RFP issued for backup power, wires in case Indian Point is shut

The New York Power Authority told the New York State Public Service Commission in an April 4 filing that it has issued the request for proposals (RFP) for possible replacement power if the 2,040-MW Indian Point nuclear plant has to be shut.

The commission on March 15 had ordered the RFP to be issued, after beginning an investigation on Nov. 30, 2012, about whether new energy sources are needed in case the licenses for each of the two Indian Point units can’t be extended. The New York Power Authority (NYPA) on April 3 issued the RFP for a target of 1,350 MW of generation and transmission resources.

“Please take notice that a meeting to provide an overview of the RFP and to answer questions from interested parties has been scheduled for Friday, April 12, 2013, starting at 10:30 AM in the Jaguar Room of NYPA’s offices located at 123 Main Street, White Plains, New York, 10601,” the notice said. Offers under the RFP need to be filed by May 20.

“The purpose of this RFP is to identify generation and transmission proposals that will solve or contribute to solving the reliability contingency identified in the November 30th Order,” said the RFP. “For each Selected Project for generation facilities, if any, NYPA will enter into a long term Power Purchase Agreement (‘PPA’) for the full output of such Project. For each Selected Project for transmission facilities, if any, cost recovery will be achieved through NYISO’s FERC approved tariff or a PSC tariff arrangement.”

A target of 1,350 MW of incremental generation capacity and/or transmission capability is being sought in this RFP. These could include:

Generation Projects

  • Commercial Operation Date (COD) by June 1, 2016;
  • Must be either a new facility or an existing facility that provides incremental generation capacity (i.e., not included in the 2012 Reliability Needs Assessment, as updated in the Compliance Filing);
  • Must be at least 75 MW that qualifies as Unforced Capacity (UCAP) under New York ISO rules;
  • Must be interconnected to NYISO Load Zones G through K3;
  • Must participate in NYISO voltage support service program;
  • UCAP would be secured through a PPA between the selected proposer and NYPA with a term of no more than 15 years;
  • Proposals for renewable and repowered generation will be considered if they meet the requirements of this RFP; and
  • PPA with NYPA covering prices, terms and conditions for the sale of capacity and energy with NYPA recovering all costs through a Tariff Rider.

Transmission Projects

  • COD by June 1, 2016;
  • Must be either an existing or new facility that provides incremental transmission capacity (i.e., not included in the 2012 Reliability Needs Assessment, as updated in the Compliance Filing);
  • Point of interconnection (or withdrawal) must be in NYISO Load Zones G through K.3;
  • Proposer’s legal, financial and operating obligations during the development period and the operating period would be set forth through the interconnection agreement with the applicable transmission owner, the applicable NYISO tariff or PSC tariff arrangement and, to the extent necessary, a commission order;
  • As discussed in the Compliance Filing, selected transmission projects will seek cost recovery through a NYISO and/or PSC tariff. It is anticipated that the PSC will authorize the creation of a tariff for the recovery of costs for selected projects containing transmission to the extent an appropriate NYISO tariff is not available at the time of selection.

PSC approved this backup program, over Entergy protests

The commission on March 15 ordered Consolidated Edison of New York and NYPA to issue the RFP for power supply to replace what might be lost to the grid if the Indian Point Energy Center (IPEC) nuclear plant fails to win Nuclear Regulatory Commission license extensions.

“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.”

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 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.

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.