N.Y. power agency warns against energy shortages

Sunday, March 18, 2001 By David Robinson, The Buffalo News, N.Y.

The agency that runs New York's power grid is warning that the state needs to increase its electric generating capacity by 24 percent during the next four years to avoid serious electricity shortages and sharply higher prices. A new report by the New York Independent System Operator is the latest in a series of recent warnings that the state could face a painful power crunch and electricity prices that could be as much as 14 percent higher unless a string of new power plants are built.

"New York is headed toward a very serious situation unless it acts immediately to get new supply sited within its borders," said William J. Museler, the ISO's president and chief executive officer.

Between 1995 and 2000, the state's demand for electricity grew by 2,700 megawatts, while just 1,060 megawatts of new generating capacity were built.

And with New York's appetite for electricity expected to grow by 1.2 percent to 1.4 percent per year, the state needs to bring more power plants on line or else the balance between the amount of electricity available and the demand for power at peak times could grow dangerously close, the report warned.

That shrinking cushion, which could shrink from the current 15 percent reserve to what the report called a "dangerously low" 8 percent, could reduce reliability and put upward pressure on electricity prices.

Without new power plants, the state's electric prices could rise as much as 14 percent, on average. But if enough new generating capacity is brought on line, prices could actually decline by 10 percent to 15 percent, the report said.

In all, New York needs to add 8,600 megawatts of new generating capacity by 2005, with 4,000 to 5,000 megawatts needed to be approved this year, the report recommends.

More than half of the new capacity needs to be located near New York City and Long Island, where the power shortage could be especially acute, the report said. In contrast, the Western half of upstate New York generates about 39 percent more electricity than its peak demand, giving the region a more than adequate supply of power and vastly reducing the chances of shortages here.

The ISO report also urged the state to further streamline its process for siting new power plants. While projects that would add more than 29,000 megawatts of generating capacity have been proposed for the state — enough to nearly meet its current daily demand — no new power plant has opened in New York in five years and the proposed plants have moved slowly through the siting and approval process.

Clayton Ellis, a spokesman for New York State Electric & Gas Corp., which also has been outspoken in support of the need for more power plants, wasn't confident that much generating capacity could be added within four years. He noted that the application for the 1,080-megawatt Athens generating plant was filed in April 1998 but has yet to win approval.

http://www.enn.com/news/wire-stories/2001/03/03182001/energy_42588.asp

"How does the ISO expect 8,000 megawatts of generating capacity will appear by 2005 when the Athens plant has been entangled in this process for the last four years?" Ellis said.

-- Martin Thompson (mthom1927@aol.com), March 18, 2001