While the New York Power Authority (NYPA) respects state lawmakers’ concerns with the Indian Point contingency plan put forth by NYPA and Consolidated Edison Company of New York, it is too early to know ratepayer costs and impacts associated with the plan, a NYPA spokesperson told TransmissionHub on March 28.
“[P]rojects have yet to be reviewed and selected via a public regulatory proceeding by the New York Public Service Commission [(PSC)], which ultimately will determine the project cost and cost allocation matters,” the spokesperson said.
In the state Energy Highway Blueprint, the New York Energy Highway Task Force recommended the state Department of Public Service implement proactive reliability contingency planning to ensure a safe and reliable supply of electricity in cases when potential retirement of power plants, like the Indian Point Energy Center, raises major risks and uncertainties for ratepayers.
“The potential unavailability of Indian Point’s significant generation, as early as summer 2016, is a unique circumstance that obliges New York to plan well in advance with a contingency plan for the loss of Indian Point,” the spokesperson added.
Various state legislators, including Sens. Kevin Parker and Timothy Kennedy, have submitted letters to the PSC about the plan.
“Con Edison’s share of that expense will amount to approximately $320m (as currently projected, exclusive of cost overruns),” Parker said in a March 15 letter.
State Sen. Timothy Kennedy, in a March 19 letter, urged the PSC to consider the cost implications to upstate ratepayers associated with the development and implementation of the contingency plan, which he said will amount to an $811m rate increase.
“While proposed rate increases typically only impact customers of the respective utility, the plan proposed by Con Edison and the New York Power Authority would impose the costs of the projects selected by the PSC on all state ratepayers,” he said, adding that the plan will burden upstate New York ratepayers with the costs of subsidizing projects that will solely benefit downstate customers.
Con Edison is a subsidiary of Consolidated Edison (NYSE:ED).
Criticisms are ‘premature’
A source close to the matter told TransmissionHub on March 28 that the PSC is going to review all of the solutions and come up with “what, hopefully, will address the potential retirement of Indian Point and how those costs would be allocated.”
The source added, “The plans are just coming together, so those who are here criticizing it and saying it’s too expensive are, really, very premature in the process.”
Another source familiar with the issue told TransmissionHub on March 28 that if Entergy (NYSE:ETR) were to close Indian Point in 2016, there would be an estimated shortfall of 1,450 MW. “[T]hat’s the minimum amount you would need to put back in the system to make sure you have reliable and adequate electric supply,” the source said.
The contingency plan involves a three-pronged approach, including for Con Edison and NYPA to build three transmission projects on existing rights-of-way that would partially meet the need caused by the shortfall by enabling the transfer of about 750 MW of additional energy. It is estimated that it would cost $500m to build the three transmission projects.
The companies have asked the PSC to take certain steps before finalizing the projects, including for the PSC to approve about $10m in predevelopment dollars to ensure the projects can be in place by 2016.
The other approaches are for Con Edison to develop an energy efficiency, demand response and combined heat and power program, and for NYPA to issue a request for proposals (RFP) to solicit, from private developers, generation and transmission solutions.
Ultimately, the state Department of Public Service staff would be responsible for evaluating all of the projects, the source added.
They would review the transmission solutions that Con Edison and NYPA proposed, Con Edison’s energy efficiency program, and the responses to NYPA’s RFP, which may be issued the week of April 1, and “determine what set of solutions really makes sense for this planning purpose and they would ultimately make a recommendation to the commission in September,” the source said.
On cost allocation, the source noted that there is no insight yet on whether the PSC “will decide to allocate costs downstate or upstate, or some combination of both.”