Utility Barred From Billing Public for Plant

New York regulators, citing mismanagement, Wednesday barred Long Island Lighting Co. from collecting from consumers a record $1.35 billion for construction of an unopened nuclear power plant.

No regulatory agency in the United States has ever barred a utility from collecting so much money to pay for a power plant, the state’s Public Service Commission said.

The Shoreham plant is expected to cost $4.2 billion. Under the order, the company would have to use its earnings to come up with the $1.35-billion share.

The utility had announced June 13 that it would ask the appellate division of the state Supreme Court to overturn any PSC order blocking it from billing customers for the full construction costs of Shoreham.

PSC members said the utility company’s mismanagement was responsible for some of the cost overruns and delays that have plagued the Shoreham project. They said the utility should not be allowed to make customers pay for company mistakes.

Costs Soared

In 1969, the Shoreham plant on the north shore of Long Island, about 50 miles east of New York City, was forecast to cost $261 million to build and to be operating by May, 1975--compared to the latest cost estimate of at least $4.2 billion for the unopened plant.

Utility spokeswoman Carol Clawson said recently that all construction costs of Shoreham “were incurred prudently.”

“High costs associated with the Shoreham plant were the result of regulatory changes, high construction costs in the New York metropolitan area, delays caused by opposition to the plant and refusal of local government to support emergency planning,” Clawson said.

The utility is fighting legal challenges in an effort to win permission from the federal Nuclear Regulatory Commission to open the Shoreham plant.

The firm, hit hard by the financial drain of the Shoreham project, managed to avoid bankruptcy last year thanks to new financing and an austerity plan.