$700M wind power project scrapped in NYC area

GARDEN CITY, N.Y. -- In the end, it was the cost that blew away the wind farm. Long Island Power Authority Chairman Kevin Law confirmed Thursday that the utility is scrapping plans to create a $700 million wind energy park with 40 turbines in an 8-square-mile area in the Atlantic Ocean, not far from Jones Beach.

"It's just too expensive," Law told The Associated Press. "It's not going to work. ...This is an economically based decision. We didn't even have to consider environmental or aesthetic concerns."

Initially popular with environmental activists, politicians and residents, support for the project has faded since it was first proposed in 2003, both because of construction costs, as well as fears the pristine landscape of Long Island's south shore beaches would be permanently altered.

It is the second offshore wind project to be scrapped in recent months. A developer in South Texas called off construction of about 170 turbines there after determining it no longer made economic sense to proceed. That developer said building an offshore farm would have been more than double the cost of one on land.

Plans are proceeding for an offshore wind farm in Massachusetts, where a company called Cape Wind hopes to build 130 windmills in Nantucket Sound. Cape Wind has not said how much that project would cost. Developers in Delaware also are planning an offshore wind farm.

Original estimates for construction on the Long Island wind farm were between $150 and $200 million. In 2004, FPL Energy won the right to build the project with a bid of $356 million, pending regulatory approvals. The latest estimates put the cost at $697 million.

Although FPL would have paid for the cost of construction, they inevitably would have passed on those costs to Long Island electric ratepayers, Law said. He said an independent report commissioned by LIPA on the economics of the $700 million project released Thursday found the costs to be "significantly" higher than traditional forms of energy generation. That report found that the cost for the transmission cable bring the power to shore, as well as financing, could bring the final tab to over $800 million.