The Long Island Power Authority saved over $20 million this summer by using the new Neptune electric transmission cable to bring nearly 1.2 million MWh of low-cost power to Long Island during the peak summer season in July, August and September when demand for electricity is highest.

The Neptune cable, which is privately owned and operated and links Long Island directly to Mid-Atlantic power supply resources for the first time, is estimated to save LIPA hundreds of millions of dollars in energy supply costs over the next 20 years.

When coupled with the nearly $200 million in savings by importing lower cost energy via the Cross-Sound Cable since June, 2004, the savings derived by the Neptune cable will help LIPA’s efforts to minimize its power supply costs.

“This historic power project has given Long Island direct access to a lower cost, more diversified power supply in the Pennsylvania, New Jersey and Maryland (PJM) power market that stretches from New Jersey to Illinois,” said LIPA President and CEO Kevin S. Law. “The money saved this summer is significant and in the long term will help us meet our objective of holding down our power supply charges as much as possible.”

The 65-mile long Neptune Regional Transmission System began commercial operations on June 30, 2007. It is an undersea and underground High Voltage Direct Current (HVDC) cable that runs from Sayreville, New Jersey, to New Cassel in the Town of North Hempstead in Nassau County. It can carry 660 MW of power, which is enough to meet the average electric demand of about 600,000 homes.

In 2004, Neptune was selected by LIPA as the off-Island component of a diverse portfolio of resources developed under a comprehensive request for proposals (RFP) process. The on-Island component is the Caithness Long Island Energy Center project, a 350 MW combined cycle generating facility currently under construction in Yaphank, Suffolk County, which is expected to be in service by the summer of 2009.

The PJM Interconnection controls more than 165,000 MW of electric generating capacity in all parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. By comparison, the electric generating capacity in the LIPA service area is about 5,000 MW.

PJM’s relatively low cost power sources include hydroelectric, biomass, natural gas, nuclear, coal and wind.

Under LIPA’s 20 year agreement with Neptune, up to 660 MW of electricity is delivered to a station in Sayreville, New Jersey, where it is converted from alternating current (AC) to direct current (DC) for efficient transmission to Long Island via the undersea and underground HVDC cable. The cable route travels east 51 miles under sea from the Jersey shore to a point south of Jones Beach on Long Island, then goes north underground to another station in New Cassel where the electricity is converted back to AC for use on LIPA’s system. The power is delivered to LIPA’s Newbridge Road Substation in Levittown.

To get the power out to LIPA’s grid, the Newbridge Road Substation was substantially upgraded, and new underground transmission lines were installed that connect it to the East Garden City Substation to the west, and the Ruland Road Substation to the east in Melville. Both the East Garden City and Ruland Road substations underwent major upgrades to receive the power and make it deliverable to LIPA’s customers all across Long Island.

The LIPA Board of Trustees approved a firm transmission capacity purchase agreement (FTCPA) for the Neptune project in September 2004. The Office of the State Attorney General and the Office of the State Comptroller reviewed the FTCPA and approved it in January 2005. Construction of the Neptune system began in July 2005.

Neptune is the second interstate off-island cable connecting LIPA’s grid to the mainland. In June 2004, the 330 MW Cross-Sound Cable went into regular commercial service, linking Shoreham, Long Island to New Haven, Connecticut. Together, the Neptune and Cross-Sound cable systems provide LIPA with direct access to two independent power pools in the PJM and New England markets. They add a combined 990 megawatts of off-Island resources to LIPA’s supply.