GLACKEN: Mr. Lilker.

LILKER: Thank you, your honor.

Can you tell me how big a portion of power plant two is going to be utilized?

GLACKEN: It’s a diagram. I don’t know what the square footage is.

Can you answer that Mr. Perkins? Do you know? [Perkins is an employee of the Electric Dept.]

PERKINS: I have no idea.

GLACKEN: It’s basically pads, right. It has to be pads. (Perkins tried to speak, but was unintelligible, as Glacken spoke over him). Do you know what the dimensions of the pads are?

PERKINS: Off the top of my head, no. It depends on ---

GLACKEN: That’s going to be in the bid specs, right?

PERKINS: Well, no. That actually depends on which unit actually wins the bid.

(Perkins and Glacken speak at the same time. Perkins from the back corner of the room. Both are unintelligible)

GLACKEN: (To Perkins) So you can’t be more precise than that at the present time?

LILKER: You don’t know. That’s your answer?

GLACKEN: I think I’ve answered that question.

LILKER: It is my understanding that once that property is leased, there are going to be two generators. Is it possible that there will be two separate owners for those generators?

GLACKEN: If we don’t exercise that option, perhaps.

(After a brief conversation regarding ownership there was still some confusion. The question was rephrased).

LILKER: I am obviously not being clear and I apologize. Is it possible that after this goes out to bid and there are two more generators on that site, could one operator operate one and another operator, operate the other. Is that a possibility? In other words, Pennsylvania Power and Light could operate one and Keyspan could operate the other. Is that possible?

EDWARDS: It’s possible ---

GLACKEN: (interrupting ) But that’s not the way it is. It’s being bid as a package.

EDWARDS: It’s a package. It is possible that down the road --- both pieces of equipment will be subject to the option in favor of the village. That option militates against the circumstance happening that you describe.

LILKER: You say that option would be in favor of the village. Could you tell me what that option is?

GLACKEN: I’ll give you an example. We have twelve years left on the hydro power contract. Not just Freeport, but all the municipal electric utilities. If that is extended for another twenty-five or thirty years, sometime between now and 2013, we may not need to exercise the option, but if it is not extended and doesn’t look like it is going to be extended, then sometime around the year 2011, 2012, which will be approximately ten years when this thing is completed, we may very well need to exercise that option. And it will be there for whatever administration is responsible for running the village at that time.

We actually have more than one [option] at different time intervals. We are going to try and time it in such a way that will be most advantageous to the village.

LILKER: Thank you. Who operates the generators once the developer builds them? Is it LIPA or Keyspan or PP&L?

GLACKEN: It could also be our people.

EDWARDS: If a developer comes in like Florida Power and Light or Pennsylvania Power and Light, they develop and operate it. So they would develop and operate it -- or.

LILKER: Or what?

EDWARDS: They could develop and operate one. They could have a venture agreement with somebody else, that one of them develops and operates one. And the other one develops and operates the other one.

GLACKEN: It really doesn’t make a difference.

LILKER: Will the folks from Freeport Electric operate the plants?

GLACKEN: It’s possible.

EDWARDS: No.

LILKER: Is it a probability?

GLACKEN: We don’t know. We’ll just have to wait for the bids to come back.

LILKER: The bids are not going to come back to hire our people, are they?

GLACKEN: It could.

LILKER: He says no and you say it could. Mr. Edwards says no and you say it could. Which one is it?

EDWARDS: If the village exercises its option, possibly, it is possible I suppose that you could negotiate some kind of labor agreement with an operator or a developer for the village’s people to operate this device. I don’t frankly think that’s likely.

LILKER: The Freeport Electric employees, who have to live in this village, according to this, they won’t be required to work in those plants. The outside contractor can bring in their own people.

GLACKEN: There is nothing to say that we can’t make that part of the proposal.

LILKER: It’s not part of the proposal.

GLACKEN: Our plant is going to stay open. That’s where our people are going to stay.

LILKER: With all due respect, Your Honor, it’s our proposal. We are the ones putting it out to bid, not Pennsylvania Power and Light, not Keyspan, not LIPA. It’s our responsibility to put on the table that the folks that work for Freeport Electric operate these plants, not their folks. That would be in our proposal, not their proposal. And I don’t know why it is not in our proposal.

GLACKEN: I don’t think that is a requirement for the successful bidder. If they want to offer that as part of their proposal, I don’t think there is nothing wrong with that. As far as we are concerned, our employees are going to stay where they are.

LILKER: I would like to move on. Assuming that the air folks don’t approve running of Power Plant Two, the Fiats, the way they are now --

GLACKEN: That’s not going to happen.

LILKER: Assuming that may happen.

GLACKEN: Well, I wouldn’t assume that.

LILKER: That’s not likely?

GLACKEN: No it’s not.

LILKER: They [Fiats] will be able to run with the stacks the way they are and putting out whatever emissions they are putting out presently?

GLACKEN: I would think that or something very close to it.

LILKER: Something very close to it?

GLACKEN: Yeah.

LILKER: And they will be able to operate full time like that or would there be a restriction on that?

GLACKEN: Well, we don’t operate full time now. We only operate about seven or eight hundred hours a year.

(Glacken confirms hours with Perkins)

GLACKEN: A thousand hours in a whole year. That’s really a lot of operation. It just points out the absurdity of the argument that is being made to impose the restriction.

LILKER: What if they had to operate more?

GLACKEN: That had not been the history. That is totally absurd.

LILKER: When they were built, how many hours did they generate?

GLACKEN: What?

LILKER: I know the acoustics are bad in here. This is not a trick question. When they were built, how much were they used to generate? Do you know?

GLACKEN: In the beginning?

LILKER: In the beginning. When they were built. After we took the two Fiats down Sunrise Highway.

GLACKEN: (To Perkins) We haven’t operated that plant full time for years, right?

PERKINS: (Still in the back of the room, Perkins stood up and answered. Due to the Mayor’s continued failure to address the poor acoustics, his answer was totally unintelligible).

GLACKEN: This is really like far down the path.

LILKER: You are sure that they will never have to be operated at full capacity again? You are positive?

GLACKEN: I didn’t say that.

LILKER: What you are telling me is that they would be allowed to generate at the same emission levels that they are generating now?

GLACKEN: I don’t expect any restrictions on it at all.

LILKER: And you don’t expect any to be there?

GLACKEN: No I don’t.

LILKER: I see.

GLACKEN: And if there are we’ll meet them, that’s all.

LILKER: I’m sorry.

GLACKEN: And if there are we’ll probably meet them.

LILKER: And if there are, how much would you anticipate that would cost?

GLACKEN: I don’t think that it’s going to cost us anything additional to meet whatever requirements may be imposed. I don’t think that they are going to be imposed. I don’t think the case is a creditable case.

LILKER: I don’t know what you are talking about. My question sir is, if they were imposed, how much would it cost?

GLACKEN: I don’t think it would cost anything.

LILKER: It would be free?

GLACKEN: Mr. Lilker, I am not going to get into something with you that is totally speculative at this point. We are not going there. We are going out to bid on two additional engines that would be run by a developer.

LILKER: These are going to be dual fuel generators?

GLACKEN: Yes

LILKER: Who is going to pay for the gas line?

GLACKEN: The developer.

LILKER: The developer?

GLACKEN: That’s right.

LILKER: Is Keyspan going to pay for any of that?

(Glacken doesn’t answer)

Does Mr. Edwards know?

EDWARDS: It is up to the developer and Keyspan.

LILKER: So this isn’t going to cost us anything?

GLACKEN: We are not going to have any out of pocket expenses.

LILKER: The developer is going to come in here and make money. Why aren’t we doing this ourselves? Why won’t we own this power plant?

GLACKEN: At this point, I don’t know if we can afford to.

LILKER: It’s going to be pay as you go. It is going to be financed, right?

GLACKEN: Are you asking why we don’t buy or build one now?

LILKER: What I am asking is, why aren’t we doing this instead of a developer? We build power plant number two and number one. There are four generators in number one and three in number two. Why aren’t we building this?

GLACKEN: It is very expensive.

LILKER: It was expensive to build plants one and two.

GLACKEN: It would cost fifty or sixty million dollars. It’s going to cost over a hundred million dollars to build two. Do you have a spare hundred million dollars? I don’t.

LILKER: I think we would bond it.

GLACKEN: So you understand the wisdom of bonding?

LILKER: Sometimes. So my question is, why aren't' we doing it?

1GLACKEN: Right now the economics of the situation are not that simple.

LILKER: What situation?

GLACKEN: Thirteen hundred megawatts of power is going to be built on Long Island in the next three years. It may not be economical for us to build right now, but there may come a time down the road where it would be economical.

LILKER: With all due respect, a few minutes ago Mr. Edwards said our shortfall was 17 megawatts.

GLACKEN: The Independent Systems Operator of the State of New York has said we must come up with an additional seventeen megawatts of on island power. So we have to do that in any case. And even if we allow the builder to build his plants, we’d still have to do that. And if we don’t do it, there will be penalties that will be charged to us.

LILKER: So in order to satisfy the Independent Systems Operator, couldn’t we have just built a 20 megawatt dual fuel generator at power plant number one or two?

GLACKEN: Maybe we will do that, too, somewhere down the road. We need seventeen [megawatts] to meet our capacity needs. We still have to meet our actual demand. The amount of electricity that Freeporters need.

LILKER: I have one more question. This resolution says that this whole proposal is subject to the Village Counsel’s review and approval.

GLACKEN: What that means is he approves the specs before it goes out

LILKER: And is the Board going to have input into this.

GLACKEN: Of course.

LILKER: And are you going to do this at a public meeting?

GLACKEN: We don’t have to do it at a public meeting.

LILKER: Thank you Your Honor. I have no more questions.