power to the people: electric transmission in nys kent gardner president & chief economist...
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Power to the People:Electric Transmission in NYS
Kent Gardner
President & Chief Economist
Center for Governmental Research
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Annual Policy Conference 2009
Key IssuesGoal: Reliable power at the lowest possible price
Proximity to & relative abundance of fuel source Cost of plant construction & operation Competitive climate Policy variations in tax & regulation Spatial mismatch between supply & demand
(“generation” and “load”)Core conflict: Better electric transmission creates
winners & losers Within franchise territories of utilities (“load serving
entities”) Across regions/states within the same regulatory
jurisdiction (“independent system operator” or “regional transmission operator”)
Across regulatory jurisdictions
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Annual Policy Conference 2009
Prices vary dramatically
WAUTALCONCLAIL
WIMIPA
US-TOTALTXNJMANYCT
0 2 4 6 8 10 12 14 16 186.46.4
7.67.87.8
8.48.58.58.5
9.19.1
10.113.0
15.215.2
16.5Total Price of Electric Power
Cents per kwh
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Annual Policy Conference 2009
Why do prices vary?Fuel source
Washington: 74% from hydro Pennsylvania: 54% from coal Connecticut: 49% from nuclear, 30% from natural
gas New York: 31% from natural gas, 29% from nuclear
Cost of new generation: construction & siting Land & labor Local empowerment
Transmission from (or to!) cheaper locales
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Annual Policy Conference 2009
Coal is cheap
Coal
Petroleum
Natural Gas
0 100 200 300 400 500 600 700 800
Cost of fuel
Cents per million BTU
And nuclear?
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Annual Policy Conference 2009
NYC: World’s largest & most complex
“load pocket”
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Annual Policy Conference 2009
New generationis difficult to site
near NYC
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Annual Policy Conference 2009
Transmission brings power to the people
765 kv fromHydro Quebec
Neptune cable from NJ
Cross-Sound cable from CT
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Annual Policy Conference 2009
Spatial mismatch creates price variation
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Annual Policy Conference 2009
Solution? Add new
transmission
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Annual Policy Conference 2009
But not in my backyard
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Annual Policy Conference 2009
Yet generation is also difficult to site
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Annual Policy Conference 2009
Indian Point licenses expire by 2015
Opposition is vigorousRiverkeeper leads the charge with help
from sloop Clearwater & founder Pete Seeger, Bobby Kennedy, AG Andrew Cuomo
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Annual Policy Conference 2009
Tradeoff: Risk v. power reliability
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Annual Policy Conference 2009
Solution (again) is transmission
LI Power Authority contracts for 500kv Neptune transmission line, 660 mw capacity, from New Jersey: Began operation in 2007
NY Power Authority contracts for 345kv line under Hudson from New Jersey: 500 mw dedicated from NG plant with capacity for add’l 160 mw, to be completed in 2010
Reliability improved by addressing “seams” between ISOs & RTOs
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Annual Policy Conference 2009
Fixing “seams” raises conflicts b/n states
Cross-Sound cable between Shoreham, Long Island & New Haven, Connecticut: Environmental conflict over cable placement a proxy for “don’t send our power to New York”? Turned on after 2003 blackout by federal
orderFERC has the unenviable task of playing
umpire among states & ISOs/RTOs
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Mason Emnett Senior Legal Advisor, Office of Energy
Policy and Innovation Federal Energy Regulatory Commission
Sue Gander Director, Environment, Energy & Natural
Resources Division National Governors Association ‐ Center for
Best Practices