Village Awards Power Plant 2 Bids: GFS to Construct New Generation Facilities, Welsbach to Construct New Gas and Electric Lines
(Freeport, New York, April 24, 2003) - The Freeport Electric Department announces that the Village has selected GFS, LLC comprising Greenman Pedersen Inc.⁄Fresh Meadows Mechanical Corporation⁄Peter Scalamandre & Sons, Inc. to construct the new Village generation facilities at Power Plant 2, and Welsbach Electric Corporation to construct gas and electric interconnection facilities. GFS, LLC will be responsible for the development on the Power Plant 2 site of the generation and ancillary equipment. Welsbach will be responsible for the construction and installation of the gas transmission line to interconnect with the KeySpan transmission system, and the new electric transmission line to interconnect the facility to the LIPA electric transmission system. The awards allow construction to proceed as soon as permits are received from the New York State Departments of Environmental Conservation and Public Service.
The bid awards were officially made at the Village Board meeting of April 24, 2003. The Village, Electric Department, Village Attorney Joseph Edwards, and Electric Department special independent counsel Duncan, Weinberg, Genzer & Pembroke, P.C. and independent engineers R. W Beck, Inc., and Gary Warner, P.C., had been involved in a rigorous review process since a total of six bids were received by the Village in early March. In accordance with NYS General Municipal Law regarding the bidding of public works projects, a number of criteria were applied in the bid evaluation. These criteria included project cost, qualification, licensing, and performance bonds, among others.
In order to expedite the construction schedule, the Village Electric Department has already issued Bond Anticipation Notes to finance the initial construction phases and has ordered and received critical, long lead-time equipment such as the LM6000 turbine, transformers and state-of-the-art emissions reduction equipment. It is anticipated that construction will start in May. The facility is expected to begin start-up operations and complete shake-down and testing by the end of this year.
Selection of the construction contractors is critical to the electric system of the Village and to mitigate potential rate increases. If the PP2 generator were not constructed, the Village ratepayers could be subject to a further rate increase to purchase electric generating capacity. The Village is required by regulatory requirements to either own and operate, or have contracted electric generating capacity from Long Island market sources to meet most of its peak energy demand. Without adequate capacity penalties may be imposed by the New York Independent System Operator. On top of the penalties is the additional expense of actually purchasing electricity from extremely volatile market sources.
LIPA has selected a developer for the construction of a second LM6000 at the Power Plant #2 site. Upon final negotiations with the Village, the developer will assume costs associated with common equipment such as the acoustical abatement wall, on-site transformer substation, and gas and electric distribution lines, which will be shared by the Village and LIPA developer. The monies from the developer's portion of the shared facilities will be used to reduce the cost of the Freeport Unit.