New York Power Grid Prepared for Summer 2015

The New York Independent System Operator (NYISO) reported today that electricity supplies in New York State are expected to be adequate to meet forecasted demand this summer. New York has sufficient statewide generating capacity and other power resources to serve forecasted levels of demand for electricity.

After several years of declining margins in surplus resources, there has been a rebound in the addition of generation. In particular, power plants are returning to service or upgrading their capacity in the high-demand region of southeastern New York,

The NYISO forecasts that New York’s 2015 summer peak demand will reach 33,567 megawatts (MW). Last year’s moderate summer weather produced a peak of 29,782 MW, the lowest since 2004. The 2014 peak occurred in September, far later in the summer season than usual. This year’s forecasted summer peak is below the all-time peak demand, which was set in 2013 when a weeklong heat wave led to record-breaking power consumption of 33,956 MW on July 19.

Peak demand is a measurement of the average total electric demand by consumers for a one-hour period. One megawatt of electricity can serve approximately 800 to 1,000 homes. Summer heat is responsible for electric power system peaks in New York as air conditioners that increase overall power usage are called upon to counteract rising temperatures. While the electricity system must be prepared to address peak load conditions, average demand is typically far less. The peak forecast is based on normal summer weather conditions, with temperatures in New York City about 95 degrees Fahrenheit (°F). If extreme summer weather produces heat waves of 100°F in New York City and elsewhere, peak demand across the state could increase to approximately 35,900 MW.

The total capacity of power resources available to New York in summer 2015 is expected to be 42,150 MW. The total includes 39,039 MW of generating capacity from New York power plants; 1,124 MW in demand response resources (programs under which consumers reduce usage); and 1,987 MW of import capability that could be used to supply energy from neighboring regions to New York.

A surplus of capacity is available for the state as a whole, but transmission constraints narrow the margins of supply for downstate regions. However, in response to a new capacity zone implemented for the Lower Hudson Valley in 2014, approximately 1,000 megawatts of power resources were returned to service in southeastern New York. The resources include the repowering of the Danskammer Generating Station in Newburgh, New York, and restored capability at the Bowline Generating Facility in Haverstraw, New York.  (NYISO)

Generation AND Transmission

From Joseph Henry's discovery of magnetic induction to Thomas Edison's Pearl Street station and Nicola Tesla's alternating current and George Westinghouse's promise to harness the power of Niagara Falls, New York has a long standing legacy of leadership in the electric industry. The Empire State was home to the first electrical grid and as such, has some of the oldest transmission infrastructure in the country.

Unfortunately, New York is not building enough new generation and the transmission infrastructure has been greatly neglected. More than 80% of New York's high-voltage transmission lines went into service before 1980 and more than 4,700 circuit miles will require replacement within the next 30 years. Upstate New York has a diverse set of generation resources that includes natural gas, nuclear, wind and hydro resources and due to constraints on the existing transmission system, are limited in their ability to satisfy downstate demand.

According to the New York Independent System Operator's 2012 CARIS report, transmission congestion has cost New Yorkers an additional $9.2 billion since 2004. Upgrading New York's aging transmission infrastructure will bolster the reliability of the system, tap upstate's diversified generation resources and allow cheaper, cleaner, more efficient resources to satisfy downstate demand.

Of course NIMBY and professional environmentalist opposition will have to be overcome because they oppose almost all development project proposals.

Within the context of generation and transmission issues, Central Hudson Gas and Electric Corp. was notified Thursday that it lost an appeal in its battle against the Federal Energy Regulatory Commission regarding capacity zones.  The U.S. Court of Appeals for the Second District upheld FERC's capacity zone, which is located in the Hudson Valley swinging down into New York City. The agency regulates the interstate transmission of natural gas, oil and electricity, according to its website.  The changes for Central Hudson customers resulted in a 6-percent increase in residential utility bills and as much as 10 percent for its large industrial customers

New York doesn't have enough capacity, or backup, in its system, FERC argues. If a transmission line goes down there isn't enough energy in the grid to cover it.  More backup is needed, according to FERC, and prices were raised as a result to attract generating plants and create more energy within the system.   (Buffalo News, 3/21/2015)Poughkeepsie Journal, 4/2/2015)

New Yorkers Pay Too Much In Utility Taxes

New York AREA released an issue brief, "The Hidden Taxes in New Yorks' Electric Bills," at an Albany media event with the Business Council of New York State (BCNYS) and the Independent Power Producers of New York. The issue brief details the amount of electricity taxes collected annually by the Empire State and how they harm consumers and small businesses the most.

A big reason is the spate of direct and hidden electricity taxes which account for 25 percent or so of a typical utility bill. Last week, the U.S. Energy Information Administration reported that New York residents pay the third highest average retail price for electricity. At 19.26 cents per kilowatt hour, New York residents pay 58 percent more than the national average.

Few taxes are as regressive as those on electricity usage. Electricity is vital to everyone’s quality of life and living without it is life threatening. Poor New Yorkers on a limited income are most disproportionately impacted by these taxes.

Using data from various government agencies, the New York Affordable Reliable Electricity Alliance very conservatively estimates that New Yorkers pay at least $1.6 billion annually in electricity taxes, or approximately $75 every year for every man, woman, and child in our state. 

At the state level, utilities are taxed on both net income and 2 percent of gross receipts from residential distribution, providing the state with two bites at the tax apple. Reducing energy taxes should start with the repeal of the gross receipts tax (GRT), as this will benefit all New Yorkers. This is the single most direct step state government can take to reduce the cost of energy for New York consumers, as every residential utility customer pays this 2 percent tax. 

The GRT has proven lucrative to the State of New York, and last year was no exception, with the state reporting $162 million [ iv ] in revenue from this tax.  The 18-a surcharge is a prime example of how an electricity tax can quickly get out of control. Its original purpose was to fund the operations of the New York Public Service Commission at a 0.33 percent cost to ratepayers. At the height of the financial crisis, it quintupled to 2 percent on all electricity bills to plug Albany’s budget gaps.

Conclusion and Recommendations

With New Yorkers’ electricity rates and taxes high, particularly because of the frigid and brutal winter, several steps should be taken immediately.

• The Gross Receipts Tax should be cut by at least 50 percent this year and repealed next year.

• The 18-a assessment should be permanently capped at a rate not to exceed 0.33 percent.

• The Public Service Commission should only support new generation and transmission projects that are market competitive and fully disclose the taxpayer subsidies that have financed and are financing various energy projects.

About the Authors: 

Jerry Kremer

Rich Thomas

Arthur “Jerry” Kremer, former chairman of the New York Assembly Ways and Means Committee, is chairman and Richard Thomas is Executive Director of the New York Affordable Reliable Electricity Alliance (New York AREA). Founded in November 2003, New York AREA is a diverse group of more than 150 business, labor, and community groups whose mission and purpose is to ensure an ample and reliable electricity supply and economic prosperity for years to come.

LNG Averts 'Panic Premium' in Winter Prices

New Yorkers pay double the price of natural gas than New England consumers. Reuters reports LNG imports played crucial role in lower prices

By Richard Thomas

A recent Reuters articleoutlines the critical role liquefied natural gas (LNG) imports played in helping New England avert “panic premium” prices similar to what consumers experienced during last year’s polar vortex. The fall in oil prices also provided much needed relief, allowing dual fuel units to switch to oil to keep the grid reliable.

Reuters reported that ISO New England said, “79 oil and dual-fuel units able to burn both gas and oil bought about 4.5 million barrels of oil. In addition, six gas units bought fuel from LNG terminals that bring gas in from overseas as part of the current winter reliability program.”

Thomson Reuters Analytics found that LNG Imports into the Algonquin-hub quadrupled, bringing the price of natural gas down to an average of $17.73 per million British thermal units (MMBtu) from $22.50 MMBtu last February, a 21 percent decrease. The savings are welcome news to ratepayers who are buried in mountains of snow during one of the coldest winters on record.

Ignoring the benefits of LNG would be a major economic and environmental mistake for New York. The natural gas price difference between New York and New England this winter offers a striking contrast. For example, the Boston region has access to LNG, and Long Island/New York City does not. According to the U.S. Energy Information Administration (EIA), the price of natural gas on Transco-6 hub serving New York spiked to $38.15 MMBtu on Wednesday, February 18, 2015, which is double New England’s average of $17.73 MMBtu. (See above EIA images on natural gas prices across regions.) This translates into New Yorkers paying more for a product that is essentially cheaper in a similar region.

Opponents to projects like Port Ambrose, a deep-water natural gas import terminal 18.5 miles off the coast of Long Beach, offer no credible alternative to powering or heating our homes during harsh winter weather. The silent majority of ratepayers cannot afford to continue paying double the price for natural gas because a vocal minority is holding progress hostage. The fact is Port Ambrose will reduce the price of natural gas in downstate New York by tapping into existing pipelines on the seafloor, creating over $300 million in annual savings for consumers, hundreds of jobs for the local economy, and a resilient energy infrastructure.

In terms of the environment, though natural gas is a fossil fuel, it is the cleanest between oil and coal. Given pipeline constraints headed into the northeast, the New York Independent System Operator recently ordered power plants on Long Island and New York City to prepare to switch to oil when electric prices eclipsed $1,000 per megawatt hour on February 19, 2015.

These issues should not be overlooked or underestimated as hundreds of thousands of New Yorkers struggle with respiratory challenges daily. And our modern/mobile lives depend upon the reliable flow of electricity. The bottom line is New York needs to address its energy challenges to benefit all consumers. Moving forward with Port Ambrose is among the right choices for New York’s economy and environment.

To read the Reuters article click here.

To read the US EIA update on northeast demand for and prices of natural gas, click here.

Rich Thomas

Richard Thomas is Executive Director with the New York Affordable Reliable Electricity Alliance. 

Mayor de Blasio Releases 2015 Climate Report

Today, Mayor Bill de Blasio announced the release of the New York City Panel on Climate Change’s 2015 report, Building the Knowledge Base for Climate Resiliency, focused on increasing the current and future resiliency of communities, citywide systems, and infrastructure around New York City and the broader metropolitan region.

The New York City Panel on Climate Change (NPCC) is an independent body that advises the City on climate risks and resiliency. As the best available data, NPCC science informs the City’s comprehensive climate policies, including its multilayered, citywide resiliency plan and sweeping sustainability initiatives—in line with President Obama’s recent Executive Order. The NPCC worked in partnership with the City, including with the Mayor’s Office of Recovery and Resiliency, the Mayor’s Office of Sustainability, the Mayor’s Office of Operations, and the Department of Health and Mental Hygiene.

Today’s NPCC report provides climate projections through 2100 for the first time, for temperature, precipitation, and sea level rise, representing advancement in the science. New topics covered in the report also include public health, with a focus on extreme heat events and coastal storms and enhanced dynamic coastal flood modeling, which incorporate the effects of sea level rise. 

The full report—Building the Knowledge Base for Climate Resiliency: New York City Panel on Climate Change 2015 Report.

The City is announcing today new progress as it implements a comprehensive resiliency plan based on the NPCC’s science, including the kickoff of scoping and preliminary design work on the Lower East Side integrated flood protection system, the launch of the first-ever comprehensive regional analysis of New York City’s food supply chain resiliency, key steps forward to combat the urban heat island effect, and the start of an approximately $100 million shoreline investment program to protect the most vulnerable waterfront communities.

Additionally, Mayor de Blasio will launch NPCC3, which will build on today’s report, and, in particular, look at climate risks through the lens of inequality at a neighborhood scale in a report due early next year. NPCC3 will also focus on ways to enhance coordination of mitigation and resiliency across the entire New York metropolitan region.

In addition to providing climate projections through 2100, NPCC2’s new content today includes:

• New coastal flood risk maps to the end of the century for the current 100-year (1 percent annual chance of occurrence) and 500-year (0.2 percent annual chance of occurrence) coastal flood events.

• Enhanced dynamic flood inundation modeling of future coastal flooding that includes the effects of sea level rise. 

• A review of key issues related to climate change health risks relevant to the citizens of New York City. 

• A process for enhancing a New York City Climate Resiliency Indicators and Monitoring System. 

Key Recommendations and City Action

The City is announcing new progress on a number of key projects, including:

• The launch of scoping and preliminary design work on the Lower East Side to implement a $335 million integrated, neighborhood-sensitive flood protection system to mitigate risk and help connect the community with the waterfront. This project, which is funded by the U.S. Department of Housing and Urban Development’s Rebuild by Design competition, runs from East 23rd Street to Montgomery Street and is intended to be just the first phase of a larger project that will ultimately provide coastal resiliency for all of Lower Manhattan. To that end, the City has already allocated additional funds to advance planning and preliminary design south of Montgomery Street.
• The Office of Recovery and Resiliency (ORR), partnering with the New York City Economic Development Corporation (NYCEDC), has also launched the first-ever, comprehensive regional resiliency analysis of New York City’s food supply chain network. The study will examine key distribution assets both locally and in surrounding jurisdictions, examine regional transportation routes, and work with the city’s food community to help ensure continuity of operations during a disaster.
• To combat the urban heat island effect, as of the end of 2014, NYC Cool Roofs has coated over six million square feet of building roofs with reflective paint to address the climate change risks associated with urban heat. The City’s recent green buildings plan commits to coating at least one million square feet a year more to continue mitigating the urban heat island effect and provide energy savings in affordable housing, public buildings, and non-profit organizations. ORR has also convened urban heat island experts to advance research and understanding on this issue, and continues to focus its heat response protocols on vulnerable populations.
• ORR and NYCEDC have also launched an approximately $100 million shoreline investment program to protect the most vulnerable waterfront communities, including Coney Island Creek and Staten Island’s South Shore, and other low-lying parts of the city that will be evaluated as part of the first phase of work. This will include a nine-month first phase to identify and prioritize approximately 43 miles of at-risk shoreline, following by design and construction of site-specific resiliency measures that might include bulkhead upgrades, revetment installation, and living shoreline treatments.

The City has already implemented short-term measures to immediately reduce risk. For example:

• 4.15 million cubic yards of sand placed on city beaches.
• 26,000 linear feet of dunes on Staten Island alone, with additional dunes on the Rockaway peninsula.
• 10,500 linear feet of bulkhead repairs around the city.
• Updated building and zoning codes, including 16 new local laws to improve residential and commercial resiliency.
• $1 billion in resiliency investments being made by ConEd to harden critical assets like substations and other critical distribution equipment.
• Reforms to FEMA’s national flood insurance program, critical flood insurance affordability studies, and education efforts for homeowners across the city.

Additional longer-term measures are being advanced all across the entire city, including but not limited to:

• Over $450 million to construct new armored levees and other infrastructure along Midland Beach and Staten Island’s East Shore, to substantially reduce risk in the future, in partnership with the U.S. Army Corps of Engineers and the State.
• Substantial investment in the next phase of coastal protection in the Rockaways and the communities surrounding Jamaica Bay, in partnership with the Army Corps and State.
• T-groins and beach nourishment in Sea Gate, on which ground was broken on Saturday, in partnership with the Army Corps and the State.
• Dunes and other coastal protection in Breezy Point.
• Integrated flood protection system measures in Red Hook.
• Over $15 million in natural infrastructure resiliency projects funded by the Department of Interior in Jamaica Bay, the Bronx River, and elsewhere.
• Additional coastal protection projects funded by the federal Rebuild by Design program (in addition to the Lower East Side flood protection system), including:
  • Hunts Point Lifelines—food distribution center investments in coastal protection, waterfront access, and energy resiliency.
  • Living Breakwaters—natural infrastructure investments in wave attenuation off of Staten Island’s South Shore, being implemented by the State.
• Major investments in the Staten Island Bluebelt and other stormwater infrastructure across the city to better accommodate increasing precipitation.
• Key resiliency upgrades at critical facilities, such as hospitals like Staten Island University Hospital, Coney Island Hospital, Bellevue, and more.
• NYCHA recovery and resiliency funds to elevate boilers and install emergency generators and flood protection systems.
• Agency recovery and resiliency funds to restore and protect critical City agency services like schools, parks, and other facilities.
• Major flood and coastal protection studies, including at Coney Island Creek, Gowanus Canal, Southern Manhattan, and Newtown Creek, to evaluate the feasibility of additional tidal barrier and surge barrier investments.
• Department of City Planning Resilient Neighborhoods studies to advance land use measures to support the vitality and resiliency of individual communities in the flood zones.
• Small business resiliency support, including new resiliency technologies to be applied through the NYC: RISE competition and assistance through Business PREP, a new program to provide small businesses with education and technical support to enhance their resiliency.

The City is also taking dramatic steps to reduce its contributions to climate change, including becoming the largest city in the world to commit to an 80 percent reduction in greenhouse gas emissions by 2050. That commitment kicks off with Mayor de Blasio’s sweeping 10-year green buildings plan, One City: Built to Last, to retrofit public and private buildings, while creating green jobs and generating operational savings. (Office of the Mayor of New York)

FERC Issues Final EIS on Algonquin Pipeline Improvements

FERC Staff Issues the Final Environmental Impact Statement on Algonquin Gas Transmission, LLC’s Algonquin Incremental Market Project (Docket No. CP14-96-000)
Issued January 23, 2015

The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a final environmental impact statement (EIS) for the Algonquin Incremental Market Project (Project), proposed by Algonquin Gas Transmission, LLC (Algonquin).

The proposed Project facilities include the construction and operation of about 37.4 miles of pipeline in New York, Connecticut, and Massachusetts, composed of the following facilities:

• replacement of 26.3 miles of existing pipeline with a 16- or 42-inch-diameter pipeline;
• extension of an existing loop¹ pipeline with about 3.3 miles of additional 12- and 36-inch-diameter pipeline within Algonquin's existing right-of-way; and
• installation of about 7.8 miles of new 16-, 24-, and 42-inch-diameter pipeline.

The Project's proposed aboveground facilities consist of modifications to six existing compressor stations, to add a total 81,620 horsepower, in New York, Connecticut, and Rhode Island and abandonment of four existing compressor units for a total of 10,800 horsepower at one compressor station in New York. Algonquin would also modify 24 existing meter and regulating stations, construct 3 new meter and regulation stations, and remove 1 meter station in New York, Connecticut, and Massachusetts. The Project would provide firm transportation service of 342,000 dekatherms per day of natural gas to local distribution companies and municipal utilities in Connecticut, Rhode Island, and Massachusetts.

The EIS was prepared in compliance with the requirements of the National Environmental Policy Act (NEPA), the Council on Environmental Quality regulations for implementing NEPA (40 Code of Federal Regulations [CFR] 1500–1508), and FERC regulations implementing NEPA (18 CFR 380). The U.S. Environmental Protection Agency, U.S. Army Corps of Engineers, and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration cooperated in the preparation of the final EIS.

FERC's environmental staff concludes that construction and operation of the Project would result in some adverse environmental impacts. However, most of these impacts would be reduced to less-than-significant levels with the implementation of Algonquin's proposed mitigation measures and plans and the additional measures recommended by the FERC staff in the draft EIS. Although many factors were considered in this determination, the principal reasons are:

• About 35 miles (93 percent) of the 37.4 miles of Project pipeline facilities would be within or adjacent to existing rights-of-way.
• The majority of the pipeline facilities (70 percent) would replace existing Algonquin pipelines within existing rights-of-way.
• Algonquin would minimize impacts on natural and cultural resources during construction and operation of the Project by implementing its Erosion and Sediment Control Plan; Spill Prevention, Control and Countermeasure Plan; Unexpected Contamination Encounter Procedures; Invasive Plant Species Control Plan; Best Drilling Practices Plan; Compensatory Mitigation Plan; Traffic Management Plans for New York and the West Roxbury Lateral; Procedures Guiding the Discovery of Unanticipated Cultural Resources and Human Remains; and Fugitive Dust Control Plan.
• Algonquin would utilize the horizontal directional drill method to cross the Hudson and Still Rivers, which would avoid any direct impacts on these resources.
• The U.S. Fish and Wildlife Service is in the process of issuing a letter of concurrent for the AIM Project, which would complete consultation under section 7 of the Endangered Species Act.
• FERC staff would complete the process with section 106 of the National Historic Preservation Act and implementing the regulations at 36 CFR 800 prior to allowing any construction to begin.
• FERC staff would ensure compliance with all mitigation measures that become conditions of the FERC authorizations and other approvals during our oversight of an environmental inspection and mitigation monitoring program.

The FERC Commissioners will take into consideration staff's recommendations when the Commission makes a decision on the Project.  (FERC)

• » Final EIS Volume I 
• » Final EIS Volume I Appendix Part I 
• » Final EIS Volume I Appendix Part II 
• » Final EIS Volume II Part I 
• » Final EIS Volume II Part II 
• » Final EIS Volume II Part III 
• » Final EIS Volume II Part IV 
• » Final EIS Volume II Part V 
• » Final EIS Volume II Part VI 
• » Volume II Appendix A 

Center New York Supports Liberty Port Ambrose LNG Project at Hearings

Full Written Statement

Center New York Director testified before the U.S. Coast Guard and the U.S. Maritime Administration in support of the Liberty Port Ambrose Liquefied Natural Gas Project.  The project will import natural gas into the United States and will provide diversity in energy delivery.  This gas is needed in lower New York and Long Island.

One hearing was held at the Hilton New York JFK Airport Hotel in Jamaica, New York. Approximately 150 union members attended the hearing and expressed their support for the project.

Dan Durett at the January 7, 2015 Hearing

Center New York Director Dan Durett also made a statement at the hearing.  Dan provided the Center's local perspective on the project.

Norris McDonald at January 8, 2015 Hearing

Norris McDonald at January 8, 2015 Hearing

The other hearing was held at the Sheraton Eaton Hotel in Eatontown, New Jersey.  Center for Environment, Commerce & Energy President Norris McDonald testified before the U.S. Coast Guard and the U.S. Maritime Administration.  Approximately 100 union members attended the hearing and expressed their support for the project.

Full Written Statement

Norris McDonald at January 7, 2015 Hearing

Port Ambrose is a deepwater port consisting of a submerged buoy system for natural gas deliveries that will be located in federal waters approximately 19 miles from the New York shore.  Each delivery is expected to provide an average of 400 million cubic feet of natural gas per day – enough to meet the energy needs of 1.5 million homes. The majority of these deliveries will occur during the peak demand periods of winter and summer.

Support The Liberty Port Ambrose LNG Project

The Center - New York supports the Liberty Port Ambrose Liquefied Natural Gas Project

Port Ambrose is a deepwater port consisting of a submerged buoy system for natural gas deliveries that will be located in federal waters approximately 19 miles from the New York shore.  Each delivery is expected to provide an average of 400 million cubic feet of natural gas per day – enough to meet the energy needs of 1.5 million homes. The majority of these deliveries will occur during the peak demand periods of winter and summer.

Liquefied Natural Gas (LNG) supplies will arrive at Port Ambrose via specially designed Shuttle & Regasification Vessels (SRVs). Once the SRV is connected to the submerged buoy system, the LNG will be re-gasified on board and natural gas will be transferred into a new twenty-two mile subsea pipeline that will connect offshore into the existing Transco Lower New York Bay Lateral pipeline serving Long Island and New York City

The Liberty Port Ambrose Liquefied Natural Gas Project will import LNG that will be delivered from purpose-built LNG regasification vessels (LNGRVs) or Shuttle & Regasification Vessels (SRVs), vaporized on site and delivered through subsea manifolds and lateral pipelines to a buried main line connecting to the existing Transcontinental Gas Pipe Line Company (Transco) Lower New York Bay Lateral in New York State waters.  

On September 28, 2012, Liberty Natural Gas, LLC (Liberty), submitted an application to the

U.S. Coast Guard (USCG) and the Maritime Administration (MARAD) seeking a federal license to construct, own, and operate a deepwater port for the import and regasification of liquefied natural gas in federal waters off the coasts of New York and New Jersey

As stated in the Draft Environmental Impact Statement:

The purpose for licensing LNG deepwater ports is to provide a reliable and timely supply of natural gas and increase energy diversity, while considering impacts on the environment, safety, and security.

The Center agrees with the purpose of the project.