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New York power transmission project could ease congestion, lower prices

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New York power transmission project could ease congestion, lower prices

Highlights

Congestion, prices could increase during construction

Upgrade needed to help meet state-level clean energy goals

Houston — New York regulators have approved rebuilding the 86-mile-long Moses-Adirondack transmission line which could decrease power prices by reducing congestion and increasing the flow of hydropower from the state's northern region to the rest of New York.

"Generally, Zone E (the terminus of Moses - Adirondack) power prices have settled at a premium (on average) to Zone D (the origin of the line), averaging over $6/MWh around-the-clock in 2018," Kieran Kemmerer, power market analyst with S&P Global Platts Analytics, said Tuesday.

Upgrading the voltage from 230 kV to 345 kV as proposed in Phase II will allow for further energy transfer, facilitating more hydropower generation to serve load downstate and putting downward pressure on Zone E power prices, Kemmerer said.

However, Phase II of the project has yet to be approved and Phase I (which involves operating the upgraded lines at the existing 230 kV voltage) is scheduled to be complete in June 2023, he said.

State-owned New York Power Authority, which owns the transmission line, and other state agencies note in the joint project proposal that depending on system conditions when the transmission lines are out of service, there may be congestion on the other transmission lines along this corridor causing an increase in power prices and that congestion may also cause generation to be bottlenecked.

Kemmerer also noted this dynamic, saying that any outages on the line corresponding to this upgrade will result in significant congestion on the existing transmission system in Northeast New York.

"Thus while ultimately this upgrade will ease congestion, the Zone D - Zone E spread will likely be in place for several years until Phase II is complete," he said.

DETAILS AND COST

The lines are currently needed and will be needed in the future to transmit power generated by hydroelectric, renewable and fossil fuel facilities in Canada and Upstate New York, according to the Public Service Commission's November 14 order approving the project.

The facilities proposed to be rebuilt are more than 76 years old, well past their design lives, according to the order. The plan includes the removal of old wooden H-frame structures and rebuilding them with modern steel monopole structures, according NYPA.

Rebuilding the lines with an increased capacity would provide for future expansion to meet New York's Clean Energy Standard, which will require substantial investment in incremental renewable generation and associated transmission capacity in Northern New York, the PSC said.

The Project cannot operate at 345 kV until National Grid upgrades its Adirondack to Porter Line from its current 230 kV capacity, but "prudent planning requires that provision be made for a cost-effective response to reasonably anticipated growth in load, such as the growth in load that will result from the Clean Energy Standard," according to the joint proposal.

The estimated project cost in 2018 dollars is $668.7 million, assuming that Phase I begins construction in January 2020 and is completed in 2023. Phase II will be coordinated with the upgrade of National Grid's Adirondack to Porter 230 kV line to 345 kV, according to the proposal.

The transmission lines run from the St. Lawrence Power Project's Robert Moses Power Dam Switchyard in the Town of Massena, St. Lawrence County, to the Adirondack Substation in the Town of Croghan, Lewis County.

"We commend NYPA for advancing this critical transmission project which will ensure reliable service throughout New York State," PSC chair John Rhodes, said in a statement.

"These new and improved lines will help transmit power generated by clean hydro and renewable facilities in Canada and Upstate New York," Rhodes said. "They will also support future expansion to meet the clean energy goals in Governor Cuomo's ambitious Green New Deal."

-- Jared Anderson, jared.anderson@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com