Caithness energy center in Yaphank sold to Connecticut energy-investment firm

Caithness Long Island Energy Center, one of Long Island’s largest, newest and most-used gas-fired power plants, has been sold to a Connecticut-based energy-investment firm, months after its owners disclosed new plans for the Yaphank station.

Terms of the purchase by Lotus Infrastructure Partners of Greenwich, Conn., were not disclosed. 

The Caithness center, which produces around a quarter of Long Island’s on-island energy from an industrial park in Yaphank, is a primarily gas-fired power plant that began producing for the LIPA grid in 2009, after considerable opposition from local apartment dwellers and homeowners. It had widespread political support from state and local officials and from LIPA, which has a $1.67 billion contract for the 365-megawatt plant that expires in July 2029. 

 "Caithness has been greatly appreciative of the support it has gotten from a variety of elected, appointed and non-government officials who made this project a success over many years," said Ross Ain, president of privately held Caithness Energy, in an interview Wednesday. 

Caithness Energy, of Red Bank, N.J., has been selling power assets after 60 years in business as the company winds down operations, including plants in Pennsylvania and Ohio that sold earlier this year for $3.5 billion, according to reports. It also developed one of the nation's largest land-based wind farms, an 845-megawatt project, in Oregon.

Caithness earlier this year disclosed plans to construct two separate battery-energy storage facilities on the 82-acre Yaphank site, which also includes a substation that can link any power easily to the electric grid. The battery plans are included in the sale. 

Caithness also has been mentioned in U.S. Energy Department documents as the potential site of a considerably larger gas-fired power plant, Caithness II, that could provide energy for a proposed data center at Brookhaven National Laboratory. The proposal remains under federal review. LIPA and its grid manager, PSEG Long Island, had previously planned to build Caithness II, a 750-megawatt power plant, on the site, but discontinued the plans a decade ago after projections that energy use on Long Island was declining. Caithness filed an unsuccessful lawsuit to challenge the decision. 

Much has changed since then. 

Fossil-fuel powered plants have been given new leases on life by the Trump administration, after facing retirement mandates under New York State’s aggressive 2019 climate law. Where the state had envisioned all carbon-emitting plants would be retired by 2040, it is revising an energy plan that foresees them lasting longer, particularly as the Trump administration has derailed new wind and solar projects. LIPA and the state had envisioned offshore wind as the primary replacement for gas- and oil-fired plants. 

In announcing the purchase, a top Lotus official noted that power-hungry industrial and data center investments were advancing in the region and said the efficient Caithness Long Island plant was "well-suited" to provide power for "decades to come."

LIPA’s contract for power from Caithness has two five-year options to extend the contract. In 2023, the most recent year available, LIPA spent $102 million buying energy from Caithness, LIPA records show. 

Putting aside Long Island solar arrays and the South Fork Wind Farm, Caithness has long billed itself as Long Island’s cleanest and most efficient gas-fired plant (it also can operate on fuel oil). It uses combined-cycle technology to generate electricity, first by spinning a turbine, then by capturing the heat from the process to generate steam to spin a separate turbine. Caithness said it uses less water than other large, older Long Island plants. Its water usage of under 20 gallons a minute is considerably less than Long Island's other large gas-fired plants, which draw millions of gallons from the Long Island salt-water sources. 

Lotus owns an array of power plants, transmission lines, solar and wind arrays. Among its assets is the Marcus Hook combined cycle power plant, which is contracted to LIPA through 2030, with a total $913.9 contract value. Former owner NextEra sold Pennsylvania-based Marcus Hook to Lotus predecessor Starwood Energy Group in 2016 for $760 million.

In a statement, Lotus chairman and chief executive, Himanshu Saxena, noted the efficiency of the Caithness plant and said it was "well suited to provide reliable, dispatchable generation into the New York power market for decades to come."

"As industrial and data-center related investments continue to advance in the region, we expect Caithness Long Island to play an increasingly critical role in sustaining these initiatives and providing reliable power for Long Island and New York State," Saxena said. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.