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Politics allegedly linked LIPA, Plug Power
BY MARK HARRINGTON
mark.harrington@newsday.com

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May 10, 2007

Over the past half-decade, the Long Island Power Authority spent some
$14 million to buy and install more than 160 experimental fuel cells
from a politically connected Albany-area company. But today, only four
remain in place.

The others reached their life span and were sent back to Latham-based
Plug Power Inc., which recycled them, according to a company
spokeswoman. LIPA didn't receive a refund because the units, some of
the first to be tested in the field, fulfilled an expected warrantee
period.

LIPA, which has championed the program since 1999, says that it went
off as planned, that the short life span of the "clean energy" power
units -- three to 18 months -- was what it anticipated, and that
results from the trial will help shape a much larger proposal for fuel
cells in the bidding stages.

Powerful connections

But critics say LIPA's pilot project with Plug Power raises questions
about political connections potentially influencing business deals, in
this case in the name of clean energy. Three one-time Plug Power
directors, some with ties to LIPA or its predecessor, the Long Island
Lighting Co., were high-level insiders in the administration of former
Gov. George Pataki, including Louis Tomson, once Pataki's chief energy
policymaker. And Plug Power in January was back in the news when
records showed that state Sen. Joseph Bruno's campaign committee held
shares in Plug Power and a related company since 2000, before selling
them last year at a loss. Plug Power shares reached a record high of
$149.75 in early March 2000, but have never regained that footing. Its
shares yesterday closed at $3.35.

"What you want to hear about projects like this is that they were
awarded based on their merit, not connections," said Rachel Leon,
executive director of Common Cause New York, a watchdog group.

Kessel Wednesday said politics played no part in the decision to do
business with Plug Power, which the authority conducted through a no-
bid contract.

He noted that at the time it was initiated, Plug was among the few
companies working with fuel cells, particularly in New York state. "No
one from the Pataki administration ever contacted me about using Plug
Power," he said. "Political connections played no role."

He also said the money LIPA spent was worth it. "I don't regret for
one minute investing in fuel cells," he said. "Even if it's by a small
amount, they're offsetting emissions. I think the technology is
getting there and it will get there."

In a parade of appearances and news releases since 1999, LIPA has
touted projects with Plug Power as a next great hope for clean energy.
"LIPA is proud to be a pioneer in the field of fuel cell technology,"
Kessel, then LIPA chairman, said in July 2002, after the authority
placed yet another fuel-cell pilot at the Town of Babylon offices.

"LIPA believes that fuel cells hold the key to achieving true
distributed generation that makes economic and environmental sense."