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Company With Solar Project Gone

July 21, 2008

By Mark Harrington, Newsday, Melville, N.Y.

Jul. 21–In 2003, FALA Direct Marketing of Melville took delivery of what was billed as one of the largest solar-power installations in the world, most of it paid for with a $4.1-million gift from the Long Island Power Authority.

Five years later, FALA is gone, its three buildings in Melville largely shuttered and up for lease. Most of the benefit of the cheaper power, compliments of LIPA, went to Minnesota-based firm IWCO, which bought FALA in 2005. Last month, IWCO said it was closing its Melville facilities as part of a “postal optimization” strategy, dismissing more than 200 workers.

LIPA spokesman Ed Dumas said the building owners, including the Jurick family, who founded FALA, declined to sign an agreement with LIPA allowing electricity from the array to flow back to the grid. “It’s in lockout mode,” he said. LIPA had a five-year contract that has expired. The authority said it got everything it contracted for, including lots of solar-energy data.

But LIPA watchdogs question why the authority didn’t bargain some form of reimbursement should the company be bought by an out-of-state entity, or shuttered. “To give such a sweetheart deal without requiring a claw-back promise is mind-boggling,” said state Assemb. Marc Alessi (D-Manor Park).

LIPA for nearly a decade has offered a rebate program to help customers pay for solar panels, but the FALA project, now ranked as the world’s 21st largest solar array, far exceeds any other rebate, and most R&D projects.

The $4.1 million LIPA provided to finance the FALA project amounts to around 7 percent of LIPA’s total R&D expenditures over the past 10 years. Former LIPA chairman Richard Kessel, who led the authority at the time, declined to comment, and former FALA chief executive Jeffrey Jurick couldn’t be reached.

Then-Gov. George Pataki announced the FALA project on Earth Day in 2001. FALA gave $2,500 to Pataki’s campaign between 2001 and 2002.

According to LIPA’s analysis of the project, FALA had difficulty finding a lender to pay its $2-million share of the project cost, but eventually found a lender by allowing the manufacturer to repossess the panels in the event of default.

A spokeswoman for IWCO, which LIPA said saw an average annual bill reduction of more than $140,000 because of the panels, had no comment because, she said, IWCO didn’t purchase the FALA buildings.

The current leasing agent for FALA’s primary facility in Melville said the buildings are still owned by the Jurick family. Douglas Omstrom, a partner in Corporate National Reality, said the solar system’s ability to reduce a tenant’s electric bill by up to 25 percent is a selling point.

LIPA’S TRIALS & ERRORS

PLUG-IN BUS.

In 2006, LIPA bought and had retrofitted a plug-in hybrid-electric bus. Costs climbed after a partner couldn’t fund its share. Cost: $606,833

FUEL CELLS.

LIPA bought and installed 168 “green energy” units from politically connected Plug Power. The units suffered from short life spans and high maintenance, and ultimately didn’t last.

Cost: $21 million

LANDFILL-GAS POWER GENERATION.

LIPA bought five microturbines, three gas compressors and a heat exchanger planning to generate power using methane gas from a landfill. Huntington Town later rejected the proposal and LIPA mothballed the equipment. Cost: $214,383

HYBRID SOLAR LIGHT.

System designed to provide interior light through use of a solar-light collector and fiber optics. Installed in Staples in Oceanside, it failed to work for two years before a recent fix. Cost: $37,382

OFFSHORE WIND MEASUREMENT.

LIPA joined with federal and state agencies to conduct wind measurement tests but the project was beset by “acoustical noise, and bird and instrument failures.”

Cost: $280,000

FARM-BASED WINDMILLS.

After buying equipment, LIPA found only a single farm to host a turbine, relegating two others to its Shoreham property. The turbine maker went bankrupt.

Cost: $1.6 million

OZONE LAUNDERING.

Consulting firm hired to test system that uses electricity to generate ozone to launder hospital linens in place of chemicals; equipment and data collection problems have stalled the project. Cost: $73,907.

HYBRID CARS.

Between 1999 and 2007 LIPA leased and bought 12 hybrid and electric cars, providing them to LIPA and KeySpan staff, municipalities and GEICO to drive.

Cost: $503,094.

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Copyright (c) 2008, Newsday, Melville, N.Y.

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