When Will Kathy Hochul Be Forced to Step Up and Do What's Needed to Support New York's Grid and Avoid Blackouts?

Guest Post by Roger Caiazza of Pragmatic Environmentalist of New York.

It has been a while since I have written about New York Independent System Operator (NYISO) reliability planning process documents.  This post summarizes the section describing regulatory policies affecting reliability in the draft October 2024 draft Reliability Needs Assessment (RNA).

NYISO Reliability Planning

The NYISO reliability planning process consists of two analyses: the Reliability Needs Assessment (RNA) and Comprehensive Reliability Plan (CRP). The RNA evaluates the adequacy and security of the bulk power transmission facilities over a ten-year planning period, the resources in megawatts (MW), and the locations where required to meet projected needs.  If necessary, the NYISO will request solutions for identified needs.  The CRP determines if the proposed solutions are viable and sufficient then documents the solutions meet the identified reliability needs. 

As part of this continuous process the NYISO has released a “draft for discussion purposes only” of the 2024 RNA on October 4, 2024.  The Regulatory Policies Affecting Reliability section caught my attention, so I wrote this article.

Regulatory Policies Affecting Reliability

A common theme in this blog is the risks to reliable electricity posed by political machinations.  Although the NYISO is technically an independent organization there is tremendous political pressure for the organization to comport with the politically driven narrative of the Hochul Administration.  The section discussing regulatory policies is carefully written so as not to offend the politicians:

Increasingly ambitious environmental and energy policies, evolving market rules, technological advancements, and economic factors impact the decisions by market participants and are accelerating the transition in the state’s resource supply mix. During this transition, the pace of both the addition of new resource additions and the retirement of older, higher-emitting resources are projected to exceed historical levels. Changes to demand patterns and the generation fleet driven by federal, state, and local government regulatory programs may impact the operation and reliability of New York’s bulk power system.

“May impact” operation and reliability is a massive understatement.  Consider the following:

Compliance with federal and state regulatory initiatives and environmental and permitting requirements may require investment by the owners of New York’s existing thermal power plants in order to continue operation. If the owners of those plants must make significant investments to comply, the increased cost to continue operating could lead to the retirement of these resources needed to maintain the reliability of New York’s bulk power system and, therefore, could necessitate replacement.

The document lists eight public policy initiatives that could require investment.  One of the initiatives is the “Peaker Rule:” that targets Nitrogen Oxide (NOx) emission limits for simple cycle and regenerative combustion turbines that provides an example of the challenges.  This initiative should be a model for New York energy policy.  The rule was needed for the state to comply with EPA requirements to reduce NOx to help reduce ozone concentrations. 

On the other hand, the simple cycle “peaker” turbines fulfill a critical reliability function.  Recognizing this tradeoff the NY Department of Environmental Conservation (DEC), the generating companies, and NYISO worked out a plan to ensure that the facilities would eventually retire or install control equipment to reduce emissions on a proscribed schedule. 

The non-regulated owners of the facilities all determined that the market would not support control equipment investment and submitted plans to retire.  The NYISO determined that temporarily retaining the peaker generators on the Gowanus 2 & 3 and Narrows 1 & 2 barges is necessary to address a reliability requirement, but the others have retired.

Another of the initiatives, “New York Power Authority (NYPA) Small Gas Power Plant Phase Out” is an example of an inappropriate energy planning initiative.  The document describes it as impacting 517 MW nameplate capacity in New York City and Long Island. It requires a plan to phase out production of electricity from fossil fuels, considering clean replacement resources and impacts on emissions and system reliability.  In particular,

NYPA is required to publish a plan by May 2025 to phase out the production of electricity from its seven small natural gas plants (simple-cycle combustion turbines) in New York City and Long Island by December 31, 2030, unless those plants are determined to be necessary for electric system reliability or emergency power service or energy from other sources that may replace energy from NYPA’s small plants would result in more than a de minimis net increase in emissions within a disadvantaged community.

The peaking power plant issue has become a major point of focus of the environmental justice community and proponents managed to convince politicians to include this legislation in the 2023-2024 enacted state budget.  I described many issues with this bogus problem last February.  

In short, while there is no question that power plants do affect adjacent neighborhoods, their impacts are all less than the National Ambient Air Quality Standards and the contributions from buildings and transportation sectors are more impactful.  In my opinion, that means that they are not as evil as portrayed, 

Furthermore, a DEC Cap and Invest program presentation noted the power plants had negligible emissions relative to total state-wide emissions.  On the other hand, they fulfill a critical reliability need. 

The draft RNA explains that there are challenges for the replacing these resources:

Balancing the grid throughout this transition not only requires maintaining sufficient capacity to meet demand but also requires that new resources entering service comparably replace the capabilities and attributes of the resources leaving the system (e.g., fast starting/ramping and dispatchable both up and down, available when and for as long as needed, providing essential reliability services such as voltage and frequency control, support system’s stability during disturbances). Continued dialogue and engagement among Market Participants, policymakers, and the NYISO will be essential to support the planning processes in order to identify the needs and services required to maintain a reliable system during and after this transition period.

The NYPA Small Gas Power Plant Phase Out regulation affects modern units that have emission rates far lower than the old units affected by the Peaker Rule. The environmental justice advocates have the mistaken impression that they can be replaced by battery energy storage powered by wind and solar resources.  This description lays down a marker. The bottom line is that the only resource that can provide the necessary attributes at this time is a fossil-fired generating unit.  Wind, solar, and battery energy storage cannot replace the capabilities and attributes described.

However, given that there have been multiple attempts to permit new replacement fossil-fired generating units to replace the existing peaker units, do not underestimate political attempts to deny reality.

The DEC has, under considerable political pressure in my opinion, refused to permit any of these proposed resources citing nothing more than the project being inconsistent with the Climate Act.  Consequently, nothing to replace the old resources has been built.

Conclusion

The “Peaker Rule” promulgation and implementation predated the Climate Act.  It was a common sense approach that provided environmental benefits and protected electric system reliability, Since then reliability concerns have been given short shrift and practical reliability solutions have not been permitted. 

The NYPA Small Gas Power Plant Phase Out regulation codifies the irrational New York energy policy approach whereby politicians claim to know better than the electric planner professionals responsible for maintaining a reliable electric system. 

Now, the NYISO must deal with this legislation that is supposed to shut down existing power plants in favor of a magical resource that does everything needed without any environmental impacts in response to a mostly non-existent problem.  At some point the Hochul Administration is going to have to step up and support the resources necessary to keep the lights on.

#Caiazza #RGGI #NewYork #Cllimate #ClimateAct #NYISO #Reliability #Electricity #PeakerPlants #KathyHochul

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  This post represents his opinion alone and not the opinion of his previous employers or any other company with which he has been associated. Roger has followed the Climate Leadership & Community Protection Act (Climate Act) since it was first proposed, submitted comments on the Climate Act implementation plan, and has written over 450 articles about New York’s net-zero transition.