10-year Program Will Sharply Reduce Peak Demand and Postpone Need to Construct New Power Plant

(Uniondale, NY) In an effort to reduce energy costs while keeping up with Long Island’s growing energy demands, Long Island Power Authority (LIPA) President and CEO Kevin S. Law recently announced the Authority’s new Efficiency Long Island program.

The 10-year, $924 million program kicks off on January 1, 2009 and will offer residential and business customers an array of programs to help reduce their energy usage resulting in savings on future bills and achieving significant environmental benefits.

Efficiency Long Island is expected to reduce peak electric demand by 500 Megawatts (MW) by 2018. Such a reduction will result in the deferral or elimination of the equivalent of one large or two medium-sized power plants from LIPA’s capacity expansion plan and avoid high-cost, on-peak energy production equivalent to saving 2.2 million barrels of oil.

This new program succeeds and expands on LIPA’s clean energy initiative offering more programs while continuing to promote clean, renewable electric generation technologies and energy conservation and efficiency.

“Efficiency Long Island postpones the need to build additional generating facilities and it also provides tools our customers can utilize to control their own energy consumption, thereby lowering their monthly bills,” said LIPA President and CEO Kevin S. Law.  “It’s the cheapest, cleanest and fastest way to meet Long Island’s energy needs while reducing global warming pollution,” said Law.

Under the program, residential and commercial customers will have easy access via the internet or telephone to enroll in the following five programs:

For Residential Customers
* Efficient Products - Purchases of lighting, appliances, consumer electronics, in-wall air conditioners and dehumidifiers from retail outlets

* ENERGY STAR Labeled Homes - includes building shell upgrades, HVAC, hot water, duct seals, lighting and high efficiency appliances

* Existing Homes - duct sealing and tune-ups for central air conditioners, whole house retrofit assistance and installation services, Residential Energy Affordability Program (REAP), and properly installed higher-than-code efficiency central air and heat pump equipment

For Commercial Customers
* Commercial & Industrial (”C&I”) New Construction - targets all new buildings and major renovations

* C&I Existing Buildings - addresses equipment purchases stemming from natural replacement at the end of useful life and retro-fits (discretionary replacement of functioning inefficient equipment)
LIPA has deemed the Efficiency Long Island program the most cost-effective resource option currently available. It is estimated that implementation of Efficiency Long Island will reduce CO2 emissions by about 12 million metric tons compared to the CO2 emissions that would be produced from new power plants burning natural gas.  This is equivalent to removing 2.5 million cars from Long Island roads.

A modest energy efficiency fee based on usage will appear on all customer bills to pay for investment in the program and to offset LIPA’s lost revenues. The fee will be implemented concurrently with a $28.6 million reduction in base rates to remove the energy efficiency portion of budgeted expenditures under the clean energy initiative. There will be separate recovery factors for residential and small commercial customers and large commercial customers. Residential and small commercial non-participant bill impacts are estimated at $40 per customer per year, and the line will be separately displayed on bills bringing LIPA in-line with private utilities regulated by the Public Service Commission which imposes a System Benefit Charge for efficiency programs.

Participants in the efficiency program will see varying benefits depending on their level of participation. A typical residential customer participating at a moderate level - for example, replacing six incandescent bulbs with CFL’s, getting a central air conditioning unit tune up and duct work sealed by a participating contractor should recoup his or her investment in a few months and save approximately $90 on the annual bill.  A commercial business under rate code 281 using approximately 62,000 kWh per year ($11,200) that replaces lighting, converts equipment to new ENERGY STAR equipment and installs some lighting and cooling controls, should recoup the investment in less than two years and should see an annual savings of approximately $2,500.
    
“NRDC [Natural Resources Defense Council] commends LIPA for its Efficiency Long Island program - it will result in savings for Long Islanders and many other benefits,” said Donna De Costanzo, Senior Attorney for the national organization. “The Efficiency Long Island effort represents another strong step towards meeting Long Island’s energy needs, as well as reducing greenhouse gas emissions and other pollution, lowering consumer energy bills and increasing energy independence. It marks a large step forward not only for environmental benefits, but also for consumer benefits,” Ms. De Costanzo said.

“What LIPA is doing here is, in fact, building a five hundred ‘negawatt’ plant - negawatt with an ‘N’ because they are building efficiency into their power,” said Gordian Raacke, Executive Director of Renewable Energy Long Island. “It will be distributed all over the Island. It will never use a drop of fuel oil or need natural gas. It will save carbon dioxide and greenhouse emissions and most importantly, for most people it will save money.”

Energy efficiency programs were a significant recommendation in Governor David A. Patterson’s Renewable Energy Task Force which released its first report in February 2008. The New York State Public Service Commission is currently considering mandating such programs on all utilities under its jurisdiction.

For more information on the Efficiency Long Island Program visit www.lipower.org.

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LIPA, a non-profit municipal electric utility, owns the retail electric Transmission and Distribution System on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens.  LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered.  In 2006, LIPA outperformed all other overhead electric utilities in New York State in all three major reliability categories.  LIPA does not provide natural gas service or own any on-island generating assets. More information about LIPA can be found online at: http://www.lipower.org.

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