Power Producers Produce Five-Point Energy Solutions Plan

Power producers in New York want to accelerate the siting process for clean power sources and to avoid a California-style electricity supply crisis.

ALBANY, New York, US, 2001-09-08 [SolarAccess.com] Power producers in New York want to accelerate the siting process for clean power sources and to avoid a California-style electricity supply crisis. “New York is at a crossroads,” says Gavin Donohue, executive director of the Independent Power Producers of New York, Inc. “We can either go down the same road as California, leading to high energy prices and debilitating shortages, or we can follow the examples of other regional energy markets so that we continue to enjoy reliable energy at competitive prices.” The group has released a five-point Energy Solutions Program for the state, which he explains is an action plan to address long- and short-term energy needs. “As we move into the hot, humid days of July and August, when the air conditioners are humming and power demand skyrockets, the time is right to highlight the need to solve the potential energy shortages and volatile energy prices that face New York consumers,” he adds. Although a California-like emergency is unlikely to hit New York this summer, he says the state will experience energy shortfalls and price increases in the near future unless the government, power suppliers and consumers take steps to address known problems. “We were struck by the contrast between California and states like Pennsylvania, where customers enjoy adequate supply and prices 4.5 percent below the national average,” says Donohue. IPPNY examined the experiences of other states, in addition to various metropolitan markets in New York since the state began to restructure its power market in 1996, and the group’s ESP is based “on proven results,” he says. The program calls for energy conservation by commercial and industrial consumers, to reduce New York’s power needs. The ‘Energy Smart’ program of NYSERDA (New York Energy Research & Development Authority) is a good start by providing information and conducting research on energy efficiency, and providing incentives for consumers to purchase energy efficient products, but “conservation would be further encouraged if all energy users were able to readily see how the cost of electricity differs throughout each day.” An easy start would be a tiered system of rates, with higher costs for power in mid-day when power is at peak demand. The group also wants utilities to enter into contracts and use financial risk-management techniques to protect consumers against short-term price volatility. Prices on the spot market rise based on supply and demand, and utilities can insulate against abrupt price changes by relying more on a rational blend of contracts with power suppliers. The New York Independent System Operator estimates that the state needs 8,600 MW of new generating capacity by 2005 to meet growing demand. The state has not installed a major new power plant since 1995. About 30 percent of New York’s electricity is generated by natural gas, 15 percent from coal, and 24 percent from nuclear reactors. “New York’s power system should not become dependent on one source of fuel,” says the report. “A mix of fuel sources – natural gas, hydropower, wind energy, solar power, biomass, waste-to-energy, nuclear, and coal – ensures that price and supply fluctuations of one type of fuel don’t unduly impact New York’s energy system.” Other measures included the need for a seamless, multi-state energy market and the upgrading of transmission lines. “These five steps, if instituted by utilities and state and federal agencies, would go a long way towards ensuring that New York’s lights stay on and power prices are reasonable and stable,” says Donohue.

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