New York Power Authority (NYPA) President and CEO Gil Quiniones remains bullish on the state’s energy future, as efforts are underway to address such challenges as transmission bottlenecks.
In remarks delivered on May 10 at the ISO New England and New York ISO symposium, “Navigating Change,” in Boston, he noted that NYPA continues to play a key role in various energy initiatives in the state, particularly the New York Energy Highway, which Gov. Andrew Cuomo introduced in his 2012 State of the State Address.
“We’re very excited about this program, which calls for an unprecedented partnership between the public and private sectors to invest about $5.7bn over the next five to 10 years to upgrade our power infrastructure while protecting the environment, strengthening our economy and creating jobs,” Quiniones said.
On April 30, the New York Energy Highway Task Force said all of the actions called for in the New York Energy Highway Blueprint to modernize the state’s energy infrastructure are moving forward on or ahead of schedule.
Overall, Quiniones said, NYPA expects to develop up to 3,200 MW of additional generation and transmission capacity, with nearly a third of it renewable or repowered generation.
“We’re acting aggressively to make sure we’re ready to maintain or improve reliability of service as large power plants retire,” he said.
NYPA is accelerating investment in its existing electricity and natural gas systems to enhance their reliability, safety and ability to withstand and recover from storms and other extreme weather events. Also, it is investing in smart grid technologies.
Quiniones added that while the state has enough electricity to meet the needs of its residents and businesses, and forecasts indicate that will be the case for years to come, it is clear that the state’s power system faces significant issues, which the Energy Highway aims to address.
“First, the system is getting old,” he said. “Nearly 85% of our high-voltage transmission system has been in service for more than 30 years. More than 50% of our existing generating capacity is of similar vintage.”
The state must also resolve a longstanding problem of congestion at critical points on its transmission system, which often means that excess lower-cost or cleaner power available from upstate – including power from current or proposed wind projects – can not reach New York City and other downstate areas where demand is greatest.
Various older coal- and oil-fueled plants have been retired or are facing retirement due to pending or potential federal environmental regulations, low natural gas prices or other factors. During the past year, Quiniones added, the owners of 23 generating facilities, representing nearly 1,700 MW of capacity, have either retired them or provided notice of intent to do so this year.
“[W]e know that we must upgrade and modernize the power system if we are to meet the needs of a growing economy and ensure the health and well-being of our citizens,” he said.
Quiniones also noted that a request for information from the Energy Highway Task Force elicited 130 responses from 85 potential project developers, utilities, members of the financial community and others.
To address the transmission bottlenecks between upstate and downstate, the state Public Service Commission (PSC) called for proposals to build new alternating current lines in the most heavily congested pathways. Six entities – a group of utility transmission owners and five developers – submitted 16 proposals.
The PSC recently said it would conduct a combined certification proceeding for those projects. “We hope that construction of approved facilities can begin next year, with completion in phases from 2015 to 2018,” he added.
Also progressing is the Blueprint proposal to develop contingency plans to ensure the continuation of reliable service in the event of a major power plant’s retirement, with the first of those involving the Indian Point Energy Center.
The federal licenses for Indian Point’s two units are up for renewal this year and in 2015, he said.
“We believe the contingency plan is a prudent and essential insurance policy that will give us the best and most economical combination of replacement power sources if needed,” Quiniones said. “On the other hand, for the state to do nothing at this point would be to abdicate its responsibilities.”
The completed Indian Point plan by NYPA and Consolidated Edison’s (NYSE:ED) Consolidated Edison Company of New York (Con Edison), which the PSC has approved, calls for new or upgraded generation and transmission, as well as energy efficiency and peak demand reduction measures and on-site generation projects.
As one part of the effort, Con Edison, NYPA and New York State Electric and Gas (NYSEG) are preparing to potentially carry out three transmission upgrades.
NYSEG is a subsidiary of Iberdrola USA, which is a subsidiary of Iberdrola S.A.
NYPA has also issued a request for proposals (RFP), with responses due by May 20, seeking 1,350 MW of other transmission projects and new generation.
Quiniones further noted that there has been progress on the Blueprint’s calls for accelerated investment in the existing electric and gas systems. NYPA has launched a $726m Life Extension and Modernization program for its statewide transmission system, to be completed in phases through 2025.
Statewide, the Blueprint called for a total investment of $1.3bn through 2017 to strengthen electric and gas infrastructure.
Among other things, Quiniones also said the New York State Energy Research and Development Authority has issued an RFP that provides $250m for development of renewable projects and has funded five new projects under the state’s existing smart grid program.