolk
March announced a deal de-
County and two other govern-
dependable nor dispatchable,
signed to cut electric rates by up
ments in the area owe Lilco for ex-
AEP also rejected solar because
to 23 percent through a takeover
cessive property taxes would be
the region lacks sufficient sun-
of Long Island Lighting Co.‘s
discounted to $625 million. It
light. Nor is there any opportu-
transmission and distribution sys-
would be financed by the bond is-
Besides wind, which is neither
6
The Ekctricity
~our1d
H
T
E
NEWS
IN
F
0
C
U
S
sue and paid back by a surcharge
want to make sure it’s as adver-
are among the highest in the na-
on customers in Suffolk County.
tised.”
tion, which serves only to burden
According to calculations by
Mass. Legislative Panel Wants Full Choice in ‘98
Pataki’s office, the initial rate reductions under the plan will be
homeowners and businesses alike with what is basically a fixed-cost service with few choices, save conservation, should they desire to re-
18.2 percent in Nassau County
A
and 16.4 percent in Suffolk. After five years, the reduction would
special joint legislative committee on electric restructur-
duce their electric bills.” The report of the joint commit-
reach 23.2 percent in Nassau and
ing in Massachusetts has recom-
tee, released in March, also backs
20.5 percent in Suffolk. Required
mended that retail customer
a securitization plan for recovery
approvals for the deal include a
access in the state be imple-
of stranded costs, similar to that
nod from Democratic Assembly
mented by Jan. 1,1998, along with
planned for California and Penn-
Speaker Sheldon
a mandatory ten percent reduc-
sylvania. But the report does not
tion in electric rates for all con-
contemplate 100 percent recovery
Silver, a
Pataki adversary who sits on the
sumers in the commonwealth.
Only after scrutiny of stranded
Board. That board must give the
The committee says it concluded,
costs by the state’s Department
deal unanimous approval before
after some five months of work,
Public Utilities, and efforts to re-
it can proceed. “I don’t intend to
“that the time is appropriate to in-
duce the costs, including divesti-
stand in the way of a deal that
troduce retail competition into the
ture and renegotiation of pur-
produces all the things this deal
commonwealth’s electricity mar-
chased power contracts, would
is supposed to produce,” Silver
ket. Electricity rates for both resi-
utilities be able to “essentially refi-
told the NEW York Times. “I just
dential and business customers
nance a portion of their above-
state’s Public Facilities
.:.
Control
MEETIN
Cori$erence
OF
GS Date
Place
1 N T E R E S sponsor
T
Q
Contact
The 8th Global Warming International Conference & Expo
May 25-28
New York, NY
GWIC and Columbia University
Billie Jefferson (630) 91 O-1551
Antitrust in Energy Markets
June 2-4
Madison, WI
University of Wisconsin Law School and Wisconsin Public Utility Institute
(608) 263-4180
Euro Energy ‘97
June 3-4
London
The Institute of Economic Affairs
+44-l 71-608-3491
65th Annual EEI ConventioniExpo ‘97
June 8-11
Philadelphia, PA
Edison Electric Institute
Debra Henry (202) 508-5496
The 8th Annual National Energy Services Conference and Exposition
June II-13
Washington, DC
The Association of Energy Services Professionals
(561) 361-0023
UCI 1997 International Conference
June 11-13
Orlando, FL
Utility Communicators International
(314) 291-1000
WINDPOWER 1997
June 15-l 7
Austin, TX
American Wind Energy Association
Donna Ancypa (202) 383-2500
APPA National Conference
June 16-18
Toronto, ON
American Public Power Association
(202) 467-2900
2nd International Training Program on Utility Regulation and Strategy
June 16-27
Gainesville, FL
Public Utility Research Center and the World Bank
Sanford Berg (352) 392-6148
The Utilitv Refinancing Forum
June 23-24
New York, NY
Institute for International Research
(800) 999-3123
1997 ACEEE Summer Study on Energy Efficiencv in lndustrv
July 8-11
Saratoga Springs, NY
American Council for an Energy-Efficient Economv
Debbie Giallombardo 12021429-8873
Energy and Infrastructure in the Americas
Sept. 11-19
Caracas Venezuela
International Bar Association
+44-i 71-629-i 206
May 1997
of
7