New York commission orders RFP to be issued as Indian Point backup

The New York State Public Service Commission on March 15 ordered Consolidated Edison of New York and the New York Power Authority to issue a request for proposals (RFP) for power supply to replace what might be lost to the grid if the Indian Point Energy Center nuclear plant fails to win Nuclear Regulatory Commission license extensions.

Back in November 2012, the commission initiated a formal review process to look at the contingency planning needed if Indian Point, a 2,040-MW, two-unit plant, couldn’t win NRC license extensions for each unit.

“The potential retirement of IPEC raises significant reliability issues that could threaten the public health, safety, and welfare,” the commission noted in the March 15 order. “Consequently, we have required Con Edison, with NYPA’s assistance, to undertake sufficient planning to ensure the maintenance of safe and adequate service. The prompt issuance of an RFP, as proposed in the Filing, is a reasonable initial step in planning what resources could be available to meet the potential reliability need date of summer 2016. We expect to address the other aspects of the Filing in the near future.”

The commission made suggested modifications to a draft RFP that has been submitted by Con Edison and NYPA and told the parties that a revised RFP should be provided to DPS Staff for its review and comment in advance of its issuance. Responses to the RFP need to be filed with the commission at the same time they are submitted to the New York Power Authority.

On Feb. 1, Con Edison and NYPA had jointly submitted a filing that suggested an IPEC Contingency Plan whereby Con Edison and NYPA would pursue the initial development of three Transmission Owner Transmission Solutions (TOTS), while also soliciting generation and other transmission proposals through a RFP to be issued by NYPA. The filing further described an Energy Efficiency/Demand Reduction/Combined Heat and Power (EE/DR/CHP) set-aside program through which at least 100 MW of the anticipated need would be met through EE/DR/CHP projects.

The Feb. 1 plan analyzed the impact that the retirement of the Indian Point Energy Center would have on the Bulk Power System (BPS), taking into account the effect of the recent retirement of the coal- and oil-fired Dynegy Danskammer LLC Units 1-6 and the implementation of incremental energy efficiency and demand response programs. 

The Feb. 1 filing requested specific actions by the commission, including:

  • an order in March 2013 requesting NYPA to issue an RFP for new generation and transmission solutions;
  • an order in April 2013 directing the development of an EE/DR/CHP program and certain transmission projects, approving the allocation and cost recovery of prudently incurred costs, and finding, on a preliminary basis, that the proposed TOTS meet public policy requirements; and
  • an order in September 2013 selecting a final set of transmission and/or generation projects, and making further findings in connection with an authorization of cost allocation and cost recovery.

“This Order, which approves the proposal by Con Edison and NYPA to issue an RFP in connection with their IPEC Contingency Plan, is in response to the first of these three requests,” the March 15 decision noted.

Commission, among other things, shortens RFP response timeframe

“While we generally approve the elements that would be incorporated into the RFP, we reject aspects of the review and evaluation process described in the Filing,” the order said about the mandated RFP changes. “We are primarily concerned with proposals to limit or define the roles of DPS Staff and this Commission. We agree with and accept the proposal in the Filing to conduct a threshold analysis of the RFP responses using the review criteria of timeliness, ability to meet the in-service deadline, minimum incremental capacity contribution, connection to NYISO Load Zones G-K, and firm pricing through December 31, 2013. The results of this analysis should be supplied promptly to DPS Staff for its review.”

The order added: “We also expect that NYPA, in its role as process administrator, will screen the timely proposals for completeness and conformance to the RFP requirements. Thereafter, we expect DPS Staff to conduct an independent review of the qualifying RFP responses and the TOTS.  DPS Staff may utilize the evaluation process listed in the Filing, but is not required to do so; we expect Staff will evaluate the RFP proposals and the TOTS in a manner that will assist us in determining what portfolio of resources will meet our reliability objectives at the least cost and with the greatest benefit to ratepayers and to the public interest. For this reason, we reject those aspects of the Filing that purport to define the post-screening evaluation process.”

The commission also found that responses to the RFP should be due within 45 days after issuance of the RFP. While the filing proposed that responses would be due 45 to 60 days after RFP issuance, the tight time-frames for meeting the potential summer 2016 in-service date supports the use of the shorter time frame for responding to the RFP, the commission said.

Entergy Corp.’s (NYSE: ETR) New York subsidiaries filed comments on Feb. 22 with the commission that urged it to require the utilities to submit more information prior to taking any actions that will raise customers’ electric rates. This contingency planning process fails to acknowledge the substantial likelihood that Indian Point will continue to operate, lacks sufficient information for a meaningful review of the proposed projects or other alternatives, and it fails to demonstrate that – with a price tag of at least $800m – it is the most cost-effective solution for New York electric customers, said Mike Twomey, vice president of external affairs for Entergy Wholesale Commodities.

IPEC 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 NRC-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 licenses, which are currently pending before the NRC. Entergy is also facing issues about water permitting related to the plant.

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.