PSEG Letter - Major Disappointment

The following letter from PSEG is a major disappointment, to say the least.

It removes all options from The Town and Village, and gives them all to PSEG. It allows us to review but not challenge costs, it does not address alternatives we are currently negotiating with PSEG to Halt the Work on the Current Project at Once, by installing generators until the underground project is fully live in two years. We do not want to go live on the 23/33K volt overhead poles ever. Our health, safety, environmental concerns, the reasons we are going underground in the first place, cannot be allowed overhead.  This is a breach of trust and fails to live up to our intent.

March 14, 2014

The Honorable Larry Cantwell The Honorable Paul Rickenbach

Supervisor, Town of East Hampton Mayor, Village of East Hampton

Town Hall - 159 Pantigo Road 86 Main Street

East Hampton, NY 11937 East Hampton, NY 11937

Dear Supervisor Cantwell and Mayor Rickenbach,

It was a pleasure meeting with you last week, on March 5th and March 7th, to discuss the Town/Village of East Hampton’s concerns regarding PSEG Long Island’s 23/33 kV overhead pole-line project connecting the East Hampton and Amagansett substations. As we discussed, PSEG Long Island is executing the project under its obligations as a service provider to the Long Island Power Authority (LIPA)1 by, among other things, maintaining electric system reliability for the residents of Long Island in the LIPA service territory.

I want to first reinforce PSEG Long Island’s continued commitment to working with you to find a solution to the concerns you raised at these meetings. As promised, following our March 5th public meeting, PSEG Long Island quickly responded to your request to consider alternatives to the existing overhead project, including evaluating the feasibility and potential costs of undergrounding options on the LIRR right-of-way and elsewhere.

On March 7th, we met again with a smaller working group of interested parties, and PSEG Long Island presented a proposal intended to address your concerns. At the conclusion of the meeting, the group tentatively agreed to work to implement PSEG Long Island’s proposal, which would need to be documented in a formal agreement between the Town/Village of East Hampton and LIPA. I also committed to documenting and sending you the following summary of our proposal.

1. PSEG Long Island Commitment: PSEG Long Island will publicly commit to take the steps described in this letter upon completion of an acceptable and binding written agreement.

2. Cost Responsibility: The entire agreement, and all steps necessary to execute the projects described in this letter, will be subject to the Town/Village of East Hampton paying PSEG Long Island for all costs that are incremental to the current 23/33 kV overhead pole-line project between East Hampton and Amagansett substations.

There will be no assignment of costs that are incremental to the current 23/33 kV overhead pole-line project to any Long Island customers outside of the Town/Village of East Hampton nor will PSEG Long Island or LIPA be responsible for the payment of these costs (whether the project is completed or in the event that the project is abandoned).

When the work is completed, PSEG Long Island will provide the Town/Village of East Hampton with a summary of the project costs. The Town/Village of East Hampton will have the right to review, though not challenge, these incremental costs.

3. Completion of Existing Project: PSEG Long Island will proceed to complete and energize the existing 23/33 kV overhead pole-line project as planned by the end of May 2014, in time to maintain electric system reliability for the summer of 2014 and thereafter.

1 PSEG Long Island’s obligations to LIPA are set forth in the Amended and Restated Operations Services Agreement dated December 31, 2013.

4. Underground Alternative Project – Preliminary Engineering Analyses: PSEG Long Island will initiate preliminary engineering studies to identify a route, develop a conceptual design and construction approach, establish permitting/easement requirements, and quantify the costs for a project to relocate the new 23/33 kV overhead pole-mounted circuit underground. Several routes will be considered, with the underground route to run between the East Hampton and Amagansett substations.

It is expected to take 4 to 6 months to complete the engineering studies once an appropriate payment arrangement has been agreed upon, as described in Paragraph 2 above, and once work begins.

5. Underground Alternative Project – Detailed Design and Execution: Upon completion of the preliminary engineering studies identified in paragraph 4 above, and upon agreement as to the route, estimated cost and payment approach (consistent with Paragraph 2) for an underground alternative to the 23/33 kV overhead solution, PSEG Long Island will commence detailed design and execution of the agreed upon underground project. This execution approach is subject to PSEG Long Island’s timely receipt of required permits, right-of-way easements, and other necessary approvals required for execution of the underground alternative project and such approvals not adversely affecting the existing 23/33 kV overhead pole-line project that was put in service. PSEG Long Island will execute the work to complete the underground alternative project as quickly as possible given these contingencies.

6. Removal of 23/33 kV Overhead Circuit and Pole Restoration: Once the underground alternative project is completed and the new underground circuit is energized, PSEG Long Island will de-energize and remove the 23/33 kV overhead circuit from the poles, and will restore the poles back to their original height.

Poles will be restored to their original height by either (a) leaving the new poles in place and cutting them down to their original height, or (b) replacing all new poles with another set of new poles, which will also be at the original height. At the conclusion of this step, all poles will be at their original height, with original attachments (includes existing cable and telephone attachments on lower section, and existing 13 kV circuit above).

PSEG Long Island will complete this work as quickly as possible (schedule will be dependent on pole restoration option selected by the Town/Village) once PSEG Long Island receives any necessary permits, approvals and/or land rights as described in paragraph 5 above associated with this work, appropriate payment arrangements have been agreed upon per paragraph 2 above, and work begins.

This letter is not a commitment or agreement to sign a formal contract but instead is being provided to you for clarification and discussion purposes only. In addition, any agreement we do reach may need to be reviewed and approved as necessary and appropriate.

Supervisor Cantwell and Mayor Rickenbach, thank you again for your commitment to working with PSEG Long Island to find a solution to this issue, and please do not hesitate to call me to discuss this further.

Respectfully,

PSEG Long Island LLC

By: ___________________________

David Daly, President and COO

cc: John D. McMahon

Audrey Zibelman