nypa board of trustees from - New York Power Authority

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million. The year-to-date lost opportunity cost is $0.51 million compared to generation revenue of $1,350 million. River flows at the Niagara project were below historical averages in July and August, and are forecasted to be well below normal for the next several months due to low precipitation in the Great Lakes Basin that has continued since December 2009. At the St. Lawrence-FDR project, flows were below forecast in July and August and are expected to be below historical averages for the rest of the year. The Flynn Plant was returned to service on August 7. It had been shut down for a maintenance outage 8 on May 7 due to problems with the combustion turbine generator rotor 9 . The event was considered a maintenance outage by the New York Independent System Operator 10 (NYISO) because the unit was removed from service upon approval of the system operator and did not fail while in-service. Siemens and NYPA are currently engaged in extensive technical analysis to determine the root cause of the rotor failure. The estimated revenue impact to NYPA is a loss ranging between $8 million to $9 million, spread over 2011 – 2012. Repair expenses are estimated to be about $3 million, of which $2.3 million will be capital costs. Transmission Performance Transmission reliability 11 in July was 99.44 percent, which was above the target of 98.70 percent, and 98.96 percent in August, which was below the target of 99.81 percent. The year-todate actual reliability is 95.79 percent, below the target of 96.41 percent. Performance has been affected by some outages not anticipated in 2010, several forced outages 12 , and some scheduled outages 13 that have taken longer than expected. There were three forced outages in July for a total of 373 hours. One outage was a significant unplanned transmission event 14 . The Marcy Capacitor Bank #2 was out of service for 370 hours due to catastrophic equipment failure; the cause is yet to be determined but under investigation. The Massena-Utica and Massena-Chateauguay lines were out of service for 1.5 hours each due to circuit breaker failure at Marcy. There were two significant unplanned transmission events in August for a total of 40 hours. The Massena-Utica line was out of service for 25 hours and the Massena-Chateauguay lines was out for 15 hours, both due to line emergencies when a disconnect switch 15 did not close correctly and failed. The switch was repaired and the lines were restored to service. Life Extension and Modernization Programs On September 21, the 13 th of the 16 units at the St. Lawrence-FDR project was returned to service, as part of the project’s Life Extension and Modernization 16 (LEM) program. As reported in the June COO Report, the unit’s original return to service date of July 30 was delayed as the result of conditions not encountered with any of the previous 12 units including deficient original manufacturing of parts that require upgrading as well as other issues. The 2013 scheduled completion date for the LEM project remains unchanged. -2-
Transmission Initiative NYPA is continuing to work with National Grid, Con Edison, and the Long Island Power Authority (LIPA), regarding a proposed transmission line that would deliver power from Canada and upstate renewable energy projects to New York City. In July, PA Consulting briefed senior management at NYPA and National Grid on its draft analysis comparing load-weighted zonal electricity prices, productions costs, generator costs, and emissions in the Base Case and the Transmission Initiative Case. Subsequently, PA prepared sensitivity analyses considering several scenarios including Hudson Transmission Partners’ proposed PJM-NYC line, a range of natural gas prices, and 400 MW of off-shore wind. Results indicated a net benefit in state-wide production costs and a reduction of emissions with the construction of the Transmission Initiative. A presentation of the sensitivity analyses was made to Con Edison and LIPA staff in July. Representatives from Con Edison and LIPA accepted the analyses, and Con Edison agreed to an executive-level meeting between NYPA, National Grid, Con Edison and LIPA to further discuss the Transmission Initiative. The meeting is anticipated for October. SUNY-Canton Project NYPA is working with the State University of New York at Canton (SUNY-Canton) on assessing options to relocate the section of the Moses-Adirondack 17 line on their campus to accommodate athletic fields. In July, NYPA and Commonwealth Associates presented SUNY- Canton an interim report on routing options. Commonwealth Associates was asked to research additional costs of the routing options and prepare a new report, which will be presented to Senior Management with staff recommendations in October. Blenheim-Gilboa Project Relicensing The Trustees will be briefed in September and October on the relicensing process for the Blenheim-Gilboa Pumped Storage Power Project. It is anticipated that by the end of 2010, the Trustees will be requested to authorize the start of this relicensing effort and a capital budget in preparation for relicensing. The Trustees will also be asked to approve an award of a contract for the development and implementation of a comprehensive information management system to support the relicensing effort. The Federal Energy Regulatory Commission 18 (FERC) license for Blenheim-Gilboa expires in April 2019. It is anticipated that, as with the relicensing efforts for the St. Lawrence- FDR and Niagara projects – which required seven to nine years and involved extensive studies as well as significant participation by and negotiation with stakeholders – there will be two phases of work for obtaining a new license for Blenheim-Gilboa. The first phase will involve preparation for relicensing and the second phase will be the formal FERC relicensing process. Preparation for relicensing includes preparing the necessary relicensing documents to begin the formal relicensing process in 2013. -3-
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