Electricity Outlook 2010-2025

A Long-Term Deficit Looms, As Do Potential Shortages in 2010-2015

While some new generating capacity has been built or is under construction since the New York Building Congress and other City-based business and labor groups first brought attention to this issue in 20013 , the long-term problem of needed supply and demand-side management remains.

The 2001 report, Electricity Outlook: A Matter of Urgency, demonstrated a need for 2,000-3,000 MW of new electricity resources by 2006. Since then:

• 775 MW of new generation capacity has been completed or will be in place by year-end 2005, with an additional 1,000 MW expected by 2006 for a total of 1,775 MW.
• Peak-load demand in New York City has grown from 10,500 MW in 2001 to 11,304 MW in July 2005.
• The 500 MW goal for energy efficiency and other distributed resources has not been re alized.
• The New York State Article X power plant approval process has expired and no agreement has been reached on legislation that would reauthorize or replace this important streamlining mechanism that is necessary for the approval of new power plants and the repowering of existing plants.

By year-end 2005, 125 (net) MW were added with the completion of Con Edison’s East River Repowering project. In 2006, an additional 1,000 MW areexpected from the completion of the New York Power Authority’s (NYPA) 500 MW Poletti Plant and the 500 MW SCS plant in Astoria. The latter project is going forward due, in part, to a 10-year power purchasing contract with Con Edison.

These projects received approval prior to the expiration in December 2002 of the Article X licensing process. Two other projects in New York City with full approval are currently on hold: Reliant’s 562 (net) MW Phase I and II Repowering Project in Astoria, and the 500 MW of SCS Phase II Astoria Energy Project.

Most urgent is the immediate problem of a potential shortage in projected capacity reliability by the years 2010-2015.

In its December 21, 2005 Reliability Needs Assessment report, the New York Independent System Operator (NYISO) stated that, beginning in 2008, “ the Lower Hudson Valley and south will need system reinforcements equivalent to 500 MW of capacity, which could consist of transmission reinforcements, additional generation, demand side management, or a combination of the three... the Hudson Valley, New York City and Long Island will need 1,250 MW of electricity capacity by the end of 2010 and 2,250 MW by 2015.”

The years between 2005 and 2009 are expected to see substantial new developments in office, residential and infrastructure construction throughout the five boroughs. Without the assurance of new electricity capacity in the construction pipeline, the start dates of many of the proposed projects could be jeopardized.

Meeting the Short-Term Deficit: Assuring Sufficient Electricity Resources by 2010-2015

The New York Power Authority (NYPA) issued a Request for Proposal (RFP) in mid-March 2005 seeking 500 MW of In-City electricity capacity by 2008, from either generation or transmission, to serve its New York City government customers.

This amount, together with up to 675 MW from a distributed resources program planned by Con Edison and the New York State Energy Research and Development Authority (NYSERDA), could help forestall the impending problems that begin in 2008.

With the long lead time needed for approval, planning and construction of new generation, transmission and distribution projects, the opportunity for planning and constructing these new facilities is rapidly narrowing.

What is Needed to Meet the City’s Electricity Needs?

• Additional electric generating capacity
• Additional electric transmission and distribution infrastructure
• Additional demand-side management programs: energy efficiency, clean on-sitegeneration, peak load management, and high performance building design.

Major Projects Also Require:

• Substations
• Telecommunications
• Electric Cables
• Water
• Gas and Steam Mains
• Sewer

Substantial investment will be required over the next twenty years to provide the necessary infrastructure for major projects and for housing and commercial development
throughout the five boroughs.

Who Can Solve the Problem?

Both the public and private sectors share the responsibility of ensuring that
New Yorkers continue to have adequate power.

To do so requires:

• Aggressively promoting the construction of new power plants, transmission
  and distribution facilities and additional natural gas pipeline capacity; and
• maintaining and strengthening energy efficiency programs in both the public
  and private sectors, investing in small, clean distributed generation
  technologies, and exploring options for renewable energy such as wind
  and solar power.

While the New York City Mayor and City Council have no direct legislative role in or control over the process of generating or providing electricity, including the matter of local plant siting, the ultimate imperative-- if not the authority -- of assuring that New York City has sufficient power for its residents and businesses will be borne by the City government.

The Comprehensive Reliability Planning Process released by NYISO in December 2005, and the System Reliability Assurance Study released by Con Edison on December 30, 2005, have identified the long-term electric infrastructure needs of the New York City area to ensure system reliability through the year 2015. These new studies underscore the urgent need for New York’s Governor and Legislature to enact the laws and regulations to facilitate the siting, placement, approval, and financing of environmentally sound, efficient power plants, and ensure that they are built in a timely fashion so that needed electricity supply is available.

New York City businesses, residents and governmen t need to know that the mechanisms to provide this vital electric capacity are in place.