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NYISO, ERCOT Ready for Summer

Power authorities in New York and Texas are predicting ample electricity supplies for this summer, but the years ahead are less certain. New York still must resolve siting issues that are impeding generation capacity growth, some say. And Texas must be mindful that the plants that generators are planning to build actually come to fruition.

The New York Independent System Operator (NYISO) expects the state to set a new power usage peak this summer but predicts that power supplies will be adequate, at least for this year.

NYISO released a peak load forecast of 33,295 MW. If this level is achieved it will be the first time since 1996 and 1997 that a new peak has been set in consecutive years. Last summer's load peaked at 32,075 MW July 26, breaking a then week-old record 31,741 MW. New York City-based Consolidated Edison (Con Edison) said on Wednesday that it is expecting another record-setting summer with peak demand of 13,400 MW, surpassing last year's record on July 27 of 13,059 MW. The utility company is spending more than $1.2 billion this year to upgrade and reinforce its electric delivery system for its nine million customers in New York City and Westchester County.

NYISO said that because of generation additions and the implementation of demand-response programs, as well as the availability of out-of-state capacity, New York City, Long Island and upstate New York all should have adequate supplies.

"Economic growth, particularly in the southeastern portion of the state, coupled with increased air conditioning demands throughout the state, are helping to drive the summer peaks to these new levels," said Michael Calimano, NYISO vice president, operations. "Last summer's peak surpassed the 2001 record by nearly 1,100 MW, and we are forecasting another 1,200 MW increase this summer."

While supplies are projected to be adequate, NYISO is still calling on lawmakers to reinstate the Article X power plant siting law. Article X expired at the end of 2002, and according to NYISO's 2005 Reliability Needs Assessment, the southeastern part of the state will need system reinforcements totaling 500 MW of capacity by 2008. Additionally, the region will need 1,250 MW of capacity by 2010 and 2,250 MW by 2015. These additional supplies could come from new transmission, generation, demand-side management, or a combination of the three.

"We strongly urge New York lawmakers to pass a power plant siting law to help avoid potential supply shortfalls in the future," said NYISO CEO Mark Lynch. "Supplies could start becoming very tight in less than two years."

NYISO is required to maintain a year-round 18% reserve margin. This means that from May 1 through October, 39,288 MW of installed capacity, including reserves, will have to be maintained. NYISO expects that 38,169 MW of installed capacity will be available from in-state resources this summer. That number will increase to 43,487 MW with the addition of new generation, out-of-state supply and the capacity that demand-response programs in the state provide.

For New York City, installed in-city capacity required May through October is 9,304 MW. With the addition of 500 MW of new generation, as well as capacity available from demand-response programs, the total capacity will be 10,404 MW. Long Island has an on-island capacity requirement of 5,295 MW and will have 5,732 MW available, NYISO said.

Texas

While rolling blackouts that gripped the state in April (see NGI, April 24) might suggest otherwise, the Electric Reliability Council of Texas (ERCOT) reported a power reserve margin of 16.9% for this summer, about 3% greater than was projected last year for summer 2006.

Summer peak demand is projected to be 61,656 MW, which is 1,382 MW greater than ERCOT's all-time system peak of 60,274 MW, set Aug. 23, 2005. In April, ERCOT set an all time peak for that month, estimated at 51,714 MW of demand.

This year's assessment uses a 2.3% increase in the projected annual demand growth rate, up from 1.8% used in last year's assessment, based on an updated economic outlook for Texas. The "firm load forecast" that ERCOT uses to calculate the reserve margin is 60,544 MW, which is the total summer peak minus 1,112 MW of interruptible load, which counts as a resource.

Total available resources for 2006 are estimated at 70,756 MW, a slight increase from 69,287 MW projected at the same time last year. Included in available resources is 2,100 MW out of the 9,000 MW of mothballed capacity based on availabilities provided by the generation unit owners.

Between 2006 and 2011, official reserve margin declines every year from 16.9% in 2006 to 4.9% in 2011, according to ERCOT. However, the agency has worked up three alternative scenarios to predict reserve margins: 1) if all mothballed generation returns to active status; 2) if no mothballed units return; and 3) including new publicly announced generation projects with air permits either requested or issued but with no interconnection agreement.

If all mothballed units returned to the ERCOT fleet, the reserve margin would reach a high of 26.4% in 2007 and decline to 15.6% in 2011. With no mothballed units returning, reserve margins decline about 3% per year to 2.2% in 2011. The scenario that includes announced plants is the brightest. The reserve margin dips to 12% in 2008 but jumps to 20% in 2009, 24% in 2010, and ends up at 23% in 2011.

ERCOT is tracking a total of 13,454 MW of thermal generation that has been publicly announced but is in various stages of interconnection studies and air permit proceedings. Only 1,300 MW of these planned additions, those with completed interconnection agreements, are counted in the official reserve margin.

"Reserve margins are forecasts based on best estimates of a snapshot in time," said Bill Bojorquez, ERCOT director of system planning. "While we do have some firm commitments for new plants, our calculations follow the methodology approved by the ERCOT Technical Advisory Committee. We have added a scenario to show what happens if publicly announced plants which have filed for air and or transmission permits are built."

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