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N.Y. Power Authority President & CEO Gil C. Quiniones Highlights New York State's Efforts to Strengthen Electric Power System in Speech at Power Security Conference in Washington, D.C.

 

Contact:
Michael Saltzman
914-390-8181
Michael.Saltzman@nypa.gov

March 4, 2014


FOR IMMEDIATE RELEASE

New York Power Authority (NYPA) President and CEO Gil C. Quiniones spoke Tuesday at the EnergyBiz Securing Power Forum on measures being undertaken by New York State to improve the resilience of its electric power system in the face of extreme weather events and cyber security threats and to modernize and harden generation and transmission infrastructure for meeting the challenges of a 21st century economy.

The following is the text of Mr. Quiniones’ remarks, as delivered at the Mandarin Oriental Hotel in Washington, D.C. He was introduced by Martin Rosenberg, editor-in-chief of EnergyBiz Magazine.

Thank you, Marty, and good afternoon. I’m particularly pleased to be here—for a couple of reasons.

The first is the obvious importance of this conference in light of the extraordinary physical and cyber threats facing our power systems. Beyond that—with the wild weather we’ve endured this winter up and down the Eastern Seaboard and elsewhere—there was no guarantee this event would actually get off on schedule before the spring thaw. So I’m glad it did—and that we all could make it.

Weather, of course, is at the heart of much of what we’re discussing here. In case you were wondering, my state—New York—has had nine federally-declared weather-related disasters since 2011.

We’re now getting rocked by 100-year storms—or 500-year storms—every two or three years.

All of this has dramatically demonstrated the need to rebuild, to harden and to radically revamp our systems. And while addressing that need, we must also combat the equally grim reality of growing cyber security threats on an international scale.

I’d like to talk to you today about some of what New York State and my utility—the New York Power Authority—are doing to mitigate the effects of extreme weather events, to address cyber threats to the grid and to reimagine—and create—the power supply system of the future—with attributes such as microgrids and distributed generation and Smart Grid technologies. I use the word “reimagine” advisedly because Governor Andrew Cuomo—joined by Vice President Biden—recently unveiled a $17 billion initiative—“Reimagining New York for a New Reality” —to better enable the state’s energy systems and other critical infrastructure to withstand future storms and other disasters.

Probably the best time to begin my discussion is in the late summer of 2011—when two Tropical Storms—Irene and, then, Lee—hit with full fury in Central New York. Irene devastated the area of the Power Authority’s 1,100-megawatt Blenheim-Gilboa Pumped Storage Power Project, and both storms threatened that facility and one of our small hydroelectric projects downstream.

Thanks to aggressive emergency actions by our staff, both plants escaped significant damage. But—I can tell you—it wasn’t easy. Never before had the Power Authority declared a Type B emergency—notification that a potentially hazardous situation is developing—under Federal Energy Regulatory Commission guidelines. With Irene, we did it twice.

We also encountered a number of communications problems during the storms. In response, we developed 26 recommendations for strengthening emergency communications in the project areas and presented our findings in a “Lessons Learned” report.

We didn’t know it at the time—but Irene and Lee were a prelude to what was to come almost exactly 14 months later in the form of Superstorm Sandy. This time, the brunt of the storm within New York State was felt in the heavily populated downstate region—in the New York City area, including Long Island.

Shortly after Sandy hit, I headed for Long Island at Governor Cuomo’s direction and spent much of the next two weeks there, working principally to coordinate communications between the state and the local utilities and to bring in line workers and tree trimmers from throughout the country and Canada to aid in the recovery.

About 90 percent of the Island’s customers were without power at some point—many for extended periods. So I saw firsthand the striking effects—economic, physical, emotional—of a massive outage. And, along with some truly heroic efforts, I saw the problems—chiefly of workforce deployment, of gasoline supply, of communications –that hampered the restoration of service and further fueled customer frustration and rage.

Within a little more than two weeks, Governor Cuomo established four commissions to address these and the many other issues that arose in the wake of the storm.

One panel was assigned to propose ways to ensure that critical systems—such as power, health care and transportation—would be better prepared for natural disasters and other emergencies. A second was asked to recommend actions to strengthen the response to such events. Another—of which I was a member—was to focus on bolstering the resilience and strength of the state’s infrastructure. And the final commission was assigned to examine the storm-related performance of the state’s power utilities—as well as means of streamlining the sometimes overlapping functions of state agencies and authorities dealing with energy.

Commission members included current and former officials from the utility industry, all levels of government, the academic world, the environmental community and just about every other area with relevant expertise. They provided a wealth of recommendations—many of which have been implemented or are moving ahead.

As one major example, legislation enacted last year transferred nearly all responsibilities of the Long Island Power Authority—the state-owned utility that serves the Island—to a unit of PSEG of New Jersey. PSEG had been scheduled to take over operation of the Long Island power system, but its duties—including storm response—now go well beyond that. In addition, the state Public Service Commission’s oversight of utility operations on the Island has been significantly strengthened.

The PSC’s oversight and enforcement capabilities with respect to the state’s investor-owned electric and gas utilities have been expanded as well. And just last month—as part of a Con Edison rate case—the commission approved that utility’s four-year, $1 billion plan to strengthen its electric, gas and steam systems. Also in line with the new rate plan, Con Edison—which serves most of New York City and neighboring Westchester County—will study the technical and financial feasibility of installing microgrids and will expand its efforts to replace leak-prone gas pipes—including those in flood zones.

I should note here that my panel—the NYS 2100 Commission—called for various measures to strengthen energy infrastructure—such as selectively undergrounding critical electric transmission and distribution lines—and for expanded reliance on microgrids, clean distributed generation, Smart Grid technologies and energy efficiency.

We’re seeing progress on each of these fronts. And the efforts to promote microgrids and distributed generation got a big boost early this year when Governor Cuomo announced the NY Prize competition to build community grids and microgrids in areas with about 40,000 residents each.

A total of $40 million will be awarded for the winning proposals—with the New York State Energy Research and Development Authority, supported by the Power Authority, handling the process. The goal is to develop at least 10 community grids and microgrids statewide this year—with all featuring clean distributed generation.

In the same vein, the Power Authority is helping to install a 15-megawatt gas-fueled cogeneration plant at the Rikers Island correctional facility in New York City. This project—which incorporates strengthened resilience standards—will be connected in parallel with the grid, which will provide backup power as needed. It’s scheduled for completion by this fall and will be part of our broader initiative to promote distributed generation and microgrid development at our customer locations throughout the state.

While I’m focusing today on state initiatives, I also want to underscore the importance of the federal government in storm preparation and response.

This was emphasized for me last May, when I was among a group of utility and trade association officials who met with President Obama and members of his energy team here in Washington to discuss lessons learned in the response to Sandy, as well as planning for potential future storms. And we’ve seen numerous examples of the critical federal role in New York and other states. To cite just one recent one, Governor Cuomo last month announced an agreement with the Federal Emergency Management Agency calling for $1.4 billion in federal funds for repairs to the storm-damaged utility grid on Long Island and for help in lessening the effects of future disasters. That’s a huge breakthrough, enabling the state to move ahead with vital actions without impacting ratepayers.

The federal government also plays a critical role in New York’s extensive efforts to combat cybersecurity threats to our power system. We rely on the Department of Homeland Security and other federal agencies for reports, warnings and assessments, and general guidance.

At the state level, the Governor has established a Cyber Security Advisory Board that includes leading authorities in the field. In addition, the state has entered into a partnership with the Center for Internet Security, a nationally recognized non-profit entity that helps government and private businesses prepare for and respond to cyber attacks. And the Power Authority recently began a separate partnership with the Center to augment our cyber security program.

Ironically, while our industry’s reliance on the Internet to link its critical operating systems—and the growing use of Smart Grid technologies—provide immense advantages, they have also, in some ways, increased our vulnerability to cyber threats. It’s therefore clear that we must become still more vigilant in our preparations and further strengthen our response capabilities while at the same time embracing and refining advanced new technologies.

This past Friday, the Bipartisan Policy Center—a respected think tank here in town—issued a timely report titled “Cybersecurity and the North American Electric Grid: New Policy Approaches to Address an Evolving Threat.” Among other proposals, the report calls for establishment of an industry-led organization—modeled on INPO, the Institute of Nuclear Power Operations—that would develop cybersecurity performance criteria and best practices for the entire power sector. These could be a valuable complement to the current North American Electric Reliability Corporation standards. At the very least, an idea worth considering.

Meanwhile—back in New York—as we address the cyber and physical threats to our energy infrastructure, we’re relying heavily on a document known as the Energy Highway Blueprint. A little background on this major initiative:

Just over two years ago, Governor Cuomo launched his Energy Highway program. The goal was—and is—to rebuild and modernize the state’s electric power system to meet the demands of a 21st-century economy and society for decades to come.

We’re carrying out an unprecedented partnership between the state and the private sector that’s expected to lead to about $5.7 billion in investment within the next 10 years and as much as 3,200 megawatts of new generation and transmission capacity. Almost a third of the new generation will come from renewable or repowered sources.

I was privileged to serve as co-chairman of a five-member Task Force that the Governor named to oversee planning for the Energy Highway and solicit proposals for potential projects and policies. We ultimately developed 13 action items in four major categories covering new construction, improvements to existing facilities, clean energy and technology innovation. All the actions are moving forward with the Governor’s approval.

To be clear, the Energy Highway isn’t intended only—or even principally—to lessen the impact of storms or cyber attacks or to enhance our ability to recover from them. But by greatly strengthening the system’s resilience, cutting greenhouse gas emissions and paving the way to still more advanced Smart Grid features, it will contribute significantly to these goals.

To advance the Blueprint’s call for new construction, the PSC is conducting a first-of-its- kind consolidated proceeding on applications to install 1,000 megawatts of alternating current transmission capacity between upstate and downstate New York. As proposed by Governor Cuomo in this year’s State-of-the-State speech, the Commission acted recently to establish a 10-month expedited review process for projects that can be built entirely within existing rights-of-way and to accommodate new or modified projects that will make greater use of such areas. These critical initiatives are being carried out under the leadership of PSC Chair Audrey Zibelman, who will talk to us later today.

As for upgrading existing facilities, I’m pleased to report that the Power Authority is implementing the initial projects in a multi-year $726 million life extension and modernization program for our statewide transmission system—which accounts for about one-third of New York’s high-voltage transmission.

Independent of the Energy Highway—but certainly in line with its objectives—the state is making rapid strides in promoting clean energy, most notably on-site solar photovoltaic generation. This progress should intensify with the startup of our $1 billion Green Bank to attract private financing for clean-energy projects.

And we continue to promote Smart Grid technologies. The state thus far has provided $24 million in awards for research, product development and demonstration projects under its Smart Grid program—resulting in an additional $90 million in private-sector and federal funding.

New York is also vigorously pursuing energy efficiency initiatives. The Power Authority, for example, is administering a program to reduce energy use in state government facilities by 20 percent by 2020.

The path to a cleaner, more resilient energy system is also set out in our draft 2014 State Energy Plan—issued in January by the state Energy Planning Board and now the subject of public comment.

The draft plan brings a new emphasis to the potential for individual customers and communities to control their own energy use in an integrated system that includes microgrids, distributed generation, energy storage and other options in addition to the central station power plants and transmission and distribution lines that are most vulnerable to storms and cyber attacks.

The document encompasses five major focus areas—one of which sets the explicit goal of “providing a more resilient and flexible power grid.” Each of the others bears at least indirectly on that priority.

Inevitably, the various efforts—in New York and other states—to design and create a reimagined power system have sparked concerns.

It’s said that the coming of microgrids and distributed generation will adversely impact utilities’ distribution systems and revenues. That if customers leave the grid, others—those least able to afford it—will be left behind to bear the costs of maintaining the system. That the new technologies could disrupt the current restructured wholesale energy markets and that these technologies cannot be integrated into the system without affecting the central-station power plant model.

We must aggressively address and resolve such concerns –and the regulatory, market, financial and operational issues arising from them. As Dr. Mike Howard, EPRI’s president and CEO, told us a little earlier, the organization is doing some very important work on these matters. And in case you haven’t seen it, I highly recommend its paper on “The Integrated Grid--Realizing the Full Value of Central and Distributed Energy Resources.”

The truly integrated system that we envision will maintain the essential role of restructured wholesale markets and of traditional power plants and transmission and distribution lines. But there can be no doubt that it also must accommodate the innovative technologies and approaches that offer such promise for the future.

Even if there had never been a Sandy—or an Irene or a Lee—we would have been compelled to replace key elements of the power system simply because of their age. But now we have a singular opportunity not merely to replace what exists, but to reimagine—and build—a stronger, smarter and more resilient grid.

Our states—and our industry—must answer this call and meet this challenge. I firmly believe that we will.

Thank you.

 

About NYPA:

■The New York Power Authority uses no tax money or state credit. It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity. ■ NYPA has been designated as the lead entity via Executive Order 88 by Gov. Andrew M. Cuomo to form a central management and implementation plan to carry out his Build Smart NY plan to reduce energy use by state facilities by 20 percent by 2020.■ NYPA is the nation's largest state public power organization, through the operation of its 16 generating facilities in various parts of New York State, participation in a unique public/private partnership to contract for power from a clean generating plant in Queens, and its operation of more than 1,400 circuit-miles of transmission lines. ■ More than 70 percent of the electricity NYPA produces is clean renewable hydropower. Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state.■For more information visit www.nypa.gov or follow us on Twitter @NYPAenergy, Facebook, Instagram, Wordpress, and LinkedIn.