LIPA, KeySpan propose Long Island, N.Y. power plant

NEW YORK, July 11 (Reuters) - In an effort to alleviate Long Island's long-term energy worries, the Long Island Power Authority (LIPA) and KeySpan Corp. proposed Wednesday the placement of power generating units in Glenwood, N.Y.

LIPA, a New York state-owned power distribution company, said in a media advisory announcing the project the two units would provide close to 160 megawatts of electricity.

One megawatt provides enough power for about 1,000 homes; therefore, the two units would supply enough power for about 160,000 customers. This is not the first power plant LIPA has proposed for Long Island this year.

In June, LIPA sought proposals to build 80 megawatts of gas-fired generation at Shoreham expected to be operating by next April.

Last summer, LIPA asked the New York Power Authority, another state agency that owns power plants and distributes electricity to municipal governments throughout the State, to install a 44 megawatt gas-fired generating unit at Brentwood for this summer.

In addition to the turbine NYPA built on Long Island, NYPA also installed 10 turbines in New York City for use this summer to help ensure the reliability of the city's power grid.

For the hottest days of this summer when air conditioning usage pushes loads to their annual peaks, LIPA signed up commercial and industrial customers in an energy conservation plan and urged residential customers to use power wisely.

LIPA AND KEYSPAN

LIPA is also considering the purchase of about 4,000 megawatts of generating capacity located on Long Island from KeySpan.

KeySpan owns and operates 13 generating sites on Long Island. The units were previously owned by the Long Island Lighting Co. (LILCO), which merged with the Brooklyn Union Gas Co. in May 1998 to form KeySpan.

In May 1998, LIPA purchased LILCO's retail electric business on Long Island. LIPA distributes power to nearly 1.1 million customers in Nassau and Suffolk counties.

While LIPA did not acquire LILCO's on-island electric generating units, the Authority did enter into a generation purchase right agreement with KeySpan in 1998 that grants LIPA the right to acquire Long Island's power plants beginning this spring.

Under the terms of the agreement, LIPA must provide its interest to exercise its generation purchase right to KeySpan between May 29, 2001 and May 27, 2002.