Central Hudson Gas and Electric Corporation, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation, and Rochester Gas and Electric Corporation: Petition for Identifying Areas of Concern Needs and Recommended Solutions

The New York State Public Service Commission (PSC) has solicited comments on a petition from Central Hudson Gas and Electric Corporation, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation, and Rochester Gas and Electric Corporation (the Upstate Utilities) to identify areas of concern and proposed solutions for meeting the clean energy and climate goals set by the Climate Leadership and Community Protection Act (CLCPA). In response, the Long Island Power Authority (LIPA) urges the PSC to carefully consider the proposed Phase 2A Projects, which aim to provide headroom increases to meet CLCPA needs, but lack a long-term view and detailed benefit/cost analysis.

Key Takeaways:

• The Upstate Utilities presented two sets of options for each Area of Concern, one that fully eliminates curtailment risk for the near-term CLCPA need and one that eliminates most, but not all, curtailment risk, with varying costs per MW of additional headroom capacity and cost per MWh of additional energy headroom.
• The Petition does not provide a metric of benefits against which to evaluate the costs of the Phase 2A Projects, making it difficult to assess their value proposition.
• LIPA recommends that the PSC approve only the most valuable headroom increases - a "no-regrets" set of solutions - and require further evaluation of projects whose headroom benefits may not justify the costs.
• The headroom assessment lacks a long-term view, neglecting changes expected to occur after 2030, which could reduce the need for headroom on the affected circuits.
• The Upstate Utilities' analysis of energy headroom helps to distinguish the relative costs of the Phase 2A Projects but relies on a static assumption that is likely to change substantially over time.
• The PSC should limit its approval to Phase 2A Projects needed to unbottle existing generation or generation under construction, and subject transmission needed for proposed generation undergoing interconnection studies or competing for future contracts to a more rigorous evaluation.

Statistics:

• The lowest cost proposed set of Phase 2A projects are estimated to cost an average of $1,300/kW, which is a substantial adder to the cost of renewable energy.
• The Phase 2 projects identified in Appendix C of the Power Grid Study averaged less than $1,000/kW for every utility.
• The Upstate Utilities provided at least two sets of options for each Area of Concern, presenting the cost per MW of additional headroom capacity and cost per MWh of additional energy headroom.

Sources:

• Case 20-E-0197, Proceeding on Motion of the Commission to Implement Transmission Planning Pursuant to the Accelerated Renewable Energy Growth and Community Benefit Act
• Petition of Central Hudson Gas & Electric Corporation, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation D/B/A National Grid, And Rochester Gas and Electric Corporation; Identifying Area of Concern Needs and Recommended Solutions (March 8, 2022)
• Order on Local Transmission and Distribution Planning Process and Phase 2 Project Proposals (issued September 9, 2021)
• Initial Report on the New York Power Grid Study (filed January 19, 2021)
• New York State of the State Book 2022