NY Seen Scraping By With Just Enough Power This Summer
By KRISTEN MCNAMARA
Of DOW JONES NEWSWIRES
NEW YORK -- New York should have just enough electricity to meet demand this summer, but an extended heat wave or unexpected outage at a large power plant could erase the thin reserve margin and trigger prices spikes or temporary blackouts, utilities and state's power-grid operator said.
Little new generation is expected to be added, particularly in New York City, where transmission bottlenecks make it difficult to import power. And demand is holding up better than expected, with most of the consumption knocked off line by the attack on the World Trade Center already back up in other areas of utility Consolidated Edison Co.'s (ED) service territory.
"We're just going to scrape by this summer," said Steve Sullivan, spokesman for the New York Independent System Operator, the nonprofit organization overseeing the state's wholesale electricity market and transmission system. "We're just barely getting by, and that's not how we should be operating the system."
The ISO forecasts power consumption will peak at 30,910 megawatts this summer, up 0.41% from what the grid operator had expected for 2001. New York rules require the state to keep 1,800 megawatts of electricity in reserve above the expected peak load every day.
At one point last summer, the state was using all but 600 megawatts of its operating reserves, Sullivan said. The back-up supplies could have been gobbled up if the state hadn't cut demand by 1,500 megawatts through voluntary conservation programs, he added.
Still, a four-day heat wave in the Northeast U.S. last summer sent electric demand in New York soaring to record levels and pushed day-ahead power prices in the city to $300 per megawatt-hour, three to six times higher than prices seen during the rest of the month. Areas of the state saw scattered outages, as power plants and lines strained to keep up with demand. The ISO cut the voltage of electricity flowing through the state's power lines by 5%, and state offices closed early one day to conserve energy.
Cutting It Close
Consolidated Edison, which delivers power to customers in New York City and parts of Westchester County, said supplies will be tight again this year, with demand seen at levels similar to last year's.
"We're in the same position we were in last summer," Con Edison spokesman Joe Petta said. "The supplies will be tight but adequate."
The downturn in the economy and the loss of electricity demand from the collapse of the World Trade Center contributed to the Con Edison's flat summer forecast. But when the economy picks up, power consumption will too, and New York City will continue to need more generation to meet the expected growth in demand, Petta said.
About 75% of the 90-megawatt load lost when the Twin Towers collapsed has already relocated within Con Edison's service territory, Petta said. Adjusted for weather, daily peak demand was higher this January than in the same month last year, Con Edison has found. The utility hasn't determined whether the increase was an anomaly, Petta said.
Once again this summer, New York will rely on the 400 megawatts of output from 10 controversial turbines the New York Power Authority sited around the city last year to meet peak summer demand.
Community groups opposed the generators, accusing the power authority of failing to evaluate their environmental impact. The two sides battled in court, and the state's highest court last fall ordered NYPA to conduct a full environmental review by the end of January or risk having the units shut down.
A judge is expected to decide Feb. 22 whether the review was adequate and whether the generators can run this summer, according to spokeswomen for the power authority and the New York Public Interest Research Group, which sued NYPA on behalf of the community groups.
About 140 megawatts of new generation are slated to come on line in New York City by June 2002, ISO spokesman Sullivan said. NYC Energy, a privately held generating company, is planning to anchor a barge carrying a 79.9 megawatt peaking unit near the Brooklyn Navy Yard, despite protests from neighborhood groups.
Calpine Corp. (CPN) said it's working to add 45 megawatts to its existing Kennedy International Airport Power Plant, and East Coast Power is slated to add 15 megawatts to its existing Linden Cogeneration plant, which is located in New Jersey and supplies power to Con Edison, the ISO said.
Two additional 79.9 peaking units on Staten Island, which were expected to be on line for summer, won't start up until later this year due to permitting delays, according to Roger Kelly, a technical engineer with Fortistar, the private independent power producer building the units.
Long Island Supplies Tight
Long Island is slated to see about 400 megawatts of new generation in time for summer, primarily from turbines added to existing plants. Demand for electricity on Long Island this summer could be 1.3% higher than it was last year, the New York ISO said. Without the new supplies, the island could be 135 megawatts short of the 4,680 megawatts it needs to meet demand while maintaining a reserve cushion, Sullivan said.
"The supplies are tight," Michael Lowndes, a spokesman for the Long Island Power Authority said. "Even with the addition of new generation, we're still going to ask consumers to conserve in every way. We're not out of the woods yet by any means."
While New York expects to squeak by this summer, it could see an even smaller margin between electric supply and demand in the summer of 2003, according to the New York ISO and Con Edison.
Five projects that would add almost 3,500 new megawatts to New York have been approved the state's siting board, but fewer than half of those megawatts are scheduled to be on line in 2003, according to the New York Public Service Commission.
New York needs more baseload units, which run all the time and generate relatively inexpensive power, rather than the peaking units popping up around the state, Sullivan said.
-By Kristen McNamara, Dow Jones Newswires; 201-938-2061; kristen.mcnamara@dowjones.com
Updated February 12, 2002 9:00 a.m. EST |
