RTW: New York power generators up against a stacked deck
I have written U.S. Rep. Tom Reed about a very serious problem with New York state power markets. Due to the New York Independent System Operator’s (NYISO) unfair market policy, we now find the Western and Central New York electric generators that use natural gas as their fuel source in financial peril.
We have already witnessed the planned closure of the NRG Dunkirk facility and soon the NRG Huntley facility will follow. The news outlets report that this is happening due to cheap natural gas, but this is not the whole story. The NYISO and New York state’s tax policy are pushing in-state energy generation outside of the New York city area to the point of extinction.
With the introduction of cheap, clean and abundant natural gas into New York from the Marcellus Shale, one would think natural gas generation would be the primary, schedulable source of power generation in the state. But that is not the case. The NYISO likes to show a neat little pie chart with percentages of each generation that powers the grid every day. What it doesn’t show is how much of the pie chart comes from outside New York state.
The NYISO allows the import of as much power as possible via bilateral contracts outside the state. Much of this power is brought in from Pennsylvania and Ontario, which do not have to pay into the Regional Greenhouse Gas Initiative (RGGI). This creates an unfair advantage for non-RGGI generators. This fact, coupled with constant meddling in the power markets by Gov. Andrew Cuomo’s administration, has made the New York power markets an absolute mess.
Special, under-the-table deals done with the state’s nuclear facilities, as well as a political appeasement deal with NRG Dunkirk, have made doing business as an in-state generator virtually impossible.
National Grid has not helped the in-state generators, either. It built a huge substation in Humphrey under the guise of grid improvements to solve a low voltage problem, only to hook it to a large transmission line that brings in power from Homer City, Pa. At rate-payer expense, National Grid built the Humphrey substation far bigger than what was needed for the primary reason of obsoleting in-state generation.
So now we have put our own coal-fired generation plants out of business within New York state, only to hook our grid into a mega-coal plant in Pennsylvania (also run by NRG).