Energy Committee Update
April 12, 2012


Staff Contact: Darren Suarez

The Governor’s Energy Highway Task Force

Governor Cuomo, in his 2012 State of the State Address, put forward a proposal for an “Energy Highway,” promising to help provide reliable, economical power to New York’s homes and businesses for the next half century while creating jobs, energizing private-sector investment and protecting the State’s environment and the well-being of its citizens. 

The stated purpose of the New York State Energy Highway initiative is to address the following observations:

  • Dependable energy infrastructure is essential for economic growth.
  • Excess electrical power is available in upstate New York.
  • The potential to develop new resources.
  • Demand for energy is increasing, particularly in downstate New York.
  • New York’s transmission system requires significant rebuilding and upgrading.
  • The transmission system has bottlenecks, or congestion points, preventing
    power from flowing easily from upstate to downstate.
  • A number of power plants are facing uncertainties that could impact their
    future operations and they could retire, affecting communities where they are located.

Energy Highway Task Force Members:

  • Gil C. Quiniones, President and Chief Executive Officer, New York Power Authority (Co-Chair).
  • Joseph Martens, Commissioner, New York State Department of Environmental Conservation (Co-Chair).
  • Kenneth Adams, President & CEO and Commissioner, Empire State Development.
  • Garry A. Brown, Chairman, New York State Public Service Commission.
  • Francis J. Murray, Jr., President and Chief Executive Officer, New York State Energy Research and Development Authority.

The New York Energy Highway Summit was held Columbia University on April 4.

The New York Energy Highway Summit was an opportunity for national industry experts to explore various topics, including state energy policy objectives, public/private partnerships, case studies of infrastructure development success stories, and building a sustainable energy system. 

April 11, 2012 RFI Issued

The Energy Highway Task Force has set an aggressive timetable, beginning with the issuance of a Request for Information (RFI), in which experienced, knowledgeable parties, including the State’s investor-owned utilities, private developers, investors and other interested parties, are invited to propose and discuss projects that will advance one or more of the State’s specific objectives, as outlined in the RFI.

The Task Force is seeking information from parties on proposed projects that would address one or more of the following objectives:

  • Reduce constraints on the flow of electricity to, and within, the downstate area; and expand the diversity of power generation sources supplying downstate.
  • Assure that long-term reliability of the electric system is maintained in the face of major system uncertainties.
  • Encourage development of utility-scale renewable generation resources throughout the State.

The RFI is intended to solicit information related to potential projects that would be sustainable and environmentally responsible (there is no future without a clean environment), creative (the most advanced technology in the industry), economical (stakeholders include job seekers, job creators and ratepayers) and practical (actionable and deliverable). RFI responders should address how proposed projects would:

  • Create jobs and opportunities for New Yorkers.
  • Contribute to an environmentally sustainable future for New York State.
  • Apply advanced technologies that benefit system performance and operations.
  • Maximize New York State electric ratepayer value in the operation of the electric grid.
  • Adhere to market rules and procedures, and make recommendations for improvement as appropriate.

April 19, 2012 Conference of RFI Respondents and Interested Parties

Location: Double Tree Hotel
  455 South Broadway, Salons A & B
  Tarrytown, NY 10591
Time: Check-in, 12:30 p.m.
  Program, 1:00 p.m. - 3:00 p.m.
Target Audience: Investor-owned utilities, private developers, investors and other interested parties
Event Format: Introductory Remarks & Presentation by members of the New York Energy Highway Task Force Q&A

 

  • May 30, 2012 Responses to the RFI due.
  • Summer 2012 Task Force issues Energy Highway Action Plan.

Overview of the Energy Highway Task Force

The summit was well attended with over 500 participants. Co-chairman Quinones open the event with a presentation discussing the current status of the State’s “energy highway.”  “The state is awash in generating capacity because the recession has stunted industrial demand. But the state’s energy infrastructure is ailing,” said Quinones.

Quinones noted that most of the state’s transmission lines were built more than 50 years ago and many need to be replaced in the next ten years. Additionally, 67% of New York’s generating facilities statewide are 30 years and older. Repowering or replacing older, less efficient sources of electricity will provide important environmental benefits and reduce the economic burden on New Yorkers to comply with national air quality standards. Quinones stated a rebounding economy could push the need for power beyond current projections. The demand already exceeds our generating capacity in some areas of the state, demand is concentrated in New York City and Long Island; however, the majority of the supply is in upstate New York regions. A copy of a presentation by Quinones can be accessed at http://www.nyenergyhighway.com/Content/pdf/EH_MapCharts.pdf

Session 1 - Setting the Stage For Successful Investment in New York

Moderator Suedeen Kelly Partner, Patton Boggs, and former Commissioner, Federal Energy Regulatory Commission.

Panelists:

  • Stephen G Whitley, President and Chief Executive Office, New York Independent System Operator.
  • James P. Laurito, President, Central Hudson Gas & Electric Corporation; Chairman, Executive Committee, New York Transmission Assessment and Reliability Study.
  • Terry S. Harvill, Vice President, Grid Development, ITC Holdings Corporation.
  • Gavin J. Donohue, President  & CEO, Independent Power Producers of New York.
  • Timothy M. Kingston, Managing Director, Goldman Sachs.

The first session provided an in-depth overview of the Energy Highway, and set the stage for the rest of the day with a demonstration of need, desire, and possible private investment in infrastructure upgrades. James P. Laurito, president of the Central Hudson Gas and Electric Corporation and the chairman of a statewide study of transmission and reliability, stated that of the 12,000 miles of transmission lines in New York State, about 4,700 will require replacement in the next 40 years, he said. Bottlenecks in the system cost consumers $1.1 billion in 2010, he said, with cheap power from upstate unable to squeeze into downstate areas and more expensive plants supplying the electricity instead.

Session 2 - Case Study: The Role of Independent Transmission Companies

John Flynn, Vice President, Strategic Planning and Business Development, American Transmission Co. (ATC).

John Flynn discussed the development and role of ATC which provides electric transmission service in an area from the Upper Peninsula of Michigan, throughout the eastern half of Wisconsin and into portions of Illinois. ATC was founded in 2001, as the first multi-state, transmission-only utility in the United States. Formed in 2001 as the nation’s first multi-state transmission only utility, companies that transferred transmission assets or cash to ATC now are equity owners. ATC is regulated by the Federal Energy Regulatory Commission for rates and tariffs and regulated by states for siting transmission infrastructure. ATC operates a $3.1 billion transmission system with more than 9,440 miles of high-voltage transmission lines and 519 substations provide communities with access to local and regional energy sources.

Session 3 - Visioning the 21st Century Electricity Industry

William Parks, Senior Technology Advisory, Office of Electricity Delivery and Energy Reliability, US Department of Energy.

Mr. Parks, provided an overview of program at the Office of Electricity Delivery and Energy Reliability including:

Smart Grid Research and Development

  • Smart Grid R&D: Conducts R&D to integrate advanced information, communication, and control technologies into electric distribution systems.
  • Power Electronics: Develop cost-effective, grid-scale power electronics systems to improve grid efficiency and performance.

Clean Energy Transmission and Reliability

  • Transmission Reliability and Renewables Integration: Develop technologies and tools for the transmission system to improve situational awareness and enable operational response to changing system and market conditions.
  • Advanced Modeling Grid Research: Develop new models and computational techniques that consider dynamic effects upon the power system and provide the flexibility necessary to cost-effectively meet demand for reliable, affordable electricity.

Energy Storage

  • Develop large scale, stationary energy storage systems to improve the reliability, flexibility, and cost effectiveness of the existing grid, emerging Smart grids and support high penetration of renewables generation sources.

Cyber Security for Energy Delivery Systems

  • Develop advanced technologies to build a resilient energy infrastructure that can survive cyber attacks without loss of critical energy services through a comprehensive, integrated program.

Keynote Speaker Jon Wellinghoff, Chairman, Federal Energy Regulatory Commission.

Session 4 - Panel On the Sustainable Energy Highway

Anthony Collins, President, Clarkson University.

Panelists:

  • Frances Beinecke, President, Natural Resources Defense Council (NRDC).
  • Susan F. Tierney, Managing Principal, Analysis Group.
  • John J. Gilbert, III, Rudin Management.
  • Arshad Mansoor, Senior Vice President, Research and Development, EPRI.

The panel discussed the national focus on energy efficiency, and growing electricity demand—the time is right to assess energy efficiency from both an end-use perspective as well as across the utility value chain, from generation, to transmission, to distribution.

Susan Tierney described her research on the economic benefits of RGGI. Frances Beinecke used the panel as an opportunity to quickly express NRDC opposition to natural gas, it was unclear if that opposition was limited to shale gas. 

Arshad Mansoor discussed how energy efficiency is usually associated with the customer's compact florescent light bulbs and other energy saving appliances. He stated that there is a need to look at efficiency in more holistic manner. There is a need to review what people are doing with that energy are they in-fact increasing their electric energy consumption by displacing a combustion engine.

Assemblymember Kevin Cahill Public Statement

Assemblymember Kevin Cahill (D, Ulster, Dutchess), Chair of the Assembly Energy Committee, released the following statement on the Energy Highway Task Force Summit:
 
“The State has more than enough power to meet our electricity needs. Upgrades to the existing transmission system would make better use of New York’s resources, including clean renewable energy. One of the biggest problems of the deregulated energy market has been the failure to take on the transmission bottlenecks that existed for decades. Addressing these challenges represents one of the most effective ways to lower consumer costs, improve air quality and strengthen New York’s energy security.
 
“Today’s Energy Highway Summit put a spotlight on the challenges New York’s energy infrastructure is up against and the urgent need to move forward with a range of solutions to develop a 21st century system. Though it is a critical component, modernizing our transmission lines is not the only answer. Investments in efficiency, solar generation, smart grid and energy storage will all play essential roles. A coordinated plan to integrate all of these innovations will help create and sustain thousands of jobs across the state and insulate New York from the inevitable rise of natural gas prices and the very real impact of climate change.
 
“Last century, New York committed to developing our hydroelectric resources, which in turn drove the development of the electric system we have today. As that infrastructure nears the end of its lifespan, we have an opportunity to once again take equally bold actions to fundamentally transform the way we produce, deliver and use energy in the future.”