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)