llspacing=0 width=100% bgcolor=ccccff> « back to results for ""
Below is a cache of http://www.nyserda.org/rps/Multiple_Intervenors_Comments.pdf. It's a snapshot of the page taken as our search engine crawled the Web.
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content.
NYSERDA - Multiple Intervenors Comments on Final Wind Study i
i
STATE OF NEW YORK
PUBLIC SERVICE COMMISSION
















Proceeding on Motion of the Commission
Regarding a Retail Renewable Portfolio

Case 03-E-0188
Standard















MULTIPLE INTERVENORS COMMENTS
ON THE PHASE 2 REPORT




Dated: February 18, 2005





COUCH WHITE, LLP
540 BROADWAY
P.O. BOX 22222
ALBANY, NEW YORK 12201-2222
(518) 426-4600
TABLE OF CONTENTS
ii
ii

Page


PRELIMINARY STATEMENT .............................................................................................. 1

SUMMARY OF COMMENTS................................................................................................ 1

POINT I .................................................................................................................................... 3

THE PHASE 2 REPORT FAILS TO ANALYZE THE FULL ECONOMIC
IMPACT OF ADDITIONAL WIND GENERATION......................................................... 3

POINT II ................................................................................................................................... 5

THE PHASE 2 REPORT FAILS TO ADDRESS ISSUES RELATING TO THE
RELIABILITY, OPERATIONS, AND ECONOMIC IMPACTS ON A NYISO
ZONAL BASIS .................................................................................................................... 5

POINT III.................................................................................................................................. 7

THE PHASE 2 REPORT FAILS TO EXAMINE THE IMPACT OF
ADDITIONAL WIND GENERATION ON EXISTING OR PLANNED NON-
WIND GENERATION......................................................................................................... 7

CONCLUSION......................................................................................................................... 9
PRELIMINARY STATEMENT


Multiple Intervenors hereby submits its comments on the Phase 2: System
Performance Evaluation Report (Phase 2 Report) in accordance with the schedule
established in the January 12, 2005 letter from Peter R. Keane, Assistant Counsel at the New
York State Energy Research and Development Authority (NYSERDA). As set forth
below, Multiple Intervenors urges NYSERDA and the New York Independent System
Operator (NYISO) to conduct further studies of the economic and reliability impacts of a
significant increase in wind power in New York State and to modify the Phase 2 Report to
indicate explicitly the limitations of the Phase 2 Report.

SUMMARY OF COMMENTS

It is Multiple Intervenors position that the draft Phase 2 Report does not
provide the detail that is necessary to evaluate the reliability, operational and economic
impacts of a significant increase in wind power on New York State. The final Phase 2
Report should include an analysis of the impacts on consumers and the bulk power system on
a NYISO zonal basis, not only on a statewide or superzonal basis. It also should include an
analysis of whether any existing generation will be retired or expected generation will not be
constructed as a result of the addition of significant amounts of subsidized wind generation.
And, the final Phase 2 Report should include a meaningful analysis of the cost to consumers
of the addition of significant amounts of wind generation.
The final Phase 2 Report must examine the cost impacts of integrating wind
power. The operating cost analysis in the draft Phase 2 Study is, at best, misleading. It does
2

not include, inter alia, the increased costs of ancillary services; increased uplift charges
resulting from uneconomic dispatch due to wind forecasting errors; or the additional costs
paid by consumers in the form of RPS subsidies. It also does not include the effect of any
plant retirements that may occur as the result of adding significant amounts of wind
generation as price takers. These may be substantial costs. The final Phase 2 Report should
include all operating costs, on a NYISO zonal basis. If the analysis has not been performed,
then the final Phase 2 Report should state specifically that the system operating cost analysis
is limited and the final Phase 2 Report should identify the costs that are not included in the
analysis.
1
Second, the draft Phase 2 Reports analysis is too limited. It includes an
analysis of the effects of integrating wind power on a statewide or superzone basis, but it
does not include an analysis of the planning, reliability, operational and economic impacts of
significant increases in wind generation on a NYISO-zone basis. The draft Phase 2 Reports
statewide analysis does not provide an adequate basis for analyzing the impacts on the
NYISO zones which will be most severely affected by the addition of wind generation.
Zones A, D, and E will be impacted significantly more, on a percentage basis, than the
remainder of the state. (See Phase 2 Report at Table 1.1.) A detailed NYISO zonal analysis
needs to be performed.

1
At the February 10, 2005 meeting at which the draft Phase 2 Report was discussed,
David Lawrence indicated that the NYISOs independent market advisor, Dr. David Patton,
is preparing an analysis of the potential economic impacts of adding a large amount of wind
power to the system. This analysis should be available shortly.

3
In addition, the final Phase 2 Report must examine whether any existing
generation will be retired or whether expected generation will be deferred or canceled as a
result of the addition of wind generation in New York State. Even though the draft Phase 2
Report acknowledges that increased retirements could cause local operational concerns
and/or decreased reliability and that these are valid concerns, the draft Phase 2 Report does
not examine this issue. (Phase 2 Report at 4.12.) This is an issue that must be analyzed in
order to determine the impact of additional wind power on reliability both on a statewide
basis and a NYISO zonal basis. This is particularly the case for each of the NYISO zones
that are west of the Central East Interface.

POINT I

THE PHASE 2 REPORT FAILS TO ANALYZE THE
FULL ECONOMIC IMPACT OF ADDITIONAL WIND
GENERATION


The Phase 2 Report states that the addition of significant amounts of wind
generation, which will displace non-wind generation, reduces system operating costs.
(Phase 2 Report at 2.5.) However, this conclusion is based on a limited and inadequate
analysis. Obviously, if you add generation (whether wind or non-wind) that is assumed to be
a price taker, bidding into the system at zero, then spot market prices should go down. (See
id. at 2.11, 4.1.) However to conclude that energy consumers benefit because there will be
a reduction in the spot market price is incorrect.
The Phase 2 Report did not include, in its analysis, increased costs related to
additional wind generation. The costs include, inter alia, increased ancillary service costs;
4
increased uplift costs, resulting, in part, from inaccurate wind forecasts; potential increased
capacity costs; increased costs associated with addressing local reliability issues; the cost of
the RPS subsides; and the cost to consumers if wind projects cause the early retirement of
non-wind generation.
For example, the Phase 2 Report states that an additional 36 MW will be
required to maintain same [regulation] performance. (Id. at 2.5.) But, the cost of the
additional 36 MW is not included in the Phase 2 Report cost analysis. Indeed, it is not even
quantified in the Phase 2 Report. Nor is there any analysis of the cost of accommodating the
incremental increase in variability that will occur as the result of increased wind generation.
(See id.)
The Phase 2 Report also fails to address the economic impact of having sub-
economic units perform load following. (Id. at 6.12.) The Phase 2 Report states that the
units required for load following may or may not be the most economic. (Id.) Yet there is
no economic analysis of using sub-economic units for load following. Another cost that is
not included in the Phase 2 analysis is the cost of any incentives for wind generators to
curtail production during periods of light load and excessive generation. (Id. at 2.7.) The
Phase 2 Report recommends that wind generators have clear financial incentives to reduce
output when energy spot prices are low (or negative). (Id. at 2.8.) However, the