By William Opalka

ALBANY, N.Y. — New York regulators on Thursday declared a public policy need for long-proposed transmission upgrades and recommended finalists to make competitive bids to NYISO (13-T-0454).

The New York Public Service Commission advanced its AC Transmission proceeding by adopting staff recommendations to select two main projects from 22 proposals for new 345-kV transmission crossing the Central East and UPNY/SENY interfaces: the upgrade of the 91-mile, double-circuit 230-kV Edic-New Scotland-Rotterdam line to 345 kV and the upgrade of the 51-mile, double-circuit 115-kV Knickerbocker-Pleasant Valley line to a 115/345-kV double circuit. (See NYPSC Staff Recommends $1.2B in Transmission Projects.)

NYISO will review transmission and other solutions to address the public policy need identified by the commission, which said persistent transmission congestion causes higher prices and raised reliability concerns.

The declaration will allow the winning developers to obtain cost recovery from the beneficiaries of the upgrades under NYISO’s Tariff. FERC Order 1000 requires transmission providers to consider transmission needs driven by public policy requirements established by state or federal laws or regulations.

The commission asked NextEra Energy Transmission New York, North America Transmission and a coalition of utilities known as the New York Transmission Owners to submit their projects for consideration by the ISO.

The commission’s vote was a victory for Gov. Andrew Cuomo, who proposed an “Energy Highway” to eliminate bottlenecks preventing the delivery of upstate power to load in and around New York City.

Although the ISO will consider non-transmission alternatives, the commission rejected the arguments of the Hudson Valley Smart Energy Coalition and others who insist system reliability could be maintained by increased energy efficiency if even a small percentage of proposed downstate power plants are built.

“There’s no question we need transmission to move power from upstate to downstate, just to maintain basic reliability,” commission Chair Audrey Zibelman said at the meeting.

Later, she said the projects would benefit older, struggling upstate plants. “It makes no economic sense to have plants sit idle when we could have them operating to serve needs downstate,” she said.

Using Existing Rights of Way

The selected projects will be built within existing transmission corridors, with new substations at several points. The PSC said the lines were reaching the end of their useful lives and would need to be replaced in any case.

The upgraded lines will use towers of up to 105 feet to meet NERC standards. The current, lower voltage lines are generally 80 to 85 feet high.

The projects have an estimated cost of $1.2 billion. Officials said a “conservative” cost-benefit analysis by The Brattle Group showed at least $1.20 in benefits for every $1 spent.

“There’s some analysis that the savings from the recommendations could reach $2,” Zibelman said. The savings primarily come from the reduction in congestion charges on those parts of the New York system that are projected to hit $473 million in 2019, rising to $562 million in 2024, without the upgrades. The gap could be even higher if natural gas prices rise from their current low levels.

Raj Addepalli, managing director of utility rates and service for the PSC, presented what he called an “optimistic” timeline under which NYISO could complete its solicitation and analysis of proposals by the second quarter of 2016.

The commission will have to approve the ISO’s recommendations and grant siting certificates for the selected projects. Final commission approval could come in 2017, followed by a two- to three-year construction schedule, with an in-service date of 2019.

NYISO CEO Bradley Jones issued a statement saying the move is an important step in remedying the state’s aging infrastructure. “The NYISO stands ready to solicit projects and will conduct the planning studies necessary to select the most efficient and cost-effective projects that will meet the public policy needs identified by the commission,” he said.

Lifeline for Nukes?

After the meeting, Linda DeStefano of Syracuse, representing the Alliance for a Green Economy, objected that the transmission projects could provide a lifeline to nuclear plants on Lake Ontario. “We think that Gov. Cuomo is very concerned about Indian Point, but we wanted to make the point that we think that the nuclear plants near us are also very old and not safe,” she said.

Phil Wilcox, who observed the meeting on behalf of the International Brotherhood of Electrical Workers Local 97, based in Buffalo, had a different take. “This will give [the nuclear plants] a signal that they may have a future,” he said. Unions have been vocal in support of keeping struggling nuclear plants operating.

No Conflict with REV

The commissioners rejected complaints that the projects would conflict with the state’s Reforming the Energy Vision initiative, a plan to increase the use of distributed and renewable energy.

“The future envisioned by REV is that distributed energy resources deployed locally will help customers become efficient and dynamic electric users. These new customer resources will also be able to be used to more effectively balance increased investments in wind and solar resources that are deployed remotely,” the commission said.

“Additionally, the commission recognizes that large scale central generation, including our safe upstate nuclear facilities that are in their licensed periods, can continue to be operated and new investments can be made to compliment [sic] the distributed resources. Stated another way, while there is no doubt that we can all become better environmental and economic  stewards by becoming more efficient energy consumers and using energy more efficiently, the commission also recognizes that in its entirety the optimal system design will be met by a balance of central station and distributed resources and that this balance will be found by markets that accurately value resources and public policies that stress the importance of building an electric system that reduces waste and decreases rather than increases reliance on fossil fuels.”

Projects Selected

Below is a more detailed description of the projects identified by the New York Public Service Commission as the transmission needs driven by public policy requirements:

• Segment A: Construction of a new 345-kV line from Edic or Marcy to New Scotland; construction of two new 345-kV lines or two new 230-kV lines from Princetown to Rotterdam and decommissioning of two 230-kV lines from Edic to Rotterdam.
• Segment B: A new double circuit 345 kV/115-kV line from Knickerbocker to Churchtown; a new double circuit 345-kV/115-kV line or triple circuit 345-kV/115-kV/115-kV line from Churchtown to Pleasant Valley; decommissioning of a double circuit 115-kV line from Knickerbocker to Churchtown; decommissioning of one or two double-circuit 115-kV lines from Knickerbocker to Pleasant Valley. The commission ordered Orange and Rockland Utilities, the owner of the Shoemaker-Sugarloaf facilities, and Central Hudson Gas & Electric, the owner of the Rock Tavern substation, to cooperate with the developer selected for Segment B.
• Upgrades to the Rock Tavern substation: New line traps, relays and other upgrades needed to accommodate higher line currents resulting from the new Edic/Marcy-New Scotland, Princetown-Rotterdam and Knickerbocker-Pleasant Valley lines.
• Shoemaker to Sugarloaf: A new double circuit 138-kV line from Shoemaker to Sugarloaf; decommissioning of a double circuit 69-kV line from Shoemaker to Sugarloaf.