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<http://secure.scientech.com/images/spacer.gif<;=09 <http://secure.scient=
ech.com/images/spacer.gif<=09 <http://secure.scientech.com/_IA_TEST/Corner_TL.jpg<=09 <http://secure.s= cientech.com/images/spacer.gif<=09 <http://secure.scientech.com/_IA_TEST/C= orner_TR.jpg<=09 =09 <http://secure.scientech.com/rci/wsimages/ia_banner02.gif<=09=09 <http://secure.scientech.com/_IA_TEST/Corner_BL.jpg<=09=09 <http://secur= e.scientech.com/_IA_TEST/Corner_BR.jpg<=09 <http://secure.scientech.com/images/spacer.gif<;=09 <http://secure.sciente= ch.com/specialpages/Multi_Client.asp< <http://secure.scientech.com/images/spacer.gif<;=09 <http://secure.scient= ech.com/images/spacer.gif<=09 =09 <http://secure.scientech.com/rci/wsimages/will100border_copy.jpg< <http://secure.scientech.com/_IA_TEST/Corner_TL.jpg<=09=09 <http://secur= e.scientech.com/_IA_TEST/Corner_TR.jpg<=09 =09 <http://secure.scientech.com/images/spacer.gif<; <http://www.thestructu= regroup.com< <http://secure.scientech.com/images/spacer.gif<; <http://secure.scientech.= com/specialpages/Strategic_Planning.asp< <http://secure.scientech.com/ima= ges/spacer.gif< <http://secure.scientech.com/rci/details.asp?ProductID=3D90= 9< <http://secure.scientech.com/images/spacer.gif<;=09 <http://secure.scientech.com/_IA_TEST/Corner_BL.jpg<=09=09 <http://secur= e.scientech.com/_IA_TEST/Corner_BR.jpg<=09 November 26, 2001=20 New Power Plant Planned for New York City By Will McNamara Director, Electric Industry Analysis [News item from Energy Info Source] New York state's siting board approved = Astoria Energy's plans to build a 1,000-megawatt power plant in New York Ci= ty, clearing the way for construction to begin as early as January. Astoria= Energy hopes to have the natural-gas-fired, combined-cycle plant that will= be at an existing oil terminal in the Astoria section of Queens in service= by 2004. The company must do a certain amount of demolition and site prepa= ration before it can begin construction, and still must receive some local = permits from New York City. Astoria Energy is a unit of SCS Energy LLC, a p= rivately owned energy development company based in Concord, Mass.=20 Analysis: The announcement of a new power plant scheduled for the New York = City area should be evaluated within the context of severe power supply pro= blems that have been identified within this region. Like California, New Yo= rk also suffers from a supply / demand imbalance. However, even if or when = power supply can be increased in New York, the core load center of New York= City still suffers from inherent transmission deficiencies that continue t= o take their own toll on the stability of the market. In other words, trans= mission capacity in the region has been determined to be deficient to the e= xtent that power outside of the city cannot be reliably imported. The fact = that Astoria Energy has received approval from New York state's siting boar= d to proceed with this New York City-based plant is significant, but it sho= uld not be forgotten that the company also must receive local permits from = city government. This could be easier said than done, as other planned powe= r plants in the area have been blocked or significantly altered over the la= st year by community groups in New York City and surrounding boroughs who a= rdently voice concerns about environmental and other ramifications of new p= lant construction.=20 The problems within the New York power market have been well documented. Th= e state of New York reportedly has not brought a new plant online since 199= 6, when a 200-MW plant opened in Brooklyn. It has been almost seven years s= ince a 1,000-MW unit in Oswego, N.Y., marked the last plant to open upstate= . Further, New York expects only a 3.5-percent increase in new capacity in = the next three to four years. Consequently, concerns about the state's abil= ity to meet increasing demand for power have gained momentum. Pressure has = been placed on New York regulators to expedite the approval steps for sitin= g new plants in the state. However, at the same time, environmental and com= munity groups closely guard the proposals for new plants and often lobby fo= r limitations on how and where the new plant will produce power.=20 While the entire state of New York is subject to shortages, the problem app= ears to be particularly acute in New York City. A November 2000 report issu= ed by the Federal Energy Regulatory Commission (FERC) entitled "Investigati= on of Bulk Power Markets, Northeast Region," highlighted specific capacity = problems in the New York City/Long Island community of 11 million people. T= hese areas are particularly vulnerable because they are isolated from most = of the state's grid, the study said. Like Northern California, which suffer= ed rolling blackouts due to transmission constraints, New York City and Lon= g Island can only import limited quantities of power on constrained transmi= ssion lines. Hydro and fossil resources are plentiful in upstate New York, = but cannot reach the city. Being both densely populated and heavily residen= tial, it is difficult to site new power plants in the area. Consequently, 8= 0 percent of the power that the city consumes is generated by the city. New= plants such as the one by Astoria Energy are being proposed because New Yo= rk City reportedly will be short of its generating capacity needs at times = during the course of 2002. The projected shortfall is expected to increase = by another 200 MW by summer 2002.=20 Increased demand is causing additional problems for the energy markets of N= ew York City and New York State. Demand in the state rose by 2,700 MW from = 1995 to 2000, or 2.5 times as fast as new generation capacity was added. De= mand over the course of 2001 was expected to reach 31,100 MW, or about 3.7 = percent above regulators' earlier forecasts.=20 It is within this market context that Astoria Energy will proceed with its = plans for the new power plant in New York City. Astoria Energy is a private= company seeking to generate electric power with energy-efficient and envir= onmentally sound technologies in the New York City area. The company is a s= ubsidiary of SCS Energy, a privately owned energy development company forme= d in 1998 for the purpose of developing and owning new electric generating = facilities. Information obtained from Astoria Energy sheds some additional = light on the proposed plant. As noted, the 1,000-MW unit will be a natural = gas-fired facility, which will obtain natural gas supplied from the ConEd/N= ew York facility pipeline. The capital cost for the plant reportedly will b= e $600 million. Commercial operation, pending the necessary approvals on th= e local level, is scheduled for the fourth quarter of 2003. Astoria Energy = is seemingly confident of its chances to gain approval for the new plant be= cause it will be using a technology that is specifically geared toward the = reduction of air emissions.=20 However, despite this optimism, the community opposition factor should not = be discounted, and there are several examples that may foreshadow the oppos= ition that Astoria Energy could face. Take Sithe Energies, for example, whi= ch hit a roadblock with its construction plans in the New York area earlier= this year. Sithe Energies originally planned a 827-MW combined-cycle facil= ity fueled by natural gas in Ramapo, N.Y. Chief among the concerns of local= residents is that the Ramapo plant was originally planned to run all the t= ime to meet demand, and as a result would use local water resources for coo= ling purposes. Community resistance thus became an issue for the company, w= hich altered its plans and began to consider a 510-MW peaking unit (also po= wered by natural gas) that would only be operated in times of increased dem= and.=20 As another example, environmental and community groups won a victory in cou= rt just last week that essentially will block construction of small power p= lants in the South Bronx, Brooklyn, Queens, and Long Island areas. Each is = a 44-MW plant, though at some sites there are twin generators operating at = less than 80 MW. A coalition of the groups had opposed the construction of = various plants in these areas and sued the New York Power Authority, claimi= ng (among other things) that the state had failed to perform adequate envir= onmental-review studies. The groups claim that the state should test the pl= ants for their output of fine particulate matter. A lower court had ruled i= n favor of the state, but a judgment last week in the New York Court of App= eals was clearly a win for the environmental and community groups. The new = ruling, which reportedly cannot be appealed further, says that the state mu= st do unprecedented air tests at the 10 plants or shut them down by Jan. 31= .=20 In a report issued earlier this year, New York State Electric & Gas Corp. (= NYSEG), one of New York's seven utilities, said the state will not have eno= ugh megawatts to support a truly competitive wholesale electric market unti= l 2008. NYSEG, in a report issued late Wednesday, warned there are "serious= problems with (New York's) generation supply and a lack of transmission an= d pipeline infrastructure." According to data included in a separate report= by the New York ISO, which manages the state's transmission grid, between = 1995 and 2000, while statewide demand in New York rose by 2,700 MW, generat= ing capacity under contract in the state reportedly increased only by 1,060= MW.=20 Consequently, given all of these factors, power supplies in New York remain= ed strained and the area certainly could benefit from the construction of n= ew generation capacity. However, Astoria Energy, which seeks to bring new g= eneration online in New York that will be based on clean technologies, may = still face an uphill battle from various groups that seemingly oppose the c= onstruction of any new plants in the region (with the exception of peaker u= nits, whose output would be closely regimented). If plans for this plant ar= e blocked or significantly altered, following the experience of Sithe Energ= ies, the options to resolve New York City's supply / demand imbalance will = once again become focused on a combination of other approaches, including c= onservation efforts and reliance on distributed generation alternatives.=20 An archive list of previous IssueAlert articles is available at www.scientech.com <http://secure.scientech.com/issuealert/<;=20 _____ =20 We encourage our readers to contact us with their comments. We look forward= to hearing from you. Nancy Spring <mailto:nspring@scientech.com< Reach thousands of utility analysts and decision makers every day. Your com= pany can schedule a sponsorship of IssueAlert by contacting Jane Pelz <mai= lto:jpelz@scientech.com<at 505.244.7650. Advertising opportunities are also= available on our Website.=20 _____ =20 Our staff is comprised of leading energy experts with diverse backgrounds i= n utility generation, transmission and distribution, retail markets, new te= chnologies, I/T, renewable energy, regulatory affairs, community relations = and international issues. Contact consulting@scientech.com <http://consulti= ng@scientech.com< or call Nancy Spring at 505.244.7613.=20 _____ =20 SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let u= s know if we can help you with in-depth analyses or any other SCIENTECH inf= ormation products. If you would like to refer colleagues to receive our fre= e, daily IssueAlert articles, please register directly on our site at secur= e.scientech.com/issuealert <http://secure.scientech.com/issuealert/<;.=20 If you no longer wish to receive this daily e-mail, and you are currently a= registered subscriber to IssueAlert via SCIENTECH's website, please visit = <http://secure.scientech.com/account/<; to unsubscribe. Otherwise, please se= nd an e-mail to IssueAlert <mailto:IssueAlert@scientech.com<, with "Delete = IA Subscription" in the subject line.=20 _____ =20 SCIENTECH's IssueAlert(SM) articles are compiled based on the independent a= nalysis of SCIENTECH consultants. The opinions expressed in SCIENTECH's Iss= ueAlerts are not intended to predict financial performance of companies dis= cussed, or to be the basis for investment decisions of any kind. SCIENTECH'= s sole purpose in publishing its IssueAlert articles is to offer an indepen= dent perspective regarding the key events occurring in the energy industry,= based on its long-standing reputation as an expert on energy issues.=20 Copyright 2001. SCIENTECH, Inc. All rights reserved. <http://infostore.consultrci.com/spacerdot.gif?IssueAlert=3D11/26/2001<;
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