Master Electric Transmission Plan for New York City

This study analyzes the potential for major new transmission projects to expand power imports from neighboring regions.

Overview

When New York State deregulated the power generation market in 2000, the transmission-owning utilities dropped their traditional role planning for inter-regional transmission projects. Policy-makers assumed that market players would step forward to develop economic transmission projects on their own. Since then, it has become clear that transmission developers, facing enormous exposure to market risks, require a guaranteed payment stream that can be provided through a long term contract or regulated cost recovery. Considering this market reality, centralized economic planning for the grid is appropriate to decide which projects benefit consumers the most and should be eligible for guaranteed cost recovery.

In 2008, NYCEDC and its consultant Charles Rivers Associates launched a major new initiative to fill the transmission planning void created by deregulation. The main objective of the study was to identify and analyze potential new transmission projects with the potential to reduce costs to consumers and encourage economic development, and to compare transmission options versus other potential supply- and demand-side alternatives. The study was conducted in coordination with the local electric utilities, state regulatory agencies for New York and New Jersey, and state and regional agencies responsible for managing the power grid.

From a consumer cost perspective, a new, highly efficient in-City power plant was judged superior to the transmission projects analyzed. A new in-City power plant would reduce market prices, create construction jobs, increase tax revenues and reduce environmental emissions by displacing the output of older, less efficient in-City plants. Other projects that would create significant benefits to the region include a proposed transmission upgrade project from Albany to Westchester County, and a proposed transmission cable under the Hudson River from Northern New Jersey to midtown Manhattan. A key finding of the study is that due to a projected surplus of generating capacity for the foreseeable future, decision-makers have adequate time to decide which projects should move forward.

NYCEDC continues to update the study as new transmission projects are proposed. We also actively promote the study’s findings in meetings and industry forums around the state.

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Master Electric Transmission Plan for New York City