NYPA concerned with slow pace of upgrades at electric plant

02/05/2014 1:00 PM |

Katharine Schroeder file photo | Workers at the at the Greenport power plant in 2011.

Now seven years into a $5.8 million project to upgrade and modernize the Greenport Municipal Electric Plant — with no end to the work in sight — the New York Power Authority is demanding more oversight of the village electric system in the form of more regular progress reports and potential rate adjustments for customers.

A NYPA official sent a “letter of agreement” to Greenport Mayor David Nyce, dated Nov. 25, expressing dissatisfaction with the pace of construction. The letter, written by Michael Lupo, a director of market analysis and administration, called the work “less rapid than expected.”

[Scroll to the bottom to read the entire letter]

“Authority staff expressed its concern with the village’s pace of completing its electric system infrastructure upgrade plan,” the letter reads. “Upon request by authority staff, the village shall provide a financial report to staff more frequently than once every six months.”

The letter, acquired by The Suffolk Times from NYPA upon request, also says that the regulating authority would conduct a full review of the village’s electric system’s “cost of service” and recommend appropriate rate adjustments after Nov. 30, 2015, or upon completion of the project — “whichever is earlier,” Mr. Lupo wrote.

The letter was delivered to the mayor within weeks of the village being slapped with a $108,000 penalty by New York Independent System Operator — which works closely with NYPA, a public benefit corporation — after a system failure during a required energy measurement test of the plant in the spring. (Unlike most of Long Island, Greenport residents do not get their energy through PSEG.)

Details of the penalty were not provided last year to village ratepayers, many of whom contacted Village Hall after seeing bill spikes in December, when the cost of the penalty was passed on to Greenport electric customers.

At a meeting Jan. 27 — after news of the $108,000 penalty reached a reporter and was published on suffolktimes.com — Mr. Nyce attempted to explain the ongoing billing issues involving the village electric company, which included the $108,000 penalty.

After the meeting, when asked by a reporter why the public wasn’t provided with more information last year about the penalty, he apologized for his “handling of how that got out.”

Since then, the mayor has not returned phone calls, emails or text messages from a reporter requesting clarification on issues with the bills and at the plant.

According to the November letter, NYPA is requiring the village meet several requirements, including establishing two funds — one dedicated to payments related to the electric system upgrades and another specifically for revenue generated through customers electric bills.

The village will also be responsible for completing an audited financial statement to NYPA on payments related to the project, including for the year 2013. These reports are needed to monitor the progress of the upgrades as well as the village’s borrowing related to the project, the letter reads.

In addition to the audits, the village is expected to provide separate financial reports to NYPA more frequently than one every six months.

Finally, NYPA plans to conduct a full review of the village’s electric plant and its methods of financing the project as soon as work is complete, or by Nov. 30, 2015.

A NYPA spokeswoman said Monday the agency needed more time to clarify reporter questions concerning the letter.

As for the slowed work at the power plant, Village Board members said they couldn’t say when the project would be fully completed.

Initial design problems having to do with analog versus digital systems, and a suddenly unresponsive electrical contractor, contributed to the work’s slower-than-expected pace, said village Trustee George Hubbard, who also serves as deputy mayor.

Trustee Mary Bess Phillips said the first phase of the project has been completed and that Phase II designs are being worked on.

The power plant was constructed in 1898, making Greenport the first municipality in Suffolk County to own a lighting/power plant. To this day, the Moores Lane facility is the oldest municipal utility on Long Island.

Initially, the upgrades were needed to modernize the electric plant’s ailing infrastructure, Mr. Hubbard said Monday. The idea was first floated in 2004, under former mayor David Kapell, but only began to take shape after Mr. Nyce took office April 2007, he said.

“It wasn’t safe,” Mr. Hubbard said of the state of the plant before the upgrades.

After NYPA officials gave the project a green light, the village hired New York City-based Genesys Engineering P.C. to design and oversee the first phase of work. The design plans were in place and work began in 2010 on the Phase 1 overhaul, which included upgrades to the village power grid, the plant’s switchgear controls and five diesel generators, among other things, Mr. Hubbard said.

Work on Phase I, which wrapped up in August 2013, was expected to end between 2011 and 2012, Mr. Hubbard said. But shortly after construction began, the project encountered several delays, mostly due to difficulty finding specialty parts, he said.

The designs, which were finalized in 2010, called for the use of analog technology, though come 2010, the almost exclusive use of digital systems in such plants made it difficult to find analog parts, Mr. Hubbard explained. Problems continued into last year, when an electrical contractor, Elemco Building Controls of Islandia, failed to complete its role in the upgrade and then became unresponsive to the board, he said.

Only when the Village Board threatened legal action in the summer of 2013, did the contractor return to the job site, Mr. Hubbard said.

The board agreed in November to keep Genesys on as its engineering firm, despite backlash from community members, including former village trustee and former village utilities director William Swiskey, who believes Phase I of the project took too long and was poorly executed.

“I think it was a very poor move [to hire Genesys again],” Mr. Swiskey said Tuesday. “This project should have been done within six months. What are they doing right?”

Genesys is currently designing plans for Phase II of the project, Mr. Hubbard said.

Reporter phone calls for comment from Elemco and Genesys were not immediately returned.

About $3.1 million of borrowed money has already spent on the plant upgrades, in addition to $1.2 million the village had in cash reserves specially earmarked for the project. The board has $1.5 million in borrowed money on hand to spend to complete the project’s second phase, including a $1 million bond the Village Board authorized last year, Mr. Hubbard said.

Phase II calls for the removal and replacement of switchgear panels and the installation of two new feeder relays that transport current, Mr. Hubbard said.

The village plans to put work for Phase II out to bid in the spring, he said.

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NYPA letter to Greenport