The New York State Public Service Commission on Nov. 4 approved a set of mostly transmission upgrades and energy efficiency projects to address the possible retirement of 2,040 MW of capacity at Entergy’s (NYSE: ETR) Indian Point nuclear plant.
The commission opened a proceeding in November 2012 to look at ways to mitigate the shutdown of two Indian Point units if they fail to win extended licenses from the Nuclear Regulatory Commission. Entergy has said there is every likelihood that the licenses will be extended and that commission initiative is largely a waste of money.
The commission sought a reliability contingency plan addressing those potential reliability needs. A November 2012 order directed Consolidated Edison Co. of New York (Con Edison), as the transmission owner most directly affected by the possible closure of the Indian Point Energy Center (IPEC), to develop such a plan in consultation with the New York Power Authority (NYPA), Department of Public Service Staff and other appropriate agencies.
In response, Con Edison and NYPA jointly submitted a filing on Feb. 1 called the “Con Edison/NYPA February Filing. It proposed a Reliability Contingency Plan whereby Con Edison, New York State Electric and Gas (NYSEG), and NYPA would pursue the initial development of three Transmission Owner Transmission Solution (TOTS) projects, while concurrently soliciting generation and transmission proposals (other than the TOTS projects) through a Request for Proposals (RFP) that was later issued by NYPA.
The Con Edison/NYPA February Filing further described an Energy Efficiency (EE)/Demand Reduction (DR) program to obtain 100 MW of peak demand reduction. Combined heat and power (CHP) projects also figured into the mix
Approved projects designed to be available by mid 2016
The TOTS upgrades, the 100 MW from EE and DR programs, and any projects accepted through the RFP process, were proposed as a portfolio to address a potential reliability need of approximately 1,450 MW that could arise in the 2016 summer period. Specifically, a June 1, 2016 reliability need date, when peak summer conditions could be expected to arise, was identified as an in-service date for projects that was consistent with the analysis performed as part of the 2012 Reliability Needs Assessment (RNA) conducted by the New York Independent System Operator (NYISO).
“In this Order, we address, in part, the third and final requested action item in the Con Edison/NYPA February Filing by accepting a portfolio for inclusion in the IPEC Reliability Contingency Plan consisting of: 1) the three TOTS projects; and 2) the development of approximately 125 MW of EE/DR/CHP resources through the 125 MW Revised EE/DR/CHP Program,” said the Nov. 4 order. “This portfolio, along with 60 MW from on-going EE, DR, and CHP activities, makes a total contribution of 185 MW from EE, DR, and CHP programs towards the potential reliability need for 1,450 MW in June 2016. We anticipate that the TOTS will contribute at least an additional 600 MW towards that need.”
For the time being, the commission agrees with DPS Staff’s recommendation to defer the choice of which, if any, of the proposals responding to the NYPA RFP should be included in the IPEC Reliability Contingency Plan portfolio.
“We leave this issue open in light of the uncertainties presently affecting the wholesale generation markets,” the commission explained. “First, in the coming months, it is possible that the NYISO will establish a new Installed Capacity (ICAP) Zone in the Lower Hudson Valley to meet Locational Capacity Requirements. Second, the NYISO is developing new ‘Demand Curves’ for use in setting ICAP prices in the NYISO-administered markets. Both of these actions are very likely to increase ICAP prices that generators can expect to receive in the Lower Hudson Valley. At the same time, there are several merchant generating units, with a combined capacity of approximately 1,500 MW, which could serve this market, but have either been mothballed and are waiting to return to service if economic conditions improve, or have been subject to a forced outage or have been derated and require repair. With the potential to participate in a higher revenue stream, some of the owners of these units could decide in the near future to bring their units back into service. If so, these units would contribute to meeting the reliability needs, thus reducing the amount of resources necessary to include in the IPEC Reliability Contingency Plan portfolio.”
The three proposed TOTS projects are: a Con Edison plan to develop a second Ramapo to Rock Tavern transmission line , and a Staten Island Unbottling project; and the Marcy South Series Compensation and Fraser to Coopers Corners Reconductoring project, which would be developed by NYPA and NYSEG.
According to the Con Edison/NYPA February filing, as updated on May 20, two of the TOTS projects (the Ramapo/Rock Tavern line and the Marcy/Fraser project) would increase the import capability into Southeastern New York by reducing the constraint on the Upstate New York/Southeast New York interface. This means that underutilized upstate capacity would be able to provide more energy to the downstate area and also provide a reliability benefit. The Staten Island unbottling project is designed to make generation on Staten Island, which is currently bottled, available to the grid and deliverable to Con Edison’s Gowanus and Farragut transmission substations.