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Power to the People: Electric Transmission in NYS Kent Gardner President & Chief Economist Center...
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Transcript of Power to the People: Electric Transmission in NYS Kent Gardner President & Chief Economist Center...
Power to the People:Electric Transmission in NYS
Kent Gardner
President & Chief Economist
Center for Governmental Research
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
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
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
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?
Annual Policy Conference 2009
NYC: World’s largest & most complex
“load pocket”
Annual Policy Conference 2009
New generationis difficult to site
near NYC
Annual Policy Conference 2009
Transmission brings power to the people
765 kv fromHydro Quebec
Neptune cable from NJ
Cross-Sound cable from CT
Annual Policy Conference 2009
Spatial mismatch creates price variation
Annual Policy Conference 2009
Solution? Add new
transmission
Annual Policy Conference 2009
But not in my backyard
Annual Policy Conference 2009
Yet generation is also difficult to site
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
Annual Policy Conference 2009
Tradeoff: Risk v. power reliability
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
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
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