KESSEL: (commenting about the pollution from Freeport’s diesel generators) It affects the people of Merrick and other surrounding communities as well. Air doesn’t stop at the borders of communities.

They are hurting their own residents financially, because they are jeopardizing the future energy security of the Village of Freeport. Ultimately, Freeport’s failure to work with us and enter into a fair agreement will force electric rates up in the Village. I think that is very unfair to the residents of the Village of Freeport. I wish the Mayor were here tonight. I’ve told him this on the telephone. The Village of Freeport has this last opportunity to help us get through this.

I want to say one other thing. At some point, we are going to walk away from this project very soon, because we need these turbines on Long Island. If we don’t get these turbines put up around Long Island for next summer, lights are going out in Merrick and Bellmore and all the other areas of Long Island. I have to at some point fish or cut bait here with Freeport. I think that point is next week.

I’m going to tell you this now. If we can’t get a deal from Freeport, immediately, and it is right there and ready to be done, we are pulling out and they are on their own. It is going to be up to you and people like you to make sure that that plant is not allowed to continue to operate.

Just think of this for a second, Chuck [Senator Charles Fuschillo]. If they don’t make a deal with us and the DEC decides that that plant shouldn’t continue to operate, then, the lights go out in Freeport. Mr. Mayor, the people of Freeport, we are here to help you, we are here to work with you, we don’t want to hurt you, but the time is now to make a decision. And trust me when I tell you, that the offer that is out there, it is a solid offer for the Village of Freeport.

If you have a couple of questions, I’d be glad to answer them.

MERRICK RESIDENT: With all the political people involved, I’d like to know how the Mayor of one town could have so much power to destroy so many lives? What is this man gaining by keeping this diesel disgusting plant running?

KESSEL: Those are two good questions. The answer to the first question is I don’t think you’ve lost the battle. The battle has just begun. The Governor went to the DEC and said that this is something that is a priority for me. I want you to take a look at the permit to make sure that it is appropriate. He came to me and asked me and said, I want you to go down there and work with Chuck [Fuschillo] and do whatever we can to try and solve the problem. There is a regulatory process. My opinion is you are going to win the battle and Freeport is going to loose the war, because in my view, they are going to loose the diesel plant and they are not going to get anything in return for it. You have to let the process work.

As far as what it is that he [Glacken] hopes to gain. I think they want to ultimately sell electricity into the market. They have some deficit bonds and they think they can pay them off quicker. There is a financial incentive for them to try and keep the plants open. The problem with that is, I don’t think you should be in the position where you destroy or ruin the environment for some kind of financial incentives, which are in my view, minimal at best.

My view is that Freeport is not big enough to make a lot of money off of this. They could probably make some money by selling into the day ahead market in the summer peak period. I think the village’s prime responsibility is to provide reliable electricity at a reasonable cost. I think they need to do that.

MERRICK RESIDENT: If they accept the deal, how long will it take to put the new generators up?

KESSEL: We are prepared to have this in for next summer.

MERRICK RESIDENT: And will the other ones run?

KESSEL: No. They will be shut. I want to make this clear. There is no deal if the diesels are not shut down. We are prepared to do this right now. We want these facilities on line for next summer and we would want the diesels shut down concurrently.

I make you this promise. If they go forward on their own, whoever the developer is they pick to do this for them. I am going to go to that developer. I’m probably going to get sued for saying this. You have my word on this. If in fact, a developer is chosen to do this around our backs, I’m going to go to the developer and say, if you do this deal with Freeport, we are never going to do a deal with you anywhere on Long Island in the LIPA service territory.

MERRICK RESIDENT: Who is going to put in the gas turbines [at PPN2]?

KESSEL: LIPA is not going to put them in. We have offered to bring in private developers to work with LIPA and with Freeport in a deal, that in return for them closing the diesel generators, we would have a private developer build two LM6000s on the site. We would pay for most of Freeport’s costs and we would purchase the power that Freeport didn’t need. Freeport indicated that they want the LM6000s, but they want to keep the diesels operating at the same time. We are not going to make that deal. If Freeport sticks to that, we will walk away.

MERRICK RESIDENT: Do you think that Freeport is being headstrong?

KESSEL: The Mayor said to me last week that Freeport feels that Freeport can meet all of the requirements that the DEC will require of them and if they can’t, they are prepared to sue.

MERRICK RESIDENT: What happens if Freeport doesn’t go along?

KESSEL: Freeport is going to have an energy crisis of their own. Ultimately, they are not going to have enough electricity to service their residents in a reliable way.

FNYN: No matter who builds the LM6000s, Freeport is still short of capacity. How does that 88 MW [the regulators use the 79 MW number] of generating capacity work to meet the power requirements of Freeport and the ISO?

KESSEL: The answer is simple. If Freeport doesn’t make the deal and they don’t get the 79 MW, they have the same ISO problem that they would have had. They loose 79 MW.

FNYN: Does that eliminate the problem?

KESSEL: It eliminates the problem for a time. We talked to the ISO and we believe that they will be able to meet all ISO requirements. In fact, the Governor told me that if Freeport goes forward with the project, he would want LIPA to meet with Freeport and the ISO, to make sure that all requirements ---.

FNYN: So that 80 MW would go towards the credit of Freeport for meeting the ISO, or only a portion of that?

KESSEL: Whatever Freeport used. Whatever Freeport used is part of that.