New York ISO: Clean Power Plan doesn’t consider New York’s past CO2 cuts

The New York Independent System Operator (NYISO) said Dec. 2 that it’s recently filed comments with the U.S. Environmental Protection Agency (EPA) over the proposed Clean Power Plan points out fundamental problems for the state of New York.

“As proposed, the Clean Power Plan presents potentially serious reliability implications for New York,” the NYISO stated. “A majority of the electric capacity within New York City is dual-fuel oil/gas steam-fired electric generating units. These units are critically important, both due to their location within the transmission constrained New York City area and because they possess dual-fuel capability that provides a needed measure of protection against disruptions in the natural gas supply system.”

In its comments, the NYISO questioned the EPA’s assumption that the output from these important dual-fuel units could be reduced by over 99% while maintaining reliable electric service to New York City.

“Such a reduction cannot be sustained while maintaining reliable electric service to New York City,” said the NYISO. “Congress recognized in the Energy Policy Act of 2005 that the population density of the New York City area, the percentage of the population that lives or works in very tall buildings and relies upon underground transportation, and the critical importance of institutions located there intensify the need to maintain the reliability of New York’s electric system. The EPA should do the same.”

NYISO also took issue with the emission-reduction targets and timelines proposed for New York. “The flaws with the Clean Power Plan that would compromise reliability in New York stem from key assumptions within the Building Blocks that are not technically sound and result in CO2 emissions reduction targets for New York that are unreasonable and unworkable within the timeframes provided. The assumptions upon which the Building Blocks are based must be technically and economically sound for the CO2 emissions-reductions targets derived from them to be reasonable and consistent with the requirements of a reliable electric system. No amount of flexibility afforded in the manner in which New York State may seek to comply with the Clean Power Plan can make up for requirements that are inherently unreasonable because they are based on flawed assumptions in the Building Blocks.”

New York’s successful track record of reducing power plant emissions and its future commitments under the Regional Greenhouse Gas Initiative (RGGI) should also be recognized by the EPA, said NYISO. “New York has already reduced CO2 emissions from its power sector by 41.6 percent below 2005 levels and generates approximately 53 percent of the electricity it uses on an annual basis from non-emitting resources. The state’s generation fleet is the ninth cleanest in the country, and New York’s commitment to the Regional Greenhouse Gas Initiative calls for even further CO2 reductions between now and 2020. New Yorkers currently pay the highest electric rates in the contiguous United States, including fees that are used to fund investments in clean energy and conservation that have contributed to New York’s already low-carbon emissions profile. The targets developed for New York under the Clean Power Plan for further CO2 emissions reductions should recognize and appropriately reflect the significant efforts that have already been made in New York and the progress that has been achieved.”

The NYISO proposed several specific revisions to the plan and encouraged the EPA to revisit the Building Blocks and the targets set for New York. The NYISO recommended the following adjustments to the Building Blocks to produce a target that accurately reflects how power is generated, transmitted, and used in New York:

  • Eliminate the heat rate improvements assumed in Building Block 1 for states like New York in which the capacity factors of the few remaining coal-fired units are very low.
  • Adjust Building Block 2 requirements to avoid over-reliance on increased natural gas dispatch that would impair reliability and have an illogical, counter-productive impact on CO2 emissions.
  • Adopt the EPA’s alternative approach to Building Block 3 or recalculate renewable energy requirements in Building Block 3 to provide credit for existing hydropower, consistent with New York’s renewable portfolio standard (RPS) policy.
  • Remove the incorporation of “at risk” nuclear generation under Building Block 3 in the calculation of state CO2 emissions targets.
  • Revise the rate of incremental energy efficiency that is possible by 2030 in Building Block 4 to reflect the success and maturity of New York’s energy efficiency efforts.

EPA plan doesn’t take into account coal’s niche role in New York

Said the NYISO comments on coal: “New York’s few remaining coal-fired units effectively act as peaking units that are needed to meet peak demand during relatively few hours of the year. As explained below, the likely result of Building Blocks 1 and 2, as applied to New York, would be that these coal-fired EGUs would simply cease operating. This would have a significant adverse impact on reliability. The EPA should not assume improved heat rates from coal units with very low capacity factors like those in New York. During what remains of their operating lives, these units will continue to be vitally important resources. Under Building Block 1, the EPA assumes that New York’s coal-fired EGUs can improve (lower) their heat rates by 6% – a rate deemed by the EPA to be feasible nationwide.

“New York’s market structure, as well as the requirements of RGGI, already provide strong incentives for existing EGUs to improve operations and lower their heat rates in order to increase their profitability. Accordingly, New York generators have already made significant improvements in their heat rates. Were further heat rate improvements reasonably attainable, generators would have made them. Market forces are already driving down the utilization of coal-fired EGUs, which are a diminishing portion of the generation mix in New York. In 2005 they produced 21,184 GWh, or 14% of the total output of the New York fleet. In 2013, this had shrunk to just 4,494 GWh or 3% of total output. There are six coal-fired EGUs still operating in New York. Three of these are operating under Reliability Support Service Agreements, as their continued operation has been determined to be necessary to address local reliability issues. These arrangements are necessary because, even though their operation is critical, they are not cost-effective to operate without a special compensation agreement to keep them available. Plans are in place to retire one of thes eunits, and the New York Public Service Commission is considering options to address the reliability issues related to the other two of these coal-fired units. As New York’s coal-fired units have run less in recent years, their heat rates have predictably increased.”

On the issue of the increased use of natural gas combined cycle (NGCC) plants contemplated by EPA, NYISO wrote: “The EPA assumes a redispatch of New York’s NGCC EGUs to a nameplate capacity factor of 70% in order to offset a significant amount of generation from coal, oil, and oil/gas fired steam EGUs. This illogical approach fails to account for important considerations relevant to New York. First, the assumed redispatch would reduce the output of the impacted steam facilities by over 99%, likely forcing the retirement of units that are critical to reliability. Second, given the location of NGCC units within New York, the extent of the redispatch assumed would require not using available generation from non-emitting resources to “make room” for the NGCC output, undermining the intended impact on overall CO2 emissions.

“The EPA’s assumed increase in the capacity factor for New York’s NGCC EGUs would require a dramatic, highly-uneconomic redispatch that would compromise reliability and would actually require backing down lower emitting generation resources. Most of New York’s NGCC EGUs are located in the western part of the state along with the bulk of the state’s hydropower and nuclear generation. Operating the NGCC EGUs at the levels assumed by the EPA would produce more electricity than the combined total of the demand in that portion of the state and the transmission transfer capacity to the areas of greater demand to the southeast. It is not possible to run NGCC resources at the levels assumed by the EPA without reducing the use of generation from non-emitting wind, hydropower, and nuclear units that are also located in the western portion of the state. It would be illogical and counterproductive to pursue such a redispatch, as it has the perverse effect of substituting NGCC generation for non-emitting renewable generation in the name of reducing CO2 emissions.”

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.