Lotus Buys Key NY Gas Plant Amidst Climate Lawsuit

GREENWICH, Conn. – January 07, 2026 – Lotus Infrastructure Partners has finalized its acquisition of one of Long Island’s most critical power sources, the Caithness Long Island Energy Center, in a deal that underscores the complex and often contradictory dynamics of the modern energy transition. The 365-megawatt natural gas facility in Suffolk County, which will be renamed the Brookhaven Energy Center, is now a key asset for an investment firm that also holds a significant portfolio of renewable energy projects.

The acquisition secures a plant known for its high efficiency and reliability in a power-hungry region. However, it also comes just as the facility faces a legal challenge from environmental groups, who allege its operations violate New York’s landmark climate law. This positions Lotus at the center of a crucial debate: the role of fossil fuels in maintaining grid stability while states aggressively pursue decarbonization.

A Linchpin of Long Island's Power Grid

Since beginning commercial operations in 2009, the Caithness plant has become an indispensable part of the Long Island Power Authority (LIPA) network. Developed in the wake of the 2003 Northeast blackout to bolster regional energy security, it was the first major baseload power plant built on the island in over three decades. Today, it supplies approximately 10% of all electricity consumed on Long Island and accounts for roughly 20% of the power produced there.

The facility’s combined-cycle technology makes it one of the most efficient natural gas plants in the New York Independent System Operator (NYISO) market. Its developer, Caithness Energy, had previously claimed the plant saves LIPA ratepayers around $40 million annually in fuel costs compared to older, less efficient generators. It also boasts a closed-loop air-cooling system, which drastically reduces water consumption—a stark contrast to the millions of gallons drawn by older coastal plants.

"The facility is well suited to provide reliable, dispatchable generation into the New York power market for decades to come," said Himanshu Saxena, Chairman and CEO of Lotus, in a statement announcing the deal's closure. He emphasized the plant's growing importance as industrial and data-center investments expand in the region, heightening the need for dependable power.

A Strategic Pivot or a Balanced Portfolio?

The acquisition by Lotus Infrastructure Partners, a firm with over $7.6 billion in assets under management and a stated focus on sustainability, highlights a broader strategy seen across the private equity landscape. While Lotus has invested heavily in renewable assets—including its June 2024 acquisition of a utility-scale wind, solar, and battery developer now named Allium Renewable Energy—it continues to see value in thermal power.

This dual-track approach reflects a pragmatic view of the energy transition. As intermittent renewable sources like wind and solar grow, the need for dispatchable power sources that can ramp up quickly to meet demand remains critical for grid stability. The Brookhaven Energy Center, with its efficient natural gas technology, fits that role perfectly.

This isn't Lotus's only play in thermal generation. The firm recently agreed to acquire two other contracted power plants and previously managed a 2.6 GW portfolio of natural gas facilities before selling them in October 2025. This pattern of acquiring, optimizing, and sometimes divesting assets demonstrates a dynamic approach to portfolio management, where thermal plants are treated as essential bridging assets that ensure reliability as the grid evolves. Jeffrey Delgado, a Managing Director at Lotus, stated the firm looks forward to working with the operating team and local community on "operating excellence and expanding on CLI's impressive track record."

Environmental Headwinds and Community Concerns

While Lotus celebrates the acquisition of a top-performing asset, the new Brookhaven Energy Center does not come without significant baggage. In January 2025, a coalition of environmental organizations, including the Sierra Club and the Long Island Progressive Coalition, filed a lawsuit against the New York State Department of Environmental Conservation (DEC) for renewing the plant's five-year air permit.

The lawsuit alleges the DEC failed to comply with New York's Climate Leadership and Community Protection Act (CLCPA), a groundbreaking law mandating sharp emissions reductions and directing investment toward disadvantaged communities. The plaintiffs argue that the permit was approved without any new provisions to cut emissions from the plant, which they identify as one of the largest single sources of greenhouse gases in New York State. According to their filing, the facility emits nearly 1 million tons of CO2 annually.

This legal challenge places the plant's future operations under a microscope. The CLCPA's stringent targets require a significant statewide reduction in emissions, and large fossil fuel generators are an obvious target for regulators and activists. The lawsuit highlights the tension between the state's climate ambitions and its reliance on facilities like the Brookhaven Energy Center for power. For residents in nearby communities such as North Bellport, which is designated as a "disadvantaged community" under the CLCPA, the concerns are more immediate, revolving around air quality and public health.

Lotus has publicly stated that its investment strategy includes "thermal power with paths to decarbonizing," but has not yet detailed specific plans for emissions reductions at the newly acquired facility. How the company navigates this legal and regulatory minefield while fulfilling its promise of reliable power will be a defining challenge of its ownership and a closely watched test case for the future of natural gas in New York. The outcome could set a precedent for how legacy energy assets are managed in an era of accelerating climate action.