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Doug Lutzy NYS Department of Public Service

Electricity Restructuring Roundtable (89) New York’s DG/CHP Experience To Date Challenges & Opportunities. Doug Lutzy NYS Department of Public Service. June 17, 2005. Basics of the New York Electric System. 6 Major Investor-Owned Utilities 2 Large Power Authorities

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Doug Lutzy NYS Department of Public Service

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  1. Electricity Restructuring Roundtable (89)New York’s DG/CHP Experience To Date Challenges & Opportunities Doug Lutzy NYS Department of Public Service June 17, 2005

  2. Basics of the New York Electric System • 6 Major Investor-Owned Utilities • 2 Large Power Authorities • 47 Small Municipalities • 4 Small Rural Electric Co-ops • Diverse territory • 47,000 square miles • Con Edison/NYC, 600 square miles, 3.1 million customers • Adirondack Park, 3900 sq mi, less than 100,000 customers • Load: 32,000 MW at peak -- 16,500 MW in NYC & Long Island • Extreme electric transmission congestion downstate • Generating capacity: 39,000 MW

  3. DG - Rules of Grid Interconnection • New York has standard interconnection requirements • 2 MW and under • Includes networks • Model contract language • Defines process/deadlines • Con Edison to use NY SIR timing requirements for units up to 5 MW • Development of rules a collaboration • Utilities implement rules • PSC enforces rules and resolves conflicts • Guidelines for connection charges vary • Small units - no fee • Larger units -- cost reimbursement • Connection is governed by utility • Safety

  4. DG - Rules of Grid Interconnection • Engineering reviews of system characteristics for DG units • units under 15kVa using certified equipment get minimal review • Net Metering allowed • Residential PV up to 10 kw • Farm waste up to 400 kw • Wind – Residential up to 25 kw • Farms up to 125 kw • Final rules still pending • NY active in efforts by FERC and others to develop National Interconnection Standards

  5. Standby Rates • Basic provisions of Standby Rates • Monthly customer and contract demand charges reflecting costs associated with service and customers maximum annual demand for access to the delivery grid • as-used on-peak daily demand billing element reflects incremental delivery costs associated with on-peak deliveries for all interval metered customers (> 50 kW) • produces stronger price signal to run OSG/DG and displace more expensive utility on-peak deliveries • increases delivered on-peak grid commodity (energy) prices • Standby Rates Option • Hourly load-integrated market commodity prices available for all interval metered (> 50 kW) standby customers • commodity service bill directly reflects cost consequences of customer’s individual behavior (not class average) • OSG/DG have better information upon which to choose between buying energy from the grid or generating themselves

  6. Standby Rates • Existing Units • immediate billing @ full standby rate OR • phase-in to full standby rate (fixed 8 year period) • initial 4 years at standard rates • 2nd 4 years at equal % increase • Exempt Technologies • Fuel cells, wind, solar thermal, PV, sustainably-managed biomass, geothermal, methane waste, and small (=/< 1 MW) efficient CHP • Options • immediate billing @ standard delivery rates OR • may choose immediate billing @ full standby rates • Need to commence operation between July 29, 2003 and May 31, 2006

  7. CHP Incentive/Development Programs • NYSERDA Funding, primarily via SBC • Demonstration projects, studies, and technology development • Project commitments to date • 84.6 MW -- 12.6 MW operational • $43 million in funding, • $160 million committed by developers • Standby Rate CHP Exemption • =/< 1 MW, serving no more than 100% of customer’s maximum potential demand • 60% overall annual efficiency • thermal loads utilize at least 20% of CHP total usable annual energy output

  8. Emergency Demand Response (EDRP) • Voluntary load curtailment program activated by the NYISO during periods of potential shortfall in electricity supply. • Incentive based, no penalties. • Current registration over 1100 customers, representing nearly 600 MW of load-- about 250 MW from emergency generators.

  9. Emergency Demand Response (EDRP) (cont’d) • Environmental concerns for generating units in EDRP programs. • NY DEC ‘s proposal is for exempting allexisting DG resources until 2008, providing these units with a 3-yr pass on emissions limits, and setting standards for all existing engines to achieve in 2008 (i.e., 27 lb/MWh NOx limit). • New Emergency Diesel non-EDRP Generators installed after 2005 face 16 lb/ MWh NOx limit. After 2010 a 6 lb/MWh NOx limit. • New Emergency Diesel Generators opting into EDRP after 2005 face 1.6 lb/MWh NOx limit. (This provision currently under debate) • Proposed rule implementation recently delayed from 2005 to 2006.

  10. Installed Capacity-Special Case Resources(ICAP-SCR) • Pays customers to provide load reduction capability during a contractual period. Program is called when system reserve shortfall expected. • Current registration over 1050 customers, representing nearly 800 MW of load-- about 27 MW from generation.

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