The New York Independent System Operator (NYISO) last Thursday called for the approval of 5,000 MW to 7,000 MW of new generating capacity in the next five years to maintain a reliable supply of electricity and keep prices competitive in the state.

In a new report, the grid operator also said that electricity supplies in the state are adequate to meet power demand for “normal” summer weather.

The report, “Power Alert III: New York’s Energy Future,” updates two previous power alerts, the most recent of which was issued in March of last year. In the March 2002 report, the grid operator called for the addition of a total of 7,100 MW of capacity by 2005, which was down from the 8,600 MW called for in the original report.

In the latest report, the NYISO said that while the economy may have softened, New York’s power consumption has not. But because relatively little new capacity has been added, system conditions were so tight during 2002 that the grid operator was forced to invoke its emergency demand response program on two occasions. For the summer of 2003, New York City is expected to have just enough supply for normal weather.

The NYISO projects that in the next five years, the statewide load should increase from about 31,450 MW to 33,800 MW, prompting the need for an additional 2,360 MW. However, the grid operator said that more than 5,000 MW of additional capacity needs to be developed in the next five years, with a majority built in downstate New York and Long Island. Approximately 2,500 MW is under construction, but beyond that, only another 1,000 MW is realistically on the horizon, the report said.

The NYISO said that in order for new capacity to come online as soon as possible, the state legislature must immediately reauthorize Article X, a statute that streamlines the process for siting new power facilities.

“New York’s siting law was a model of how to streamline the process of reviewing and making decisions on siting new power plants,” said NYISO CEO William Museler. “NYISO has achieved considerable success in operating the state’s energy markets, but the failure to renew the siting legislation, in combination with national events [the Enron collapse and the California energy crisis], has rendered New York State less attractive to potential investors.”

Meanwhile, the report said that electric system congestion has cost New Yorkers $2.75 billion in the last three years. In order to resolve bottlenecks in the state’s transmission system, the NYISO recommended expanding transfer capability between Marcy, near Utica, and Pleasant Valley, near Poughkeepsie. Transmission capability also needs to be increased in New York City and Long Island, the NYISO noted.

In addition, the report recommends expanding and enhancing three NYISO programs aimed at increasing demand response and conservation.

More broadly, the report recommends re-examining the state’s three-decade-old reliability criteria in light of today’s more power-intensive, high-tech business environment. It also urges an open, transparent process to plan New York’s electricity infrastructure be initiated as soon as possible.

The report said that security considerations must also come into play. The NYISO noted that it is essential “to continue to evaluate how outside forces might try to sabotage New York’s electric system — and take appropriate steps to prevent any harm.”

The report can be downloaded from the NYISO’s website at: www.nyiso.com.

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