FERC Required To File Quarter Reports Re Capacity Zones

The Federal Energy Regulatory Commission (FERC), approved a Hudson Valley “Electric Capacity Zone” that went into effect May 1, despite opposition from elected officials, local municipalities and the state’s own utilities regulator,and  the Public Service Commission. Electricity providers in the region said the zone translates to a 6 percent increase on residential bills and a 10 percent increase on industrial bills.

FERC will now have to give quarterly reports on the capacity zone that will include analyses of the effect on ratepayers. The new requirement was baked into the “cromnibus” $1.1 trillion federal spending bill that controversially passed through both houses of Congress last week.

Senator Charles Schumer, announced the new provisions in a news release stating he believes FERC cannot make unilateral decisions that result in unwarranted rate hikes for ratepayers.

The pushback against the zone has been led in the House by Rep. Chris Gibson, a Columbia County Republican, and Rep. Sean Patrick Maloney, a Putnam County Democrat, both of whom have sought to have the zone repealed altogether.

Three state utilities are looking to eliminate the zone and reimburse customers for higher rates, but a federal appeals court has yet to make a decision.

The capacity zone was first proposed in 2011 by the New York Independent System Operator, which suggested designating a zone that makes energy produced in the lower part of the state more valuable as part of an effort to spur construction of new facilities in southeastern New York, which consumes a majority of the state’s energy.

Dutchess-based Central Hudson Gas & Electric Corp. and Iberdrola USA subsidiaries New York State Electric & Gas Corp. and Rochester Gas & Electric Corp. said in court filings that the zone cost an additional $80 million in its first five months, most of which was paid by consumers and not the electric companies.

The System Operator, though, said the zone has been successful early on in encouraging investment into infrastructure. It had previously predicted that the state’s electric system would not be able to meet demands by 2019, but it noted this month an improvement in the reliability of the grid.

Newburgh’s Danskammer station was scheduled to close, but after the new zone went into effect the new owner of the facility, Danskammer Energy LLC, announced it would refurbish the building and return it to service. Several other companies are planning to return generating stations to service in the region.

The Hudson Valley capacity zone is one of four in the state. It affects some, but not all, customers of Central Hudson, Consolidated Edison, NYSEG and the Orange and Rockland power company. (Westchester County Business Journal, 12/18/2014)

Governor Cuomo To Ban Fracking

Governor Andrew Cuomo's environmental commissioner, Joe Martens, and acting Health Commissioner, Howard Zucker have recommended a ban on fracking across the state  of New York, citing excessive environmental and health concerns.  Governor Cuomo is deferring to their recommendations in making a final decision.  A ban would end the state's current six-month moratorium on fracking.

The process of fracking involves shooting a mix of pressurized water, sand and chemicals to split rock formations to release natural gas and so-called tight oil.  The widely used, deep-drilling process, combined with horizontal drilling, has resulted in a surge in domestic-energy production.

State and local governments are pushing for bans over the health and environmental concerns, including the potential for earthquakes and the contamination of natural water supplies.

New York sits atop the Marcellus shale formation, which stretches 600 miles along the Appalachian Basin and is rich in natural gas deposits.

The state’s Department of Environmental Conservation will put out a final impact study early next year that will suggest a ban on fracking.  Martens will follow the report with an order prohibiting the process.  (Fox News, 12/18/2014)

Appellate Court Rules Indian Point Exempt from State Coastal Review Program

The State Supreme Court Appellate Division Thursday ruled that Indian Point units 2 and 3 are exempt from coastal consistency review under the state’s Coastal Management Program.

The decision by the five-judge panel reversed an earlier decision by a lower court that had reached the opposite conclusion.

Thursday’s ruling affirms Entergy’s position that it is not required to seek a new Coastal Consistency Certification from the State Department of State in order to obtain license renewal for the two Indian points from the Nuclear Regulatory Commission.

Because Indian Point began operating in the mid-1970s and an environmental impact statement for each unit was prepared prior to the effective date of New York State’s waterfront regulations, coastal consistency certification for units 2 and 3 is automatically grandfathered for the plants’ entire lifetime under state law, the court ruled.

This latest ruling is subject to review by New York’s highest court if discretionary leave to appeal is granted.

Entergy is required to demonstrate that it has satisfactorily resolved Coastal Zone Management Act issues before the NRC may issue a renewed license for Indian Point.  (Mid Hudson News Network, 12-11-2014)

Ginna Nuclear Plant Enters Reliability Support Services Agreement

The New York State Public Service Commission voted unanimously Thursday to give the Ginna Nuclear Power Plant to put Ginna in the position to enter a Reliability Support Services Agreement (RSSA) with RG&E. 

That agreement will require RG&E to purchase energy from the Ginna plant, at a time when natural gas is a far cheaper energy source compared to nuclear. Without such a deal, Exelon Energy, the owner of the plant, had acknowledged in the past that it may have to shut Ginna down. 

The Center agrees with this decision.

Ginna first went on-line in 1969, making it one of the country's oldest nuclear plants. (WHAM-ABC-13, 12,6,2014)

Proposal To Enlarge Gas Pipeline Across Indian Point

The Federal Energy Regulatory Commission FERC) has put out for public comment a draft environmental impact statement concerning a proposed pipeline expansion project in the Northeast. The expansion includes property belonging to the Indian Point Nuclear power plant.

The draft environmental impact statement, or EIS, is for the Algonquin Incremental Market Project, or AIM Project. Algonquin Gas Transmission wants to expand its existing pipeline system from an interconnection at Ramapo, in Rockland County, to deliver additional natural gas transportation service to the Connecticut, Rhode Island, and Massachusetts markets. The draft EIS addresses the potential environmental impacts of the construction and operation of nearly 38 miles of pipeline.

Houston-based Spectra Energy, which operates the 1,127 mile pipeline that goes from Lambertville, New Jersey to Boston. The expansion is for a portion of this pipeline and Hanley says the pipeline will be built in existing rights of way.

Spectra will use the same trench lifting the 26-inch pipeline and replacing that 26-inch pipeline with a 42-inch-diamer pipeline. Spectra is seeking to expand its existing infrastructure to meet the region’s needs.  Construction would begin in spring of 2015 if all regulatory permits are in place. Part of the expansion includes a portion of the property of the Buchanan-based Indian Point nuclear power plant.

The Nuclear Regulatory Commission's (NRC) primary interest has to do with whether this could impact the safe operation of the plant.  The NRC will provide comments to FERC. Entergy is taking no position on the project, but has analyzed any potential impact to safety.  Entery is required by regulation to analyze potential external impacts to safety of the plant.   Entergy's engineers have analyzed the pipeline. They worked with Spectra to understand different aspects of how it was going to be constructed, where it was going to be sited, the depth of the pipeline and determined that there’s no risk to the plant from the pipeline being sited where it’s proposed.

The pipeline replacement is for an area of Indian Point that is considered owner-controlled property, not near the reactors or vital plant structures.
“Indian Point sits on about 240 acres of land and what’s called the owner-controlled area is the outermost ring of the plant.

The public comment period ends September 29. There will be four public comment meetings September 8-11 – one in Massachusetts; two in Connecticut, in Norwich and Danbury; and one in New York, in Cortlandt Manor in Westchester County. The New York public meeting is September 11. (WNPRNews, 8/29/2014)

NYISO Rolls Back Proposal for Electric Capacity Zone Rates

The New York Independent System Operation (NYISO) will revise its proposal for an electric capacity zone in the Hudson Valley to reduce the proposed rate increase.  The announcement came after US Senator Charles Schumer pushed to have the zone plan dropped.

Under the new proposal submitted to the Federal Energy Regulatory Commission, the rate increase would be cut from 10 percent to four percent this year, with no rate increases in the two following years.

A decision by FERC on the new proposal is expected on Thursday. Schumer is urging FERC to reject the zone altogether. (Mid Hudson News, 4/30/2014)

FERC "Capacity Zone" Plan

The Federal Energy Regulatory Commission (FERC) is telling state officials that expected annual growth in electricity demand and the loss of power sources are driving the need to establish a new “capacity zone” between New York City and Albany.

Capacity is the amount of electricity a utility is required to have available under peak conditions — the maximum amount expected — plus an additional 18 percent. A capacity zone quite simply reflects where you have more need than where transmission can give you generation.

Under rules for a new capacity zone, utilities like Central Hudson will be required to purchase at least 88 percent of its “capacity,” or amount above actual demand, from electricity producers within the zone. Officials said that is required as a way to provide incentives for new producers to build plants that meet the growing demand for electricity.

Central Hudson has opposed the capacity zone, which is scheduled to begin in March, arguing that it will increase the costs charged to customers by 8 to 15 percent.
While demand for electricity in the region is increasing at a rate of 200 megawatts per year, the amount of electricity generated has declined by 1,700 megawatts.  It is because the 1,700 megawatts was retired in part because generators weren’t making enough new capacity the month before to justify the upgrades to their systems.

There is a growing requirement in this area that the current system can’t fix and if an answer is not found, there will be blackouts.  The reduction in electricity generated is a result of regulators rejecting requests for upgrades based on profit margins that have been reduced due to environmental regulations. If you’re a plant owner, you have to make money enough to run that plant ... and (coal-based plants) have not been able to survive because of the environmental requirements on (them). Because of the cost of natural gas as compared to the cost of coal they just simply can’t compete, so coal has been retired across the state and you’ve had some of that in this area retire.

The New York Independent System Operator is a nonprofit organization that reports to the state Public Service Commission on the demand for electricity and forecasts where shortages can be expected. Limits on electricity are also based on how much power can be carried through existing transmission lines from other parts of the state, which is why additional lines are being considered for the region.

The majority of the congestion is from Leeds (in Greene County) to Pleasant Valley (in Dutchess County. On peak days, you just simply can’t move any more power through those lines.

There are currently capacity zones for New York City and Long Island, where additional electricity comes from outdated generators that are brought online when demand is high. There has been an impact from people trying to cut back on electric use, but the use of air conditioners and increased heating needs have offset those savings.  Energy efficiency has made us efficient in our daily lives, but the state has also set peak demand records in summer and winter in the last seven months.  (Daily Freeman News, 1/30/2014)

New York Green Bank

On December 19 the state Public Service Commission approved $165.5 million in seed money for Governor Andrew Cuomo's $1 billion Green Bank.  It will be operated by the New York State Energy Research and Development Authority to provide Wall Street-style financing sources for renewable energy projects in the state.

Cuomo proposed the Green Bank as a way to bring more private sector capital into New York's renewable energy economy, which relies heavily on subsidies from NYSERDA for everything from wind farms and solar electric installations to home energy audits. Using some public funds, the Green Bank also will tap money from banks and other private sources to create traditional financing products such as bonds and loans that developers can tap into instead of seeking one-time state subsidies.

NYSERDA collects roughly $700 million from electric and gas utility customers annually to fund its renewable energy subsidies, although large industrial users pay much of the expense.

The PSC approved taking $165.5 million in uncommitted funds from various NYSERDA programs to start the Green Bank. About $17 million will be used for administrative costs and program evaluation. Another $45 million is coming from the Regional Greenhouse Gas Initiative, a cap-and-trade emissions program for power plants that New York is a part of.

NYSERDA will hire new staff to run the Green Bank. In November, Cuomo announced the hiring of Alfred Griffin of Citigroup Global Markets as president.  (Times Union, 1/2/2014)

Boundless Energy Wants Lines Under Hudson River

Boundless Energy's proposed project would run primarily
 along the west shore of the Hudson, from Greene County
to the Roseton plant, shown here, in the Town of Newburgh.
From Roseton, an underground line would extend
to an East Fishkill substation.Times Herald-Record file photo

Connecticut-based Boundless Energy  is proposing to fix the energy bottleneck preventing power from coming to the Hudson Valley by upgrading existing transmission lines and burying a new one as deep as 40 feet under the Hudson River from the Town of Newburgh to Dutchess County. According to Boundless Energy, the entire project would cost less than $300 million.

 

The project is one of four vying to be part of New York state's Energy Highway Initiative. The other three projects seek to fix the same bottleneck, but would have more limited effects on the region because they would connect from areas farther upstate to a substation in Pleasant Valley.  The state Public Service Commission will likely select only one project of the four.

 

Community groups have opposed some of those projects because they include the installation of new transmission poles and lines. The Dutchess County Legislature last month passed a resolution opposing the construction of new, above-ground transmission lines.

 

Boundless' project sticks primarily to the western shore of the Hudson River, running from Greene County down through Ulster and the very northern tip of Orange to the Roseton power plant in the Town of Newburgh. The engineers behind Boundless tout that their project does not involve the installation of any additional lines or poles. Instead, it would replace older utility cables with new, higher-capacity ones and upgrade technology in substations.  From Roseton, the line would travel under the Hudson River to an East Fishkill substation.

 

The PSC is accepting public comment on the projects until March, and then will begin another round of more specific applications and public comments. That phase will take an additional 18 to 30 months, meaning work on any of the projects may not start until 2016.  The PSC believes the transmission projects will make the designation of a new power zone in the Hudson Valley, which will increase electricity rates by as much as 10 percent, unnecessary. The zone is meant to attract new generation projects. (Times Herald Record, 1/2/2014)