Utilities Say New York Is Facing Summer Power Shortages
By JAYSON BLAIR
The New York Times
July 12, 2002

The New York region, which appeared to escape an approaching electricity crisis when the economy slowed and the World Trade Center attack cut the demand, is unexpectedly facing the potential for serious power shortages over the next couple of months, utility executives and energy experts say.

The turn of events is partly the result of the hot weather early in the summer, as well as increased use of air-conditioning units and computers, and low participation in energy conservation programs. In addition, matters have been made worse by aging equipment and by maintenance delayed by the need to complete repairs in the trade center area.

Consolidated Edison, which delivers electricity to the city and its northern suburbs, has revised its prediction of no growth in demand this summer. Three of Con Ed's 10 heaviest days of demand have occurred this year.

The collapse of the twin towers and the subsequent departure of other companies removed the demand for 90 megawatts of power in Lower Manhattan. Nevertheless, the overall effect of the terror attack and the recession have proved minuscule, as many workers returned to buildings in Lower Manhattan and others moved, along with their energy demand, to Midtown and other locations within Con Ed's territory.

"As much as we think there has been a significant impact because of Sept. 11 and the downturn in the economy, we are just not seeing it," said Joseph Oates, Con Ed's vice president for energy management. "A lot of people had a false sense of security that we were O.K., and we are not"

The problems are acute in some places outside the city. The Long Island Power Authority barely averted a power crisis last weekend when demand set records and four transmission lines went out of service.

In eastern Connecticut, 12,000 homes and businesses lost power last week after a substation transformer overloaded. Connecticut officials also warned last week that a potentially shrinking supply created a high risk of blackouts this summer.

"I wish we had nothing to worry about," said Lindsey Audin, president of Energywiz, an energy consulting firm in Croton-on-Hudson, N.Y., that has clients like Merrill Lynch. "But we are cutting it close this summer, and all over we will be short of supply by the summer of 2003."

Con Ed says that it has enough supply — about 13,847 megawatts — but that it is having trouble getting it to the right places. Long Island and New York City are two of the most difficult areas to supply because of geographical isolation and because population shifts create shifts in demand.

Development has increased demand in some neighborhoods, but power-generating companies have had a hard time obtaining the permits for new plants and substations in the affected areas. For example, in Chelsea, which has had some of the largest increases in use in the city, Con Ed has had to place nearly a dozen gas generators on the streets. Near Wall Street, Con Ed also found itself in a race against time this spring to replace a substation that was destroyed in the trade center collapse.

Still, supply, just as much as transmission, could be a problem for Con Ed, officials acknowledge. Before the trade center attack, Con Ed had estimated that its peak load, or highest level of use — based on past use, the economy, changes and growth — would be 12,175 megawatts this summer. Most experts expected Con Ed to lower those estimates after the attack, in part because the trade center demand was gone and also because of the slowing economy.

To the surprise of many experts, Con Ed raised those projections this spring, saying it expected a peak load of 12,225 megawatts. "If the heat wave had not been during the July 4th holiday week, it would have blown through that 12,225 forecast as well," said Mr. Oates, the Con Ed vice president.

If electrical demand exceeds supply, utilities are forced to shut down service in certain areas to prevent equipment overloads and systemwide blackouts. Con Ed officials say they believe brownouts are likely for the summer and that the area could be in for a major blackout if there is any significant equipment failure.

Carol Murphy, a spokeswoman for the New York Independent System Operator, which runs the state electrical grid, said the city and Long Island were among the most susceptible to equipment problems because so much of the transmission system is underground and therefore can easily overheat.

Ms. Murphy said officials in New York and Long Island were setting up emergency generators for summer use and were asking companies to cooperate by sending workers home early on hot days. "We are skating on the edge," Ms. Murphy said.

This week, the Long Island Power Authority installed mobile gas-turbine generators in a parking lot at Robert Moses State Park to prevent blackouts on Fire Island this weekend. Last week, Fire Island, where demand has grown 20 percent in the last year alone, experienced brownouts and rolling blackouts after three transmission lines went out of service.

Thousands of homes and businesses in Nassau and Suffolk Counties could have lost power in another incident last Friday, when a fire knocked out a transmission line in Yonkers that supplied a fifth of the power used on Long Island.

If the problem had happened two days earlier, when a heat wave sent use soaring, Long Island officials said, it almost certainly would have resulted in several major blackouts.

Those officials say there is little margin for error. "You have to look at these numbers with real concern," Richard M. Kessel, the LIPA chairman, said yesterday at a news conference, at which he called for power conservation.

Power companies worry about any succession of three hot days, because experience shows that's when people lose patience and buy air-conditioners. The first wave of purchases, though, usually comes in August, not July, officials said.

Fred Zalcman, executive director of the Pace Law School Energy Project, a research and advocacy organization based in White Plains, said that he was sure as recently as this February that the crisis reached well beyond the region, but that he didn't think so any longer.

He said several factors, including "the unusually hot period in early summer, coupled with increased air-conditioning use, the economy seeming to rebound sooner than we thought," have made matters tighter than expected. Mr. Zalcman added that Long Island problems have demonstrated that "if under extreme heat conditions equipment does not work, we might need a wider buffer."

In Connecticut, NRG Energy Corporation, a troubled company that took over power generation in parts of the state, is threatening to halve the output at its Devon Power Station unless regulators provide subsidies to keep it running. Officials at the Connecticut Department of Public Utility Control say there is serious danger of blackouts in the areas served by the plant, including Fairfield County.

Thousands of customers in Stamford, Greenwich, Westport and other nearby towns experienced brownouts and blackouts last week when the Connecticut Light and Power system was strained by the weather on July 3.

Power officials are equally concerned about the long-term future. President Bush has included New York and California among the states with the most severe energy supply problems. Unlike California, New York has not experienced utility bankruptcies, but some officials are concerned that there is not enough power generation for the long term, particularly downstate.

The New York Independent System Operator estimates that the state will need 7,100 additional megawatts, a 22 percent increase in supply, by 2005. Statewide, only two new plants have been approved, neither of them in New York City or Long Island.

Suburban New Jersey has not reached its peak levels yet, according to officials at several electrical utilities. In fact, several generators in New Jersey have proposed helping supply power to Manhattan.

"Like everything involved with power in this area, you feel a lot better when there is a shovel in the ground," Mr. Oates said. "Well, there are no shovels in the ground, and not enough time, either."

Entergy's Response

The Indian Point Energy Center produces 2,000 megawatts of clean, low-cost electricity. If Indian Point were to close, removing that amount of power from the grid, the potential energy shortages outlined in this story for New York City and the region would be much more severe, not only for this year, but for years to come. Blackouts and higher energy costs would be even more likely.

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