From the July 2, 2001 print edition

Viewpoint Capacity is critical to power policy

Dan Walsh

How much electricity-generating capacity will be enough for New York in the next five years?

The Business Council and many of its member companies have been wrestling with that question for months. We did so as we mulled what advice to give the state's Energy Planning Board as it revises the state's Energy Plan.

Our answer: For a prosperous future, free from California-like catastrophes, New York needs at least 10,000 megawatts. Our reasoning is simple: Only by adding this capacity can New York sustain economic growth and foster the robust competition that our energy markets need to drive energy costs down.

From 1980-2000, New York's annual peak demand for electricity grew 5.1 times as much as the population, and 2.1 times as much as the state's employment base. During the same 20-year period, peak demand grew by roughly 1,000 more megawatts than the state added in new generating capacity.

From 1995-2000, demand grew by 2,700 megawatts, but the state added only 293 megawatts of new capacity.

We've shared with the state Energy Board these numbers, our calculations on New York's need for added generating capacity, and some other specific policy recommendations.

Adding generating capacity: In 2000, New York's peak demand was 30,200 megawatts, and our on-line capacity was 35,347 megawatts. But examining our actual energy needs shows that this won't be nearly enough in five years.

The conclusion is striking: As things stand now, we'll be nearly 10,000 megawatts short of the capacity that we need to address these critical issues.

With our needs growing and competition vital, it would be better to err on the safe side -- adding as much as 15,000 megawatts of new capacity within the next five to seven years.

Siting power plants faster: Part of New York's problem is that we site new power plants with a process that is too cumbersome. There are 72 proposals for new or expanded plans already in the pipeline and due to go online by 2005. But we know from experience that few of these plants will be built by 2005 because the state's "fast-track" siting process is anything but.

Upgrading transmission systems: The revised Energy Plan should emphasize the need for specific new electricity transmission projects to move power from areas that have plants to areas where supply is short.

Fuel diversity: The percentage of electricity produced by natural gas-fired plants has increased significantly since 1985. That leaves New Yorkers and New York businesses vulnerable to significant hardships should that natural gas become scarce or expensive.

Daniel Walsh is President and CEO of The Business Council of New York State

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-- Martin Thompson (mthom1927@aol.com), July 03, 2001