Con Ed, NYPA suggest power bids as Indian Point alternative

Consolidated Edison and the New York Power Authority on Feb. 1 filed a plan with the New York State Public Service Commission that outlines a series of steps that would need to be taken in case the Indian Point nuclear plant, with over 2,000 MW of capacity, has to be shut.

In a Nov. 30, 2012, order, the commission directed Con Edison with the assistance of NYPA to “develop a contingency plan for the potential closure of Indian Point upon the expiration of its existing licenses by the end of 2015.”

The plan those parties filed with the PSC analyzed the impact that the retirement of the Indian Point Energy Center (IPEC) would have on the Bulk Power System (BPS), taking into account the effect of the retirement of the coal- and oil-fired Dynegy Danskammer LLC Units 1-6 and the implementation of incremental energy efficiency (EE) and demand response (DR) programs. The plan provides for a fast track approach to having EE and DR program resources and transmission and generation projects in service by a June 2016 deadline to meet the electricity needs that could arise from the closure of IPEC.

“Specifically, the Plan provides for a two pronged approach,” said the Feb. 1 filing. “The first prong has Con Edison and NYPA5 moving forward this spring upon Commission approval to implement three Transmission Owner Transmission Solutions (‘TOTS’) so that they can be in place by the In-Service Deadline. The second prong has NYPA issuing a request for proposals (‘RFP’) in the spring to solicit new incremental generation and transmission proposals that could also be in place by In-Service Deadline. Department of Public Service (‘DPS’) staff will evaluate all of the proposed projects and will then recommend to the Commission which projects should move forward to completion. DPS staff may call upon the New York Independent System Operator (‘NYISO’), Con Edison and NYPA for technical assistance in analyzing any data needed for DPS staff’s evaluation. The recommended projects could include the TOTS and/or solutions resulting from the RFP. Upon Commission approval, the projects ultimately selected will move forward towards completion unless halted by a Commission order, subject to cost recovery and other criteria as described herein.”

The plan consists of several integrated components, all of which need to be timely approved so that they can move forward according to the suggested schedule. To make this plan work, however, there are actions that the commission needs to take to ensure that solutions are in place by the June 2016 in-service deadline, said the filing. If the commission does not issue an order in April 2013, as requested, authorizing Con Edison and NYPA to move forward with the TOTS subject to cost recovery and the halting mechanism, the likelihood of having sufficient resources available by the in-service deadline is greatly diminished. Moreover, completing all of these steps in the order proposed is a fundamental requirement without which each of the subsequent steps would be in jeopardy of being unable to proceed as proposed. Specifically, the plan calls for the commission to:

  • Issue an order in March 2013 that requests that NYPA issue an RFP for new generation and transmission solutions and identifies any changes the commission desires to the general description of the RFP terms, conditions, process and timeline described in this plan.
  • Issue an order in April 2013 that directs Con Edison to implement its Indian Point EE/DR program as set forth in the plan with cost recovery and subject to halting and directs Con Edison to begin the development of the Second Ramapo-to Rock-Tavern 345-kV line (RRT Line) and the Staten Island Un-bottling (SIU) Project, both of which will ultimately be transferred to and owned by the New York Transmission Co. (NY Transco), subject to the halting mechanism and cost recovery proposal set forth in this plan. The plan backers also want, among other things, the PSC to request that NYPA, and direct that New York State Electric and Gas (NYSEG), begin the development of the Marcy South Series Compensation and Fraser-to-Coopers Corners Reconductoring (MSSC) Project, which also will ultimately be transferred to and owned by the NY Transco, subject to the halting mechanism and cost recovery proposal set forth in this plan.
  • Establish a public comment period in this docket pursuant to the State Administrative Procedure Act (SAPA) to solicit comments on the proposed public policy requirement of developing an Indian Point Contingency Plan;
  • Issue an order in September 2013 that, among other things, selects a final set of transmission and/or generation projects to move forward subject to the halting, cost allocation, and cost recovery mechanisms set forth in this plan; and finds, pursuant to the SAPA public comment process, that developing and implementing an Indian Point Contingency Plan is a state public policy requirement that drives the need for transmission.

Entergy still awaits extended licenses for Indian Point units

IPEC, which is owned by Entergy (NYSE: ETR), consists of Units 2 and 3, each capable of producing about 1,020 MW for a total output of 2,040 MW. Unit 2’s Nuclear Regulatory Commission-issued license expires in September 2013 and Unit 3’s NRC license expires in December 2015. Entergy has submitted a timely request to the NRC to extend its license, which is currently pending before the NRC. Entergy is also facing issues about water permitting related to the plant.

The Nov. 30 PSC order required that the plan address reliability needs that could result for the summer of 2016 so that the state would be ready for the closure of such a large generation facility, whether or not the facility is actually closed at that time. The commission established Feb. 1 as the due date for the plan.

The retirement of Danskammer, an old plant that was on the margin anyway and then was badly damaged late last year during Super Storm Sandy, was announced in January when the plan analysis was nearing completion. Preliminary calculations made close to the filing date show an impact on the order of 400-425 MW for both the NYC Analysis and the Statewide Analysis from the closure of Danskammer.

Dynegy Danskammer filed a Jan. 3 notice with the PSC that it intends to discontinue operation of the Danskammer plant. Following the retirement of the facility, Dynegy will transfer it to a salvage company for dismantling.

On Oct. 29, 2012, Danskammer Units 1-4 were flooded due to high water from Super Storm Sandy and have been in a forced outage status since that time. Units 5 and 6 were not exposed to flood water, but the power transformer for these generators was damaged by the flood. Dynegy said it retained contractors to assess the full extent of the damage and their assessment indicates that the flooding damaged about 90% of the motors and 60% of the switchgear in the facility.

Danskammer Units 1 and 2 are oil-fired “peakers” with a net capacity of 130 MW. The coal-fired Units 3 and 4 have a total net capacity of 370 MW (summer rating). Units 5 and 6 are emergency diesel generators with a net capacity of 5 MW, which are currently not in operation and not connected to the power grid.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.