In its September 2015 Final Report, the New York
State Department of Public Service (DPS) Trial Staff outlined the need for the AC
Transmission Upgrades, which were subsequently adopted by the New York Public Service Commission in December 2015. The determination was that a project like NYES would
fulfill thirteen calls to action. These public policies are:
Reduced production costs resulting from congestion
relief
Historic congestion on New York’s bulk electric grid
between Upstate and Downstate has resulted in higher electric bills for
Downstate New York customers. (Congestion is more thoroughly explained here.) Relieving congestion
would allow cleaner, cheaper energy to flow from where it’s produced Upstate to
where it is needed Downstate. This would result in lower energy production
costs.
Improved preparedness for impacts of generator
retirements
In New York, many power generators are reaching or
exceeding their useful life expectancy. Generator retirement poses risk to
electric reliability and market competition in New York, especially in southeast
New York where there is a lot of electric demand. With the build-out of the
project, New York could respond to generator retirements more flexibly.
Enhanced reliability
A reliable transmission system has a strong AC
transmission backbone, and can respond to emergencies on the system. In 2014,
the New York Independent System Operator (NYISO) completed its 2014
Comprehensive System Plan, and while the electric grid is reliable today and
looks to be in the next ten years, an upgraded AC transmission system will
allow the NYISO to be flexible in its reliability planning. This would be
important if, for example, a Downstate electric generator retires and more of
Upstate New York’s surplus power is needed to serve customers reliably.
Reduced costs of meeting the Renewable Portfolio
Standard (RPS)
Relieving congestion on the bulk electric grid would
provide greater access to wind power from Upstate New York, and provide greater
revenues to encourage these clean resources. Currently, there are over 20 wind
projects in Upstate New York in development and waiting to be built.
Reduced capacity resources costs
To ensure that adequate energy supplies can meet
demand, capacity must be purchased on a long term basis along with purchasing
energy to serve daily needs. When a transmission constraint exists, this drives
up the price of that energy capacity downstream from the constraint (in this
case, southeast New York). Relieving transmission congestion could result in
capacity savings for all of New York.
Enhanced incentives to develop new efficient
generation upstate
As with many goods and services, it is cheaper to
build and produce power in Upstate New York than it is Downstate (e.g., cheaper
real estate, lower taxes, etc.). Relieving congestion could promote the
build-out of cheaper, cleaner power generators Upstate with a wider, more
flexible market to sell to Downstate.
Reduced environmental emissions and improved health
impacts
When congestion constraints are relieved and energy
is able to flow more freely, greenhouse gas emissions caused by older, dirtier
generators can be avoided. Large scale renewable generation is sited mainly in
Upstate New York due to cost and space limitations in Downstate New York.
Avoided refurbishment costs of aging transmission
Much of the existing transmission infrastructure
along the NYES route is over 50 to 80 years old. The project would replace
aging infrastructure that would need replacing within the next 10 years,
Increased tax receipts from increased infrastructure
investment
Utilities pay property taxes to municipalities for
the property and assets that they own, like transmission lines. New
infrastructure would increase tax revenues for municipalities, allowing for an
increase in services, and/or a reduction in resident property taxes for the
community.
Increased employment
Not only would temporary jobs be added in New York
to construct the project, but permanent operations and maintenance jobs would
also be created. If the project is built, there would also be an increased
probability that new generation would be sited in Upstate New York, adding more
jobs to those communities as well.
Enhanced resiliency/storm hardening
Upgrading New York’s transmission system is
imperative to continue the state’s storm hardening efforts in the wake of
Superstorm Sandy. The upgraded facilities would help guard against the
volatility of severe weather events, including heat waves in the summer and
below-freezing days in the winter.
Enhanced planning and operational flexibility
When transmission is increased, this provides the
electric grid operator with greater and more efficient operational flexibility.
When congestion bottlenecks are relieved, this allows the grid operator to dispatch
lower-cost, cleaner energy to the bulk electric grid. Further, if lines need to
be taken out of service for maintenance and congestion on the Central East and
UPNY-SENY interfaces persists, it could cause increased congestion on other
lines and increased energy prices during that time. Relieving this congestion
will be beneficial as aging transmission lines continue to be maintained,
replaced, and upgraded.
Other potential benefits include: synergy with other
future transmission projects; relief of gas transportation constraints;
improved market competition and liquidity; and fuel diversity.