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Bottlenecks In State's Transmission System Lead to Formation of New Capacity Zone

Transmission upgrades using existing corridors solves supply-demand imbalance

Transmission Proposal

Project will relieve constraints, benefit local residents and our local economy.

Transmission bottlenecks, which constrain power flows, have historically raised the cost of electricity for all New Yorkers by hundreds of millions of dollars each year. An initiative to relieve the bottlenecks and congestion on New York’s transmission grid by upgrading lines would allow the free flow of electricity (including power generated from renewable resources), and would provide important benefits to state residents, especially Central Hudson customers.

Central Hudson believes the long-term solution in the supply-demand imbalance lies in upgrading the electric transmission lines and is currently working on a proposal, with other New York State utilities, for the New York State Public Service Commission. The NYSPSC is seeking proposals from utility companies and private developers on transmission projects that best address these bottlenecks while providing benefits to residents and businesses. Central Hudson’s and the utility companies’ proposals would largely utilize existing transmission corridors and is projected to create nearly 6,000 direct jobs statewide; annually save up to $376 million in electric costs and generate up to $40 million in property tax revenues for municipalities; facilitate wind generation in New York; and reduce power plant emissions by 227,000 tons. Although several proposals have been introduced by various parties, only one, if any, will be approved in each area by the Public Service Commission.

The process for evaluating each proposal is underway, and more detailed information will be submitted in coming months, with ample opportunity for public comment and community participation.

New Capacity Zone raises prices to encourage downstate generation

Capacity Zone

Federally imposed regulatory change sharply raises costs for individuals and local industry.

In the meantime, the transmission bottleneck issue in New York prompted the Federal Energy Regulatory Commission to establish a new Capacity Zone, implemented in May 2014, for lower New York and the Hudson Valley. The incentive is to attract new power generation to meet shortfalls in the region, however, the Capacity Zone further increases the cost of electricity by up to $350 million per year and raises local electric bills by 6 percent for residents and 10 percent for businesses. These higher prices benefit the existing independent generators at the expense of our customers.

Central Hudson is in active discussions with state and federal regulators, and is pursuing legal options, in an effort to reduce or eliminate the impact of this new Capacity Zone. (See the highlighted box to see a list of filings challenging the Capacity Zone in New York State.)

Filings challenging Capacity Zone in
New York State

» Central Hudson files motion in Federal Court | PSC, too
     U.S. Court of Appeals Order Scheduling Argument

» Central Hudson filed motions to FERC

Requests to FERC to delay or halt capacity zone plan

» Central Hudson

» NYS Public Service Commission

» NYS Independent System Operator