William G. Jackson Jr.Director of Sales, Marketing &

Economic Development

Long Island Power Authority

 Is Cogeneration Compatible with Utility Interests?

                                                               

Who are We? A New York State Instrumentality

Not quite a Municipal Service Not a Cooperative Not an Investor-Owned

LIPA is a State Authority serving approximately 1.1 million electric customers on Long Island, New York

Established in May of 1998, LIPA is one of the very few “Outsourced Utilities”

LIPA owns and operates the electric Transmission and Distribution System

Long Island Power Authority

Predominately a Residential Marketplace serving 940,000 residential

customers – with today’s technology,

not a prime Cogeneration Target

Commercial Marketplace 128,000 accounts 346 Major Accounts with revenues in

excess of $500K/mo.

LIPA’s Customer Segmentation

LIPA’s Current Capacity Scenario

LIPA Actual Peak Load June 26th @ 5 PM = 4,794 MW

LIPA Weather Adjusted Peak (+21 MW) = 4,815 MW

Compromise w/ NYISO on Peak Load (+41 MW) = 4,835 MW

Agreement reached on 2004 LI Load Growth: 1.15%

2004 LIPA Peak Forecast = 4890 MW

Long Island Generation Capacity = 4,000 MW

Power LI CT Units = 400 MWs

Freeport Unit = 71 MWs

LI Import Capacity = 930 MWs

Cross Sound Cable = 330 MWs

Total LI Power Supply =5791 MWs

IOU versus Public Power Shareowner Value versus Customer

Satisfaction What’s the Potential Liability

Evaluation Factors Social Responsibility Fiduciary Responsibility The 5 – 9’s Dilemma

How do Utilities View a Cogeneration Installation ?

Is the Sale of Every kWhr a Reward? All Kilowatt-hours are NOT created Equal

What about Capacity The Dreaded Stand-by Charge (SC-12)

What about the Loss of Asset Recovery? Is this a Shared Expense? If the Cogen Developer and the Cogen Customer

doesn’t Pay, Who Does?

So now, Who owns the Customer?

So, What’s at Stake?

“Bubba Don’t Care”

andNeither Does

Mr. CEO

The Customer’s Perspective

Who Wants to be a Utility?

Becoming the Customer Advocate LIPA evaluators are AEE Certified Assessing and Auditing QF Status Working with the NYS DEC

Questions We pose to Customer Can you Use the Heat? Is unit size based on Heat or Power

Output

LIPA’s Process for Approaching a Cogeneration Proposal

Do You Wanna Make Electricity or Chocolate?

LIPA’s Process for Approaching a Cogeneration Proposal

LIPA’s Process for Approaching a Cogeneration Proposal

Is Cogeneration a DG Opportunity Can we Develop an Economic Market? Are Customer’s willing to Bear any Risk? How about the Cogeneration Developer?

What About Utility-Owned Cogeneration Customer’s continually seek Peak Shaving What do Cogeneration Companies Really

Want to Do?

WGJ’s Futuristic Perspective

Customers ARE interested in Cogeneration, BUT…

Until we can make itETDBW

“Easy to do Business With”

Success will be Fleeting

Summary