Niagara Power Project FERC No. 2216

 

RESOURCE CAPABILITY, UTILIZATION, AND PRODUCTS

 

HTML Format.  Text only

 

Prepared for: New York Power Authority 

Prepared by: E/PRO Engineering & Environmental Consulting, LLC

 

August 2005

 

Copyright © 2005 New York Power Authority

 

___________________________________________________

 

ABBREVIATIONS

Agencies

EC                   Environment Canada

FERC               Federal Energy Regulatory Commission

IJC                   International Joint Commission

INBC               International Niagara Board of Control

NYISO             New York Independent System Operator

NYPSC            New York Public Service Commission

NYSRC            New York State Reliability Council

OMOE             Ontario Ministry of the Environment

OMNR             Ontario Ministry of Natural Resources

OPG                 Ontario Power Generation

USACE            United States Army Corps of Engineers

USGS               United States Geological Survey

Units of Measure

C                      Celsius, Centigrade

cfs                    cubic feet per second

El.                    elevation

F                      Fahrenheit

fps                    feet per second

G                      giga (prefix for one billion)

gpm                  gallons per minute

GW                  gigawatt

GWh                gigawatt-hour

hp                     horsepower

Hz                    hertz, cycles per second

k                      kilo (prefix for one thousand)

km                    kilometer

kV                    kilovolt

kVA                 kilovolt-ampere

kW                   kilowatt

kWh                 kilowatt-hour

L                      liter

m                     meter

M                     mega (prefix for one million)

mgd                  million gallons per day

ml                     milliliter

MV                  megavolt

mVA                millivolt-ampere

MVA               megavolt-ampere

MW                 megawatt

Mwh                megawatt-hour

V                     volt

W                     watt

Wh                   watt-hour

Regulatory

CFR                 Code of Federal Regulations

NEPA              National Environmental Policy Act

NYPSC            New York Public Service Commission

Miscellaneous

APEA              Applicant-Prepared Environmental Assessment

CENDA           Center for Development Analysis

DEIS                Draft Environmental Impact Statement

EA                   Environmental Assessment

EIS                   Environmental Impact Statement

FSCR               First Stage Consultation Report

ICAP               Installed Capacity

LBMP              Locational Based Marginal Price

LENRIB           Lake Erie Niagara River Ice Boom

LPGP               Lewiston Pump Generation Project

LSE                  Load Serving Entity

MIS                  Market Information System

NERC              North American Electric Reliability Council

NMPC             Niagara Mohawk Power Corporation

NPCC              Northeast Power Coordinating Council

NYCA             New York Control Area

NYISO             New York Independent System Operator

NYSEG            New York State Electric & Gas

NYSRC            New York State Reliability Council

OASIS             Open Access Same-Time Information System

OATT              Open Access Transmission Tariff

RG&E              Rochester Gas and Electric

RMNPP           Robert Moses Niagara Power Project

TO                   Transmission Owner

TCC                 Transmission Congestion Contracts

                   EXECUTIVE SUMMARY

The New York Independent System Operator (NYISO) and the New York State Reliability Council (NYSRC) are charged with ensuring the reliable and safe operation of the New York Control Area (NYCA) bulk power electric system.  The Niagara Power Project is electrically connected to the NYCA high voltage transmission system, which has nearly 11,000 miles of transmission lines and over 360 individual electric generating units.  The peak electric use (“load” or “demand”) of New York’s 18.2 million people is over 32,000 MWs with an energy consumption of 160 million MWhs annually. This load creates the need to generate and move power from the generator to the customer.  The NYISO operates the electric system in New York twenty-four (24) hours a day, seven (7) days a week such that electricity can flow in a controlled fashion from the generator to load over transmission lines.

The NYISO is a not-for-profit corporation created in 1999 to maintain reliable, safe, and efficient operation of the New York electric system and facilitate a fair and equitable wholesale power market through which electric capacity, energy and related items can be produced, sold and delivered to consumers.  It enforces Reliability Rules established by the NYSRC, which defines a reliable electric system to be adequate to meet the electric needs of all consumers with the ability to withstand sudden and unanticipated electrical disturbances or loss of system elements. The NYISO also adheres to North American Electric Reliability Council (NERC) and North East Power Coordinating Council (NPCC) reliability standards.

Prior to November 1999, the generation owned by the Power Authority, the investor-owned utilities, and others was coordinated and dispatched at the direction of the New York Power Pool.  Since November 1999 and the creation of NYISO, New York has established a deregulated power market.  NYISO facilitates open access to the NYCA transmission system and ensures nondiscriminatory operation of electricity markets coordinated by the NYISO. While the ISO is governed by a 10 person Board that is independent of market participants, parties to the NYISO Agreement provide input into ISO operations through participation in various stakeholder committees.


Since the inception of the deregulated market, generation in New York must submit bids to the NYISO on a day-ahead and hour-ahead basis for generation and ancillary services to be supplied by the generator.  “Generation” covers the traditional energy requirements of the loads, and “Ancillary Services,” as discussed in Section 3.1.1 below, are what support the transmission of energy and reactive power from generation to loads; they are used to maintain reliable operation of the New York State power system.

Also new with the advent of the deregulated power market, consumers can bid their load in to the Day-Ahead market, and pre-buy electric service to guarantee a fixed price for their electric needs on the following day.  Both load not bid and settled day-ahead must be served in the Real-Time market, at prices determined by system conditions each hour.

The NYISO is controlled by four (4) major agreements by and among the electric industry stakeholders in New York. 

1. The NYISO Agreement establishes the NYISO and sets forth its rights, authority and obligations.

2. The New York State Reliability Council Agreement establishes the NYSRC and sets forth its responsibilities and authority regarding establishment and enforcement of Reliability Rules.

3. The NYSRC/NYISO Agreement establishes that NYISO will perform its duties of Operational Control of the New York electric system in compliance with Reliability Rules and procedures established by the NYSRC and that NYSRC will monitor NYISO’s performance in this regard.

4. The NYISO /Transmission Owners (TO) Agreement sets forth that, while the TO have financial and technical rights and obligations regarding ownership and safe, reliable operation of the electric transmission system, the NYISO has been delegated authority to implement many of these rights and obligations.

A foundation concept to deregulation is opportunity for power market participants to buy transmission services.  This “open access” right was established by FERC in its 1996 Orders 888/889 which required each TO to offer  non-discriminatory  service over transmission facilities. Each TO is required to maintain an “Open Access Transmission Tariff” (OATT), which sets forth the rules, procedures and charges for use of the transmission system. In New York, much of the bulk power system transmission access is obtained through the NYISO OATT, which offers access to most of the NYCA electric system. Eligible customers can obtain transmission service on-line via an OASIS (Open Access Same-Time Information System), an internet based electronic bulletin board and market place for those wishing to purchase transmission service.

The NYISO Market Administration and Control Area Services Tariff provides for the functions (“market services”) required of the NYISO regarding administration of the sale and purchase of energy, capacity, ancillary services and demand reduction.  This Tariff also governs NYISO’s provision of services to ensure the reliable operation of the New York State (NYS) Power System (“control area services”).  This FERC- authorized Tariff establishes rules and procedures for two wholesale markets, the Day-Ahead Market and the Real-Time Market.  The Day-Ahead market allows market participants to forecast load (if they are a Load Serving Entity or LSE), or determine available generation (if a generator) and inform the NYISO of their interest to buy or sell power.  The market participant submits bids to the NYISO to inform it of the amount and price at which they will buy or sell.  The purpose of the Day-Ahead market is to allow NYISO to plan ahead for adequate generation for the coming day to serve the load in New York and to allow market participants to lock in a purchase or sale price based upon the NYISO calculated Locational Based Marginal Price (“LBMP” or “market price”) for each of the 24 hours for the coming dispatch day.

Prior to the start of the deregulated market in 1999, the Project scheduled its generation very precisely to match load forecasts provided by its customers.  While some transfers of electrical energy from other NYPA generation and bilateral purchases from third parties could be made to serve customer needs, Niagara was primarily responsible for its customers needs.  As a rule, output of the Project matched its customer use both in quantity and timing.  Since 1999, however, the dispatch of the Project has been at the discretion of the NYISO, which makes its decision based upon a comparison of competitive bids submitted by generators across New York.  Should the Niagara Project be dispatched by NYISO at a level of generation insufficient to serve all Project customers needs, NYPA will purchase energy from the NYISO administered market to make up any shortfall. NYPA will continue to bill its customers under their contracts, the customer power will be delivered via the NYCA system, but the generation source will not be the Project. When this occurs, NYPA is billed after the fact for the power it purchases through an established NYISO settlement process.  

The Niagara Project is rated at 2,400 MW Net Dependable Capacity under adverse flow conditions. The firm capacity of the Niagara Power Project, as determined by FERC for purposes of allocations under the Niagara Redevelopment Act, is 1,880 MW. Generating efficiency for the Lewiston Pump Generating Plant (LPGP) units ranges from 75% at minimum operating head of 60 feet to a high of nearly 90% at a head of 100 feet.  The Robert Moses Niagara Power Plant has a much smaller range than LPGP with about an 87% to 93% range on the original generating equipment, depending upon volume of water flows used for generation.  The majority (10 of 13) of the Robert Moses units have already been upgraded and repaired and show slightly higher efficiency with ranges from approximately 88% to 94%.  The Project has high reliability with an historical forced outage rate of less than 1%, with RMNPP near 0.2% and LPGP at around 1.0%.  The Project has a unit availability of nearly 90%, with 89.65% available for Robert Moses and 89.1% availability for LPGP. 

The low cost hydropower from the Project is sold to municipally owned electric systems and rural electric cooperatives throughout New York State and in neighboring states under Federal requirements, to investor-owned utilities in the vicinity of the Project (Niagara Mohawk and New York State Electric & Gas) for resale to businesses and to three upstate investor-owned utilities (Niagara Mohawk, New York State Electric & Gas and Rochester Gas & Electric) for resale to their residential customers.  All of the power is resold to retail consumers with no profit or markup on the commodity cost.

There is a significant level of cooperation between the U.S. and Canada regarding Niagara River resources, with the International Niagara River Water Diversion Treaty of 1950 (1950 Treaty) serving as one cornerstone of the cooperation.  The Treaty mainly allocates water for scenic flows over the Falls, and provides for the sharing of water between the United States and Canada for power production, less the amount of water used and necessary for domestic and sanitary purposes and for the service of canals for the purposes of navigation. The Treaty also provides for civil works to produce an even flow over the entire crest of the Falls. The International Joint Commission, established by an even earlier treaty, and related sub groups oversee the management of Niagara River and Falls resources.  A Control Structure upstream of Niagara Falls, a seasonal ice boom at the source of the Niagara River, and numerous river flow gauges are some of the facilities used in this management effort.

Ontario Power Generation owns and operates hydroelectric facilities on the Canadian side of the Niagara River.  These plants, Sir Adam Beck # 1 & 2, with a combined electrical output of approximately 1,900 MWs, are nearly as large as the Niagara Project. Coordination and cooperation between the operators of the two large power projects provide mutually beneficial efficient ice management and water diversion procedures.

1.0     INTRODUCTION AND DESCRIPTION OF STUDY

The New York Power Authority (NYPA) is engaged in the relicensing of the Niagara Power Project which is located in Lewiston, Niagara County, New York.  The present operating license of the plant expires in August 2007.  As part of its preparation for the relicensing of the Niagara Project, NYPA is developing background information related to the ecological, engineering, recreational, cultural, and socioeconomic aspects of the Project.  This report considers the hydropower resource capability and utilization of the Niagara Power Project (“NPP” or “the Project”) as well as the electric power products it generates. The purpose of the study is to specifically describe the influence on the Project of the New York Independent System Operator and the related wholesale power market that NYISO administers. Recent broad changes in the electric power industry are also described. In addition the Report discusses the Lake Erie Niagara River Ice Boom and the Canadian hydroelectric generation which shares the Niagara River resources. 

1.1         New York Power Authority and the Niagara Project

The New York Power Authority (NYPA) is a state-owned power company that builds and operates electric generation and transmission throughout New York.  NYPA was established as a non-profit, tax-exempt energy corporation though the New York Power Authority Act of 1931.  NYPA is the largest state-owned power company in the United States. It currently operates 17 generating facilities and about 1,400 miles of transmission lines. 

The 1,880-MW (firm capacity) Niagara Power Project (NPP) is one of the largest non-federal hydroelectric facilities in North America (Figure 1.1-1).  The Project was licensed to the Power Authority of the State of New York (doing business as the New York Power Authority) in 1957.  Construction of the Project began in 1958, and electricity was first produced in 1961.  The Project has several components.  Twin intakes are located approximately 2.6 miles above Niagara Falls.  Water entering these intakes is routed around the Falls via two large low-head conduits to a 1.8-billion-gallon forebay, lying on an east-west axis about 4 miles downstream of the Falls.  The forebay is located on the east bank of the Niagara River. At the west end of the forebay, between the forebay itself and the river, is the Robert Moses Niagara Power Plant (RMNPP), NYPA’s main generating plant at Niagara.  This plant has 13 turbines that generate electricity from water delivered to the forebay.  Head is approximately 300 feet. At the east end of the forebay is the Lewiston Pump Generating Plant (LPGP).  Under non-peak-usage conditions (i.e., at night and on weekends), water is pumped from the forebay via the plant’s 12 pumps into the 22-billion-gallon Lewiston Reservoir, which lies east of the plant.  During peak usage conditions (i.e., daytime Monday through Friday), the pumps are reversed for use as generators, and water is allowed to flow back through both plants sequentially, and producing electricity at both plants.  The forebay therefore serves as headwater for the RMNPP and tailwater from the LPGP.  South of the forebay is a switchyard, which serves as the electrical interface between the Project and the State’s electric grid (Figure 1.1-2).

For purposes of generating electricity from Niagara Falls, two seasons are recognized: tourist season and non-tourist season.  By the 1950 Niagara River Water Diversion Treaty, flows over the Falls during tourist hours must be at least 100,000 cfs, and at other times 50,000 cfs. Tourist hours are from 8:00 a.m. to 10:00 p.m. from April 1 through September 15 and from 8:00 a.m. to 8:00 p.m. September 16 through October 31.  Canada and the United States are entitled by international treaty to produce hydroelectric power with the remainder, sharing equally.

Water level fluctuations in the Chippewa-Grass Island Pool (in the upper Niagara River) are limited by an International Joint Commission directive to 1.5 feet per day.  It is important to note that water level fluctuations in both the upper and lower Niagara River may be caused by a number of factors other than operation of the NPP.  These may include wind, natural flow and ice conditions, and operation of power plants on the Canadian side of the river.

Water-level fluctuations in the lower Niagara River (upstream of the RMNPP tailrace) from all causes can be as great as 12 feet per day.  Most of this daily fluctuation is due to the change in the treaty-mandated control of minimum flow over Niagara Falls.  Water level fluctuations downstream of the RMNPP tailrace are much less.  The average daily water level fluctuation 1.4 miles downstream of the RMNPP tailrace, during the 2002 tourist season, was approximately 1.5 feet.  Water flows including water level fluctuations in the Niagara River above and below the Niagara Falls are a result of the combined flows of the Sir Adam Beck Power Plant in Canada and the Project.

Operation of the NPP can result in water level fluctuations in the Lewiston Reservoir of 8-18 feet per day, and as much as 36 feet per week.

1.2         Background and Study Objectives

In 2002, NYPA notified the Federal Energy Regulatory Commission (FERC) that it would seek a new license for the Project.  The Federal Power Act requires the application be submitted by August 31, 2005, two (2) years before the existing license expires. In July 2002, FERC approved NYPA’s request to engage in an Alternative Licensing Process (“ALP”), which provides stakeholders increased opportunities to participate, particularly early in the process. During the scoping phase of the ALP process, NYPA and the stakeholders identified a number of important issues relevant to the Project relicensing, including this Issue # 7, entitled “Assess Niagara Project Hydropower Resource Capability, Utilization, and Products Including the Opportunities and Constraints.”

The objective of this Study is to develop an understanding of the relationship between the New York Independent System Operator (NYISO) and Project operations, as well as an understanding of the Project’s current efficiency, capability, and reliability. 

1.3         Organization of the Report

This Report is divided into six (6) major chapters, including this introduction, and the Executive Summary.

Chapter 2 is entitled “The New York Control Area (NYCA), The New York Independent System Operator (NYISO), and the New York State Reliability Council (NYSRC)”.  This chapter provides an overview of the regional operation of the bulk power electric system in New York.  NYCA is described in terms of area and size, electrical consumption and facts about the electric system.  The overview of the NYISO contains a description of its mission, governance, stakeholders, and controlling legal documents.  The purpose and composition of the NYSRC is included as well.  Main sources of information are documents, agreements and tariffs establishing and controlling these organizations, which are largely available on the entities’ public web sites.

Chapter 3 discusses “Project Operations, Output, and Products Sold in the Regional Power Markets”.  It describes these items including electric power output as well as the regional power markets in which they are sold.  Historical and current operations, distribution and customers are explained.

Chapter 4 is entitled “Niagara Project Capability, Efficiency, Utilization, Reliability and Potential Upgrades” and provides a description of Project facilities. It also covers the operating efficiency, reliability and utilization of the Project including a description of an upgrade of the Robert Moses plant.

Chapter 5 addresses  “International Cooperation on Niagara River Resources”, and covers international treaties, organizations and agreements concerning the joint use by Canada and the U.S. of the river and structures in it relating to the production of electric power.  The impact on NYPA’s Niagara Project from operation of the Canadian hydroelectric projects is described (Figure 1.3-1).

Chapter 6 considers the limited influence on the Project of electric power market changes described earlier in the Report. 

 

Figure 1.1-1

Project Vicinity

[NIP – General Location Maps]

 

Figure 1.1-2

Niagara Power Project

[NIP – General Location Maps]

 

Figure 1.3-1

U.S. and Canadian Power Generating Stations, Lower Niagara River

[NIP – General Location Maps]

 

2.0     THE NEW YORK CONTROL AREA , THE NEW YORK INDEPENDENT SYSTEM OPERATOR , AND THE NEW YORK STATE RELIABILITY COUNCIL

The NYISO and the NYSRC are charged with ensuring the safe and reliable operation of the New York Control Area bulk power electric system.  NYSRC sets forth rules and standards to achieve reliability and the NYISO implements these rules as part of its duties to oversee operation of the system.  Both entities are approved by and operate under the authority of the Federal Energy Regulatory Commission. 

2.1         Overview of the New York Control Area

The NYCA is composed of the entire electric system within New York State. It encompasses the transmission and distribution facilities, generators and, of course, customers (load) that make up the electric utility system.  The NYCA contains nearly 11,000 miles of High Voltage Transmission lines, 360+ individual electric generating units of widely varying size (from over 1,000 MW down to less than 1 MW). Total generating capacity installed in the NYCA exceeds 35,000 MW.  The load (customer use) in New York is greater than 160,000,000 MWhs per year. Peak demand (the single hour of highest electric use during the year) in July 2005 was 32,075 MW. The New York electric system serves the needs of 18.2 million people state-wide.  The electrical load in NYCA is larger than the load of the combined six (6) New England States and is slightly smaller but similar in size to the load of control areas operated in each of the Canadian provinces of Ontario and Quebec.

2.2         New York Power System Fundamentals

The NYISO describes four (4) basic power system concepts which explain how the electric system works in the physical world.  The four (4) concepts are:

·         “Load Customers” determine Demand

·         “Dispatch” determines where power is generated.

·         The laws of physics determine how the power flows to the Load Customers

·         Flows must be controlled

The customer use of electricity (“load” or “demand”) creates the need to generate and move the power from the generator to the customer.  The NYISO determines which generators, including the Project, will operate and when they operate, with the knowledge that the design and operation of an electric system is a constant balancing act.  The load continually changes because of the fluctuating needs of all the customers in the NYCA.  As the load changes, the NYISO changes generation accordingly to serve that load, striving for a perfectly balanced system with load and generation exactly equal.  The mix of generating units available to serve load changes due to forced outages, fuel issues, etc., and the transmission system elements can become inefficient or fail from time to time as well.  The determination of generating units to run and when they run is made by the NYISO with the help of sophisticated computer software. This dispatch by NYISO is influenced by the location of the load and generators and how the electricity flows over all available power lines.  If left unhindered electricity flows from the generator to the consumer over the path of least resistance.  Such flows must be controlled by the NYISO to avoid problems or failures on the electric system.  The NYISO operates the electric system in New York twenty-four (24) hours a day, seven (7) days a week such that electricity can flow in a controlled fashion from the generator to the consumer over the transmission lines.

2.3         Overview of New York Independent System Operator

The predecessor to the NYISO, the New York Power Pool (NYPP), was established in July 1966 (NYPA joined in 1967) to operate the electric system in a reliable, secure and coordinated fashion and to enhance economics of dispatching energy from generating units.  In July 1999, in response to evolving industry deregulation, the parties to the NYPP agreed to create the NYISO to perform those functions and simultaneously terminated the Power Pool arrangement.

The NYISO is a not-for-profit corporation created to maintain reliable, safe, and efficient operation of the New York State Power System.  Its purpose is to oversee the bulk power system. It provides open access transmission service over the State’s bulk power transmission system and facilitates the operation of a wholesale power market through which electric capacity, energy and related items can be produced, sold and ultimately delivered to consumers.  The NYISO is charged with the economic dispatch of generation units, coordination of maintenance and outage schedules for generation and transmission facilities and administration of various tariffs and agreements.  By agreement of the parties, it has operational control over significant portions of the NYS Power System.

The Board Of Directors (Board), subject to regulatory oversight by the FERC, is the decision-making authority for the NYISO, but it is assisted by organized committees composed of stakeholders in the New York electric power industry.  The NYISO Stakeholders include all parties to the NYISO Agreement, each of which populate one of the five Sector Groups of the NYISO (Generation Owners, Other Suppliers, Transmission Owners, End Use Consumers, Public Power/Environmental Parties).  Table 2.5.1-1 provides more detail on the 5 sectors and 9 sub-sectors of the NYISO Stakeholders. Any person or entity that meets requirements for participation may become a Party to the NYISO Agreement upon payment of an annual fee (which varies among organizations).  All Parties to the Agreement may participate in governance of the NYISO after joining one of the five (5) sectors. The appropriate sector is determined according to the business interest of that Party.

The Management Committee (MC) is comprised of each Party to the NYISO Agreement.  The responsibilities of the MC include, among others, supervision of other NYISO committees and development of procedures and positions on NYISO operations, policies, rules, and procedures for the NYISO Board.  Also the MC is responsible to propose changes as necessary to various Agreements and Tariffs that govern NYISO business affairs.  The MC develops an annual budget for the NYISO Board consideration and approval. Actions of the Management Committee may be appealed to the NYISO Board.

The Operating Committee (OC), like the MC, is comprised of Parties to the NYISO Agreement. The NYISO Agreement specifies responsibilities for the OC, which include establishment of rules, procedures and requirements related to the safe and reliable operation of the NY electric system, and to serve as the liaison to the NYSRC for purposes of electric system reliability.

The Business Issues Committee (BIC) likewise is comprised of Parties to the NYISO Agreement. The NYISO Agreement specifies responsibilities for the BIC, which include establishing efficient and non-discriminatory commercial and financial standards and procedures to enable NYISO operations and permit functioning of the bulk power market in New York. In addition the BIC is charged with maintaining procedures for the secure financial and monetary operation of the NYISO.

The NYISO main facility is in Schenectady, NY with other offices and control facilities in nearby communities.  The day-to-day operations of the NYISO are managed by a President who is a voting member of the NYISO Board and is selected by the Board.

2.4         NYISO Mission

 The Mission of the NYISO is:

(1) to maintain the safety and short-term reliability of the New York State (NYS) Power System in conformance with Reliability Rules promulgated by the NYSRC so as to maintain the integrity and reliability of the interconnected NYS Power System;

(2) to maintain the internal and external operations of the NYS Power System which may have an impact on the security of the interconnected NYS Power System in accordance with the terms of the NYISO Agreement;

(3) to comply with the Commission’s NYISO principles as stated in, among others, Order Nos. 888/889;

(4) to facilitate an effective and equitable marketplace; and

(5) to administer the Open Access Transmission Tariff (OATT) and ISO Services Tariff.

 

2.4.1        Electric System Reliability

New York Reliability Rules define a reliable electric system to be one that is adequate to meet the electric needs of all consumers with the ability to withstand sudden and unanticipated electrical disturbances or loss of system elements.  The NYISO is the New York Control Area operator responsible for maintaining a reliable electric system and as such provides numerous Control Area Services in accordance with the standards and criteria of the North American Electric Reliability Council (NERC),  the Northeast Power Coordinating Council (NPCC),  the NYSRC Reliability Rules, and Good Utility Practice.  These services are provided in accordance with the terms of the  NYISO Market Administration and Control Area Services Tariff (ISO Services Tariff), the NYSRC Reliability Rules, the NYISO Related Agreements, and general standards of good practice in the electric industry (Good Utility Practice).  The NYISO has authority to interact with Operators in Control Areas surrounding New York to ensure the effective and reliable coordination with the interconnected Control Areas.  It is responsible for maintaining the safe, efficient, and continual operation of the electric system and provides the implementation of reliability standards promulgated by NERC and NPCC and for the Reliability Rules promulgated by the NYSRC.

The NYISO develops and implements reliability procedures, coordinates outage schedules for generation and transmission, and bears responsibility for  committing adequate generation resources to ensure the reliability of the NYS Power System. This includes defining the long-term requirements and location of installed generating capacity requirements for New York and developing many measures for action during abnormal or emergency conditions.

The NYISO maintains and operates a control center in order to monitor and coordinate power flows in New York and with neighboring Control Areas.  It maintains back up procedures and rules for operation under adverse and emergency circumstances and has communication and metering rules and procedures necessary to perform its function as the Control Area Operator.

Based upon standards established by NYSRC, the NYISO forecasts peak load on a yearly basis and determines the minimum installed generating capacity (ICAP) requirement for each Load Serving Entity (LSE). New York is divided into eleven (11) zones for purposes of planning and operating the electric system, and the NYISO determines the amount of capacity required state-wide and the amount that must be physically located within certain zones.  The NYISO also determines the extent to which capacity from outside of New York can be counted to meet New York’s capacity needs. Each LSE must secure adequate capacity, in the proper locations, to meet the requirement as established by NYISO.  The purpose of these capacity rules and procedures is to provide NYISO with a management and planning tool to maintain long term electric system reliability.

2.4.2        Electric Power Marketplace in New York

NYISO procures sources of power and certain ancillary services through deregulated power markets that it administers.  By doing so, NYISO provides non-discriminatory open access to the New York State transmission system for all market participants, and allows meaningful involvement by market participants in the operation of NYISO.

Since the inception of the deregulated market, electrical generation in New York, including the Project,  must submit bids to the NYISO on a day-ahead and hour-ahead basis for generation and ancillary services.  “Generation” covers the traditional energy requirements of the loads, and “Ancillary Services” as discussed in Section 3.1.1 below, support the transmission of energy and reactive power from generation to loads. Ancillary Services help to maintain reliable operation of the New York State power system.

Also new with the advent of the deregulated power market, consumers  also can bid their load in to the Day-Ahead market, and pre-buy electric service to guarantee a fixed price for electricity needed for the following day.  Load not so bid and settled day-ahead must be served in the Real-Time market, at prices determined by system conditions each hour.

Further description of the Day-Ahead and Real-Time markets is provided in Section 2.6.2, below.

2.5         Controlling Agreements

The NYISO is controlled by four (4) major agreements by and among the electric industry stakeholders in New York. 

1.       The NYISO Agreement establishes the NYISO and sets forth its rights, authority and obligations.

2.       The New York State Reliability Council Agreement establishes the NYSRC and sets forth its responsibilities and authority regarding establishment and enforcement of Reliability Rules.

3.       The NYSRC/NYISO Agreement establishes that NYISO will perform its duties of Operational Control of the New York electric system in compliance with Reliability Rules and procedures established by the NYSRC and that NYSRC will monitor NYISO’s performance in this regard.

4.       The NYISO/Transmission Owners Agreement sets forth that, while the TOs have financial and technical rights and obligations regarding ownership and safe, reliable operation of the electric transmission system, the NYISO has been delegated authority to implement many of these rights and obligations.

2.5.1        Independent System Operator Agreement

The Incorporating (original) Parties (“the Parties”) to the 1999 NYISO Agreement are:

1. Central Hudson Gas & Electric Corporation (Central Hudson”)

2. Consolidated Edison Company Of New York, Inc. (“Con Edison”)

3. New York State Electric & Gas Corporation (“NYSEG”)

4. Niagara Mohawk Power Corporation (“NMPC”)

5. Orange And Rockland Utilities, Inc. (“O&R”)

6. Rochester Gas And Electric Corporation (“RG&E”)

7. Power Authority of The State of New York (“NYPA”)

8. Long Island Power Authority (“LIPA”)

The Agreement sets forth the Mission of the NYISO as well as its responsibilities, obligations and authority as described in Section 2.4 above. 

The NYISO is required to allow, on a non-discriminatory basis, involvement of the Parties in oversight of the NYS Transmission System and to provide for Open Access service on the NYS Transmission system.  It accomplishes this by operating an OASIS (Open Access Same Time Information System) for purposes of allowing participants in the Wholesale Market to purchase and sell transmission services required for the operation of that Market.  The Parties did not intend for the creation of the NYISO to inhibit or prevent in any way the establishment of competitive retail electric markets.

Any person or entity that meets requirements for participation may become a Party to the NYISO Agreement upon payment of a $5,000 annual fee (certain organizations representing consumer or environmental interests are only required to pay $100 annually).  All Parties to the Agreement may participate in governance of the NYISO after joining one of five (5) sectors as described in Table 2.5.1-1.

An entity with a significant interest in a sector which does not qualify for membership in that sector may become a non-voting member of NYISO Committees and have rights of participation up to but not including the right to vote on matters brought before the Committees. A non-voting member may not serve as Chair or vice-chair of a committee or sub-committee.

The NYISO Agreement can be terminated by unanimous agreement of the Parties any time after the 5th anniversary of its effective date of December 1, 1999.  Any Party may individually withdraw from the NYISO Agreement upon 90 days written notice to the NYISO Board of Directors.  Business in progress at the time of termination of the Agreement or withdrawal of an individual Participant shall be concluded in an orderly manner in accordance with NYISO rules and contractual requirements.

The NYISO is governed by a 10 person Board of Directors, with the day-to-day operations of the NYISO managed by a President who is a voting member of the Board and is chosen by the Board. A Chairperson, who cannot be the President of the NYISO, is elected for a one-year term by the other 9 Board members and can be re-elected. These Board members cannot be affiliated with any entities that are Market Participants in the NY Wholesale Market, however at least 3 must have prior relevant experience in the electric industry. The NYISO Board is self-perpetuating, with remaining Directors filling vacancies from a slate of candidates provided by the Management Committee (MC).

Section 2.3 above describes the NYISO Committee structure that includes the Management Committee, the Operating Committee (OC), and the Business Issues (BIC) Committee. Subcommittees are established as necessary to work on specific issues.

The NYISO Board must review and decide on appeals from actions of the MC or other NYISO Committees, and may suspend a Committee action pending appeals.  The NYISO Board sets annual budgets and is responsible for the financial affairs of the NYISO, and appoints an independent auditor to assist in these duties.  The Board has ultimate responsibility for the operation of the NYISO and for implementation of its basic responsibilities including:

·         Safe, reliable, and efficient operation of the NYS Power System;

·         Provision of Transmission Service to all Transmission Customers on a non-discriminatory basis in accordance with the NYISO OATT;

·         Provision of Market Services and Control Area Services under the NYISO Services Tariff, including the administration of the Day-Ahead unit commitment and real-time dispatch;

·         Administration of centrally coordinated markets for Energy, Capacity and Ancillary Services; and 

·         Administration of Installed Capacity requirements for Load Serving Entities (LSEs)

The NYISO is the New York Control Area Operator and has responsibilities to interact with other Control Areas Operators for administration of markets and services.  NERC defines a control area as “an electric system or systems, bounded by interconnection metering and telemetry, capable of controlling generation to maintain its interchange schedule with other Control Areas and contributing to frequency regulation of the Interconnection.”  A Control Area Operator is an entity with an electric system control center whose responsibility it is to monitor and control that electric system in real time.

The NYISO includes a Market Monitoring Unit that is in charge of ensuring fair access to the appropriate segment of the bulk electric power market for all Market Participants.  Fair access ensures that the outcome of the offers for generation and bids for load approaches that of a competitive market. Fair access also ensures the price, supply, and demand signals from all Market Participants are clear and timely, such that they can make informed decisions based upon those signals.  The NYISO website contains a link to its Market Monitoring section. ( www.nyiso.com )

The NYISO is charged with the duty to provide the same opportunity to all Participants for the purchase and sale of Wholesale Market Products on a comparable and non-discriminatory basis and has the responsibility to establish and file with FERC operating and other procedures as necessary to provide Transmission, Market and Control Area Services.  It also must maintain reliable and efficient operation of the NYS Power System, including implementation of emergency procedures, in accordance with Agreements with the NYSRC and Transmission Owners.  Transmission customers must sign a Service Agreement under the NYISO OATT and agree to adhere to NYISO policies and procedures.  NYISO must create and administer operating, billing and financial settlement procedures for Market Participants necessary to carry out its responsibilities including creating and enforcing creditworthiness standards and conducting performance audits of Market Participants.  The NYISO shall establish procedures to appoint members, other than those representing the Transmission Owners, to the Executive Committee of the NYSRC.  NYISO has broad responsibilities to approve or deny scheduling outages of generating and transmission facilities in the NY Power Market. It also oversees generation dispatch, which is required for reliability of the electric system.

2.5.2        New York State Reliability Council Agreement

The Parties, with authorization from FERC, created the NYSRC at the same time they established the NYISO. The NYSRC‘s mission is to establish and maintain Reliability Rules, protocols, and standards that the NYISO uses to perform its mission of reliable and secure operation of the NYS Power System.

The NYSRC is governed by an Executive Committee with a mission to promote and preserve the reliability of electric service on the NYS Power System. It accomplishes this by developing, maintaining and, from time-to-time, updating the Reliability Rules which must be complied with by the NYISO and all entities engaging in electric power business in New York.  The NYSRC's mission also includes monitoring the NYISO’s compliance with the Reliability Rules.

The NYSRC received necessary authorizations, regulatory approvals and rulings to give effect to this Agreement from FERC and the New York State Public Service Commission (PSC).

The NYSRC is responsible for development and on-going maintenance of a body of procedures and criteria to assure compliance with the Reliability Rules.  Standards and regulations from the electric industry and government agencies, as well as Local Reliability Rules enacted by a Transmission Owner for necessary system protection, are incorporated and applied to the entire State-wide electric system or to a particular sub-region as necessary.  Stakeholders may seek specific and limited exceptions to the criteria, provided the intent of the criteria is not compromised.

The NYSRC establishes the statewide annual Installed Capacity requirements for New York State, giving consideration to the configuration of the system, generation outage rates, assistance from neighboring systems and Local Reliability Rules.

The NYSRC and the NYISO are parties to an agreement (the “ISO/NYSRC Agreement”) to ensure that the NYISO will implement and comply with the Reliability Rules.  The NYSRC must monitor and audit the NYISO's compliance with the Reliability Rules and has authority to correct NYISO noncompliance with the reliability rules, including but not limited to dispute resolution procedures.

The NYSRC represents New York State at the North American Electric Reliability Council (NERC) and The Northeast Power Coordinating Council (NPCC) , and reviews and comments on all state-wide documents prepared by the NYISO that are filed with the NPCC and NERC.  NERC is a not-for-profit corporation whose members are ten Regional Reliability Councils. The members of these councils come from all segments of the electric industry: investor-owned utilities; federal power agencies; rural electric cooperatives; state, municipal and provincial utilities; independent power producers; power marketers; and end-use customers. These entities account for virtually all the electricity supplied and used in the United States, Canada and a portion of Baja California Norte, Mexico.  NERC's mission is to ensure that the bulk electric system in North America is reliable, adequate and secure. (New York is in the Northeast Power Coordinating Council, one of the ten NERC Councils.)

The NYSRC Executive Committee has thirteen (13) members, eight (8) from Transmission Owner members; three (3) from electric industry participants (one (1) each from Wholesale Power marketers, Large Commercial or Industrial consumers, and publicly owned electric systems); and two (2) members that are not affiliated with any Market Participant.  The NYISO Board may designate a member of its staff to participate in meetings of the Executive Committee on a non-voting basis, and non-voting representatives of the Commission and the PSC may attend meetings.  Each Member of the Executive Committee shall have substantial knowledge and/or experience in the reliable operation of bulk power electric systems, and shall serve two (2) year terms, with no limitation on the number of terms that can be served.  The Agreement prescribes methods to fill vacancies such that the nature of the Board is maintained.  The Executive Committee meets at least quarterly with nine (9) members constituting a quorum, and nine (9) votes needed to pass a measure.  The Executive Committee, which is organized with a chair, vice-chair and secretary, can employ staff, borrow employees from member organizations for specific tasks and create sub-committees to accomplish its duties.

All Reliability Rules, including Local Reliability Rules, are published, updated, and maintained in a Reliability Rules manual. Copies of this manual are available to: the NYSRC Members, the FERC, the  PSC, the NYISO, all NYISO customers, and any Market Participant that requests a copy.

Each Party to this Agreement assents to maintain and operate its portion of the NYS Power System, and conduct all agreements with non-participants, in accordance with the Reliability Rules established by the NYSRC.  Ninety (90) days written notice is required to withdraw as a Party to the NYSRC and a withdrawing party must continue to pay its share of NYSRC administrative costs for one (1) year.

NYSRC has a code of conduct with established protocols to ensure that Members shall not favor their own commercial interests in carrying out their NYSRC responsibilities; that a NYSRC Executive Committee representative cannot serve on the NYISO Board or on any NYISO Committee; and that confidential information will remain secure.  The NYSRC Agreement contains both a force majeure and limitation of liability clause.

2.5.3        Agreement Between New York Independent System Operator and New York State Reliability Council

The Agreement Between The New York Independent System Operator And The New York State Reliability Council was enacted December 1, 1999.  The purpose of this Agreement is to establish that each entity, existing by Agreement in its own right, will cooperate and comply with responsibilities, authority, rules and procedures created on behalf of each organization.

This Agreement states that while the NYISO shall exercise Operational Control over certain facilities in the NYS Power System and maintain the safety, efficiency, and short-term reliability of that System, the NYSRC’s principal mission is to establish Reliability Rules for use by the NYISO in these duties.  The NYSRC shall have the authority to audit the NYISO's implementation of the Reliability Rules and to assess the NYISO's compliance with the Reliability Rules and this Agreement.

This Agreement describes the duties of the NYISO.  It states that the NYISO shall comply with all Reliability Rules, including the Local Reliability Rules, and maintain the safety and short-term reliability of the NYS Power System.  It will administer the NYISO OATT (Open Access Transmission Tariff) and the NYISO Services Tariff in accordance with appropriate rules and Agreements.  While the NYISO cannot have a financial interest in any commercial transaction, it does require that LSEs (Load Serving Entities) within the NYCA maintain appropriate levels of Installed Capacity and must ensure that sufficient Operating Capacity is available to assure the reliable operation of the NYS Power System.  The NYISO provides the NYSRC with information and performs studies as requested.  It also prepares annual reports to the NYSRC describing the performance of the NYS Power System and the NYISO’s compliance with the Reliability Rules.

The duties of the NYSRC include development of the Reliability Rules previously discussed and monitoring and assessment of the NYISO’s compliance with the Reliability Rules.  Its staff represents New York State at meetings of the NPCC and NERC organizations.  It makes rules to ensure that sufficient Operating Capacity is always available, and it determines the state-wide annual Installed Capacity requirement for the New York Control Area.

The Agreement contains a Dispute Resolution clause which allows for NYSRC and NYISO to discuss disagreements regarding rules and procedures, etc, to attempt to work out differences, exchange written positions regarding a disagreement, and finally submit the issue to the regulatory body having authority over the specific issue in dispute (FERC or the PSC).  If submitted to the PSC, the PSC will act as an arbitrator to resolve the issue.  The Agreement also contains clauses for Limitation of Liability for the NYSRC, Force Majeure, and Indemnification.

2.5.4        Agreement Between New York Independent System Operator and Transmission Owners

The Agreement Between New York Independent System Operator And Transmission Owners (TO) was established in 1999. The TO are:  Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation, Orange and Rockland Utilities, Inc., Rochester Gas and Electric Corporation (referred to collectively as the “Investor-Owned Transmission Owners”), NYPA, and LIPA (Long Island Power Authority.

The TO have for many years built, owned, operated and charged customers for the use of the electric transmission system in New York State.  This Agreement describes the responsibilities of the Transmission Owners and the NYISO regarding ownership, maintenance, and physical operation of the transmission system including compliance by the Transmission Owners with legal, technical and financial obligations.

The responsibilities of the Transmission Owners are delineated in this Agreement:

·         Own transmission facilities over which the NYISO has Operational Control and provide notification to the NYISO with respect to actions related to other specified transmission facilities. A current version of each list is posted on the NYISO’s OASIS.

·         Operate and maintain transmission facilities in accordance with all Reliability Rules, other applicable operating instructions and NYISO procedures, including rules and procedures during an emergency.

·         Perform certain functions during an emergency that otherwise are  reserved for the NYISO.

·         Take action as necessary to maintain safe operations.

·         Maintain a continuously staffed Control Center that allows NYISO to perform its Operational Control over the facilities, and provides backup control services in the event of NYISO systems malfunction.

·         Promptly investigate outages and other adverse events and report their findings.

The responsibilities and obligations of the NYISO are also delineated in this Agreement:

·         Direct the operation of, and coordinate the maintenance scheduling of, certain facilities of the NYS Power System, including coordination with control centers maintained by the Transmission Owners.

·         Perform balancing of generation and load while ensuring the safe, reliable and efficient operation of the NYS Power System.

·         Administer various Agreements and Tariffs, including

o        The NYISO OATT (Open Access Transmission Tariff) ,

o        The NYISO Services Tariff

o        The NYISO Agreement.

·         Implement all Reliability Rules

·         Ensure that Market Participants maintain a sufficient level of Installed Capacity and Operating Capacity.

·         Maintain a FERC-accepted transmission tariff which provides for full recovery of various costs incurred by the Transmission Owners.

·         Must not hinder pre-existing transmission arrangements entered into by the TO’s.

·         Have no financial interest in any commercial transaction involving the use of the NYS Power System or any other electrical system.

·         Perform billing and collection functions for transmission services

·         Distribute collected revenues to the Transmission Owners in a timely manner

·         Enforce compliance with its creditworthiness and collection standards

·         Maintain the OASIS (Open Access Same-Time Information System) for the New York Control Area.

This Agreement sets forth methods by which the NYISO OATT, the NYISO Services Tariff and the NYISO Agreement may be modified or amended, which requires agreement by the NYISO Management Committee and the NYISO Board with authorization from FERC (absent agreement from the NYISO Management Committee, the NYISO Board may petition FERC to authorize changes under necessary or urgent circumstances).

TO that are signatories to this Agreement nevertheless retain broad rights and obligations under statutory and regulatory rulings regarding the ownership and business function of their electric system facilities.  This Agreement contains special provisions regarding facilities owned by LIPA, especially regarding the inter-tie with Connecticut. 

The NYISO cannot assign rights and obligations under this Agreement, but Transmission Owners can for reasons including (but not limited to) restructuring approved by the PSC, a merger or other change in the organizational structure provided that the surviving entity(ies) agree, in writing, to be bound by the terms of this Agreement.

This Agreement has a “ Limitation Of Liability And Indemnification”, as well as a Force Majeure provision that sets limits on a Party’s  responsibility.  Any TO may withdraw from the Agreement upon ninety (90) days written notice and with certain conditions and enduring obligations imposed.  The Agreement may be terminated by unanimous vote of the TO’s. 

2.6         NYISO Tariffs

2.6.1        Open Access Transmission Tariff 

The NYISO Open Access Transmission Tariff is also known as the New York Independent System Operator, Inc. FERC Electric Tariff Original Volume No.1.

Deregulation of the electric power industry commenced in the mid 1990’s and continues to the present day. A foundation concept to deregulation is opportunity for power market participants to have access to electric transmission services from the owners/operators of the transmission system.  This “open access” right was established by FERC in its 1996 Orders 888/889 which required each Transmission Owner to offer non-discriminatory transmission services.  Each TO is required to maintain an “Open Access Transmission Tariff” (OATT), which sets forth the rules, procedures and charges for use of the transmission system.  In New York, much of the bulk power system transmission access is obtained through the NYISO OATT, which offers access to most of the State’s electric system. Eligible customers can obtain transmission service on-line via the OASIS, an internet-based electronic bulletin board and market place for those wishing to purchase transmission service.  Customers can search out availability and price of specific transmission services that they require for their market transactions and can acquire them via the OASIS on- line. (Entities must apply and be pre-approved by NYISO to become a customer, after meeting certain obligations including good credit status). 

The OATT offers several types of transmission service, including Firm Point to Point Service, Non-Firm Point to Point Service, Network Integration Service and Special Provisions for Retail Access. 

Point-To-Point Transmission Service is for the receipt of Capacity and Energy at designated Point(s) of Receipt and the transmission of such Capacity and Energy to designated Point(s) of Delivery.  Firm Point-To-Point Transmission Service is service for which the Transmission Customer has agreed to pay the transmission congestion charges associated with its service.  Non-Firm Point-To-Point Transmission Service is service for which the Transmission Customer has not agreed to pay congestion charges.

Network Integration Transmission Service allows customers to use the entire New York power system to serve their load located in the NYCA.

Retail Access transmission service is available under the OATT to those retail customers that choose to buy electric energy and related products from suppliers under open competition rules allowed by the PSC or other authority.

If sufficient transmission capacity is not available to meet the request of a customer, the NYISO will prepare a study if requested to do so, at the customer’s expense, to determine how to create sufficient capacity to meet the requested need and how much it will cost as well as who will pay for and build the transmission system upgrade.  

Ancillary Services are needed with Transmission Service to maintain reliability of the electric system.  The OATT requires the NYISO to provide for, and the Transmission Customer to purchase, the following Ancillary Services: (i) Scheduling, System Control and Dispatch, (ii) Reactive Supply and Voltage Control from Generation Sources, (iii) Energy Imbalance, (iv) Black Start Service, (v) Operating Reserve and (vi) Regulation and Frequency Control.

The OATT also requires the NYISO to offer the following Ancillary Services only to the Transmission Customers serving Load within the NYCA: (i) Regulation and Frequency Response, and (ii) Operating Reserves. The Transmission Customers are not required to buy these services from the NYISO, but, if they are not purchased elsewhere, the NYISO is the default supplier.

The NYISO is required under this OATT to operate and maintain an OASIS.  The terms and conditions regarding OASIS and Standards of Conduct are set forth in Part 37 of the Federal Energy Regulatory Commission’s regulations (“Open Access Same-Time Information System and Standards of Conduct for Public Utilities”).  The NYISO is required to maintain an OASIS, including a Bid/Post System, for purposes of scheduling Transmission Service. Customers use the on-line system to identify available transmission capability and acquire it for their power marketing and load service purposes.  The Standards of Conduct separate providers of Transmission service from affiliated power marketers to avoid the internal sharing of market sensitive information prior to it becoming general knowledge in the marketplace.

The OATT includes certain protections for NYPA in that it specifically exempts NYPA (or NYISO on NYPA’s behalf) from providing transmission service if to do so would result in loss of the tax-exempt status of any government bonds or impair NYPA’s ability to issue future tax-exempt obligations.

The OATT has a reciprocity clause that requires a Transmission Customer taking Transmission Service under this Tariff to agree to provide itself or through corporate affiliates comparable Transmission Service to the supplier.  The OATT contains billing, collections, and payments clauses as well as force majeure, indemnity, and dispute resolution sections.  It also contains requirements for customers to meet and maintain certain requirements in regard to creditworthiness to remain eligible to purchase services under this Tariff.

2.6.2        NYISO Market Administration and Control Area Services Tariff

The New York Independent System Operator Market Administration and Control Area Services Tariff  is also known as the NYISO FERC Electric Tariff Original Volume No. 2 or the NYISO Market Services Tariff; and also the NYISO Services Tariff  (or “Tariff”).  Deregulation has given rise to new methods for the operation, administration and accounting of generation, sale and delivery of electric power in New York.    The NYISO Market Administration and Control Area Services Tariff provides for the functions (“market services”) required of the NYISO regarding administration of the sale and purchase of energy, capacity, ancillary services and demand reduction (reducing load).  This Tariff also governs NYISO’s provision of services related to ensuring the reliable operation of the NYS Power System (“control area services”).

The Tariff specifies that the NYISO shall be the sole point of application for all market services provided in the NYCA.  Each market participant that sells or purchases energy, including demand side resources, sells or purchases capacity, or provides ancillary services in the NYISO administered markets utilizes market services and must take service as a customer under the Tariff.

The Tariff establishes rules and procedures for two wholesale markets, the Day-Ahead Market and the Real-Time Market.  The Day-Ahead market allows market participants to forecast load (if they are an LSE), or determine available generation (if a generator) and inform the NYISO of their interest to buy or sell power.  The market participant submits bids to the NYISO to inform of the amount and price at which they will buy or sell.  The purpose of the Day-Ahead market is to allow NYISO to plan ahead for adequate generation for the coming day to serve the load in New York.  It also allows any market participant that wants to do so to lock in a purchase or sale price.  The NYISO calculates the Locational Based Marginal Price (“LBMP” or “market price”) for each of the 24 hours for the coming  dispatch day.  The dispatch day is that day in which the actual electrical use occurs and generation to serve it operates.  The LBMP paid to generators and paid by LSE’s may vary depending upon their location.  New York State is divided into eleven (11) zones, and the NYISO determines the proper LBMP for each location (zone).  The LBMP is the cost to provide generation to serve the next MW of load, at a specific location on the electric system in New York.  Price differences between different locations are caused by, among other things,  congestion or limitations on the transmission system.  Congestion can block lower cost power from a distant generator reaching a load in a specific location, and subsequently more expensive generation, that is not blocked from the load by congestion, might have to operate to serve the load. 

During the dispatch day, NYISO monitors the market each hour to determine if sufficient generation is available to meet load for the coming 3 hours.  Also, NYISO manages the Real-Time market and performs a load and generation forecast to determine on a five (5) minute interval basis the real time LBMP.  Generating units that are in operation, and certain meters that measure load are checked in five (5) minute intervals, and each generator that is dispatched is given instructions regarding the amount of output to produce. NYISO also calculates needed reserve generation and other products from generators needed to operate the Control Area (such as regulation and frequency response), discussed below in the section on Control Area Services.

The NYISO created and administers production, billing, accounting and financial settlement procedures for market participants necessary to carry out its responsibilities including creating and enforcing creditworthiness standards and conducting performance audits of Market Participants.

The NYISO is the New York Control Area operator and provides all necessary Control Area Services in the NYCA to maintain the safe, efficient, and continual operation of the electric system.  It provides the implementation of reliability standards and numerous other Control Area Services in accordance with the standards and criteria of NERC and NPCC and the NYSRC Reliability Rules and Good Utility Practice.  These services include developing and implementing procedures to maintain the reliability of the NYS Power System, coordinating the outage schedules for generating units and transmission facilities within NY; committing adequate generation resources to ensure the reliability of the NYS Power System, including defining the long term requirements and location of installed generating capacity requirements for New York; and taking action during abnormal or emergency conditions.

The NYISO maintains and operates a control center in order to monitor and coordinate power flows in New York and with neighboring Control Areas.  It maintains back up procedures and rules for operation under adverse and emergency circumstances and has communication and metering rules and procedures necessary to perform its function as the Control Area  Operator.

2.7         New York State Reliability Council (NYSRC)

The NYSRC was formed by agreement among the New York Transmission Owners and other interested parties. Its principal mission is to develop and monitor implementation of rules and criteria for the secure operation of the New York Bulk Power System.

2.7.1        NYSRC Reliability Rules for Planning and Operating the New York State Power System

The NYSRC document entitled “Reliability Rules for Planning and Operating the New York State Power System” (“Reliability Rules” or “Rules”), defines the required actions or system performance necessary for the NYISO and all Market Participants to comply with the Reliability Rules.  The Rules incorporate the NERC Planning Standards and Operating Policies and the NPCC Criteria, Guidelines and Procedures.  The Reliability Rules require that New York maintain sufficient surplus generation (Statewide Installed Reserve Margin Requirement) such that after due allowance for outages and deratings, the probability of disconnecting firm load due to a resource deficiency will be, on the average, no more than once in ten (10) years.  The Reliability Rules define the reliability of the NYS Power System using the following two terms:

• Adequacy – The ability of the electric systems to supply the aggregate electrical demand and energy requirements of their customers at all times, taking into account scheduled and reasonably expected unscheduled outages of system elements.

• Security – The ability of the electric systems to withstand sudden disturbances such as electric short circuits or unanticipated loss of system elements.

The NYSRC Executive Committee, described in Section 2.5.2 above, directs all NYSRC activities. Two subcommittees report to the NYSRC Executive Committee.  The Reliability Rules Subcommittee develops and updates the Reliability Rules and the Reliability Compliance Monitoring Subcommittee monitors compliance with the Reliability Rules.

The NYSRC has established an open process through which comments and proposed Reliability Rule revisions from all Market Participants and the NYISO are considered.

The NYS Bulk Power System is designed with sufficient transmission capability to withstand the outage of significant generators, transmission circuits, transformers, etc.  The Reliability Rules require analysis and simulation of the potential for these outages which includes assessment of  thermal, voltage, and stability conditions on the System.  Loss of small portions of the NYS Power System may be tolerated provided they do not jeopardize the reliability of the overall System.  Extreme events that could result in a widespread NYS Bulk Power System shutdown  are taken into account in planning for the System.  Severe weather or simultaneous loss of multiple sections of the System are examples of extreme events. NYSRC is authorized to collect data regarding the operation of generation and transmission facilities for its simulation studies. Such computer modeling, and the data that enables it, is essential for planning and operating studies used to establish statewide requirements for electric system reliability.

The Reliability Rules establish the minimum level of operating reserves to be provided in the NYCA.  Operating reserves consist of available generation, in excess of the load, which can be used to serve load in either ten (10) or thirty (30) minutes.  Both of these categories of Operating Reserves are extremely important to correct failures and outages in generation or transmission facilities and are an integral part of the operation of the electric system.

The Rules set forth methods for operating the transmission system under a variety of situations. Normal and emergency operations and conditions are described with Rules to handle them.  The Reliability Rules consider thermal (heat) limits on the transmission hardware (wires and transformers, etc), problems due to voltage levels, severe weather, solar magnetic storms, and other impediments to reliable electric service.  With guidance from these Rules, NYSRC and NYISO assess the overall reliability of the Bulk Power System for current and planned future operation.

The NYSRC document sets forth Reliability Rules and protection systems to be used by the NYISO in the event of several types of major emergencies including transmission overload, high or low voltage, and operating reserve deficiency, among others, It also contains Control Center communications rules as well as rules for system restoration in the event NYCA experiences a partial or system-wide shutdown, including requirements for system black start capability. (The Project is one of the few generators in New York paid for black start capability.)

2.7.2        The NYSRC Stakeholders

The NYSRC Stakeholders include primarily the NYSRC Executive Committee and staff, the NYISO and the 1999 Parties to the NYSRC Agreement ( see Section 2.5.1 and 2.5.2 above). However other stakeholders include FERC, the New York Public Service Commission, all NYISO customers, and any eligible Market Participant.

 

Table 2.5.1-1

Governance of New York State Independent Operator Sectors and Voting Share

Sector

Voting Share

Generator Owners

21.5%

 

Other Suppliers

21.5%

 

Transmission Owners

20.0%

 

End Use Consumers (5 sub-sectors)

20.0%

 

Public Power (3 sub-sectors)

17.0%

 

Total

100.0%

 

Governance of the New York Independent System Operator

Sub-Sectors and Voting Share

End Use Consumers - 5 Sub-Sectors

20.0%

 

 - Government Advocate and Retail Aggregators

1.8%

 - State-Wide Advocate

 

2.7%

 - Small Consumers

 

4.5%

 - Large Consumers - Industrial

 

9.0%

 - Large Consumers - Government

 

2.0%

 

 

 

Public Power - 3 Sub-Sectors

17.0%

 

 - Power Authorities

 

8.0%

 - Municipal and Co-op Electric Systems

 

7.0%

 - Environment

 

2.0%

 

3.0     PROJECT OPERATIONS, OUTPUT, AND PRODUCTS SOLD IN THE REGIONAL POWER MARKETS

3.1         Project Operations, Production and Distribution of Output Prior to the NYISO Electric Markets

The New York Power Pool (“NYPP” or “the Pool” ) was established in the mid-1960’s and until 1999 functioned as the Control Area operator and performed many planning duties for the Bulk Power System in New York.  NYPA became a participant in the NYPP in 1967.  The Pool performed scheduling and dispatch functions in the Control Area  and managed a “share of the savings” arrangement where the electric utilities worked together to improve efficiency, reduce costs and  operate the electric system in an integrated manner.  NYPA obtained forecasts of customer load and scheduled Project generation to match.  The NYPP managed any variations between actual generation and customer load. 

3.1.1        Functions of the New York Power Pool

The first and primary duty of NYPP was to reliably operate the electric system to maintain its security and integrity.  Part of the NYPP operational duties included a balancing function that would identify and correct for too much or too little generation scheduled in any areas of New York.  Utilities scheduled their generation to meet both their load and any bilateral power sales they may have entered into with another utility. NYPP also had oversight for maintaining Ancillary Services  for reliable system operation.  As a part of its function of overseeing the electric operations of the entire NYCA, NYPP would implement its own reliability rules to maintain adequate operating reserve, voltage support and frequency control.  The Pool also provided scheduling, system control and dispatch services which are necessary for a Control Area to function.  Both the cost and performance of these Services were bundled in to the output of the New York generating units and were not treated as separate products for purchase and sale.  Likewise there were no separate billings or payments for individual services. The total cost of operating the system was paid by consumers in their bundled electric bills.

The second purpose of the NYPP was to provide an increased economic efficiency in the dispatch of generation to serve the New York load.  The Pool provided the actual dispatch orders that determined if and when a generating unit would operate and the level of output each unit would be required to produce.  The advantage of central dispatch was that NYPP, unlike any single participant utility, was provided an overview of the entire NYCA system including forecasted load, availability and cost of generation, and transmission conditions.  The Pool dispatch of the entire system was more efficient than the individual utilities performing their own separate dispatch, and this efficiency resulted in significant savings that were shared among the utilities.  Savings were created when the Pool reduced output from a generating unit with relatively more expensive fuel and called upon a unit with less expensive fuel to operate, even if the cheaper plant was owned by another utility.  The NYPP kept track of such operations and provided monthly billing statements incorporating hour-by-hour settlement of all such transactions, by generating unit, for the utilities regarding purchases and sales of energy. 

3.1.2        Project Operations and Production Prior to NYISO Electric Markets

Prior to the institution of the NYISO markets in 1999, each NYPP Participant was responsible for forecasting its customer loads and bilateral power sales to other utilities.  In addition, each utility was responsible for scheduling its own generation to meet that load and notifying NYPP of such forecasts, sales and schedules.  NYPP assessed the load and generation resources and made decisions regarding commitment to operate generation.  Operating curves and other pertinent data were made available from each generating unit to assist the NYPP with this dispatch task.

The Niagara Project was scheduled and operated to efficiently and reliably meet its customers’ electric power needs, in the context of the NYPP structure.  The Project was always scheduled to meet the customer load, a forecast of which was provided to the NYPA Control Center near Utica.  If, for example, the combined forecast of all customers load during an off-peak period was 1,200 MW, the Project would be scheduled to produce that same amount of power. Likewise if the sum of all customer forecasts of load was 2,200 MW during an on-peak period, the Project was scheduled to produce at that level.  Unlike more recent times with the advent of the competitive power market (as described in Section 3.2), prior to 1999 the Niagara Project (with some back up from other NYPA generation as described below) was responsible for producing on an hour by hour basis the electric power its customers had contracted to buy with any hourly excess available for opportunity sales in the economy market. 

Hourly forecasts of load, and resulting schedule for generation to meet that load, were produced  and agreed on with the utilities in whose territories the customers were located. These schedules were routinely  shared with the NYPP.  The Project was scheduled daily to meet the hour-by-hour load for the following day.  NYPA developed and implemented an internal mechanism to resolve any shortfall it might have between obligation to sell power to customers and output of the Project. In fact, this internal energy transfer protocol affected not only Niagara but all of the NYPA generation facilities around the State.  If short at one generating plant, NYPA would perform internal energy transfers from its other units that had energy available but was not needed at that time for sales to customers.  NYPA established and maintained an internal accounting and settlement procedure to account for the source and sale of electrical output from its generating units.  In addition to inter-project transfers, NYPA supplemented its power supplies through bilateral purchases from other utilities.  These purchases typically varied in size and duration as then current needs dictated.  

3.1.3        Project Customers and Distribution of Project Output Prior to the NYISO Market

Sales from the Niagara Project continue to reach Preference customers (Municipal and rural cooperative customers within New York and in seven neighboring states), Replacement and Expansion Power customers (sold to Niagara Mohawk and NYSEG) and residential customers (also sold to Niagara Mohawk,  NYSEG and Rochester Gas and Electric) (Table 3.1.3-1).  Table 3.1.3-2 shows the Firm Allocation of the Project power.

Prior to the creation of the NYISO market as described in Section 3.1.2, the Project (or NYPA through inter-project transfer and/or bilateral purchases) had to provide the full quantity of energy to meet its customer’s load on an hour-by-hour basis.  Project generation was precisely scheduled to match load forecasts. 

When the Project generation schedule did not match its customer load precisely, the Pool helped to optimize and balance generation and load within each local utility system.  During actual production of surplus, the NYPP would treat the over production as a “control error” and reduce output from the most expensive unit operating on the NYCA system to correct for it.  The Project output was usually not backed down because hydroelectric power was low cost as compared to other sources.

3.2         Current Project Operations, Production and Distribution of Output in Relation to NYISO Electric Markets.

In 1999, the NYISO was created to administer the New York electric power system and markets as part of a process that led to the restructuring and partial deregulation of the electric power industry in New York.  The advent of new methods of managing the markets along with the new market administrator altered the operations and output of the Project. The familiar practice of forecasting load continues as in the pre-NYISO time period, but the Project generation is no longer linked directly solely to the loads of Project customers.  Currently, the Project is required to submit competitive bids to the NYISO along with the rest of the New York generation.  NYISO dispatches generation, including the Project, based upon these market bids not (as was done in the past) upon the forecasted schedules of NYPA customer load.  While the Project still produces energy, capacity and ancillary services, the selection process is different and the timing and quantities of Project generation can be quite different from what would have been the case in the NYPP environment.

3.2.1        Current Project Operations and Production in relation to NYISO Electric Markets

The Project is an integral part of the Bulk Power System that the NYISO controls and operates, and the NYISO administers dispatch of all Power Authority hydroelectric facilities, including the Project.  NYPA complies with the NYISO administered market rules for selection and operation of generation.  Based upon its forecasts of river flows, NYPA submits energy price bids into the NYISO Day-Ahead and Real-Time Markets, making the Project generation available to serve New York load.  In doing so it qualifies for Day-Ahead and Real-Time settlement and is eligible for capacity (ICAP) payments from the market. See Table 3.2.1-1 for data on revenues from capacity sales to the NYISO market and other parties. The Project is bid into the market in a manner designed to use available river water and storage water in the Lewiston Reservoir as efficiently as possible so as to maximize the benefits to NYPA’s customers and statewide consumers generally, all in a manner consistent with NYPA’s statutory mission and prudent operating practices. 

The Lewiston Pump Generating Plant (LPGP) has a weekly cycle for pumped storage.  Typically, NYPA begins a week with a full reservoir on Monday morning and by generating throughout the week draws down water to low levels by Friday evening.  The reservoir is re-filled over the weekend, making it ready for the next weekly cycle.  NYPA manages the drawdown schedule through the NYISO market bid process, with fine-tuning in the Real-Time market. Re-bids in real time can be lowered should river flows surpass forecasts, thus making more power available than anticipated.  NYPA can lower its bid price for real time operation to increase likelihood that NYISO will select it to operate.

The Ancillary Services produced by the Project are sold into the market administered by the NYISO, and NYPA is paid for them through market settlement.  The Project produces all of the Ancillary Services that can be sold in the NYISO market, including Operating Reserves, Voltage Support, Regulation and Frequency Response and Black Start.  Voltage Support and Black Start are sold at cost-based rates under the NYISO tariff, while the other services are bid into the market. Table 3.2.1-1 provides data on sales of Ancillary Services to the NYISO and associated revenues to the Power Authority.  

NYPA provides the NYISO with schedules for bilateral sales and payment from the market settlement excludes energy deliveries associated with these bilateral sales. Customers pay NYPA directly in the case of bilateral sales which, in the case of the Project, represents most of the output.  In the past, Niagara was run every hour of every day to match customer load, all of which was scheduled ahead of time.  Now, NYISO controls the dispatch and if the market price (LBMP) is cheaper than the Niagara bid the Project will not be called upon to generate. In this case NYPA buys energy from the market to serve its customers load and in some cases additional purchases may even be made to pump water into the LPGP reservoir.  Should the Project’s obligation for bilateral sales exceed the KWh output in one or more hours of a month, NYPA purchases energy from the market to serve that load and pays for it through the monthly settlement process at the LBMP for the New York West Zone (the zone in which the Project is located). Should bilateral sales be less than Project output in one or more hours of a month, the excess energy is sold to the market at the LBMP for the West Zone. With the advent of the NYISO, NYPA no longer maintains an internal energy transfer protocol among its various generators.  The bilateral sales schedules do not affect the NYPA bidding strategy nor the NYISO selection strategy in its dispatch of generation as this selection is performed to meet the needs of the electric system as a whole, not individual customer needs.  Table 3.2.1-1 contains data regarding these purchases from, and sales to, the NYISO market.

3.2.2        Project Customers and Current Distribution of Project Output in the NYISO Market

The commencement of the NYISO power markets did not alter NYPA’s contractual obligations to sell power to certain customers.  It did, as discussed above, alter the physical dispatch of NYPA’s generation.  NYPA’s contractual obligations are still scheduled on a weekly and daily basis based upon forecasts of their load. The energy to meet that load comes either from the Project generation, the NYISO market, or both.

Supplying energy to meet forecasted customer needs is still NYPA’s responsibility, and NYPA continues to bill and collect payment from its customers.  When the Project  produces power it is credited to the customer accounts in the NYISO settlement process. The settlement supplies KWh production of the Project netted against scheduled bilateral sales to the Customers.  The settlement informs NYPA of the volume of energy supplied each customer from both the Project generation and purchases from the market. In addition, settlement provides information on sales of energy from the Project to the NYISO market, and the net dollar transfer for NYPA’s purchase from and sale to the NYISO market.

Ancillary Services are provided through the NYISO market mechanism and billed to customers through the LSE’s.  At the present time the Market Rules do not allow the self-supply of Ancillary Services, so these services are purchased and resold exclusively through the NYISO administered market. The total cost of all Ancillary Services in the NYCA is calculated by NYISO and billed out on a load proportion basis. 

Table 3.1.3-1

Allocation of Niagara Power by Category

 

PREFERENCE POWER

According to Federal law, “in disposing of” 50% of the firm power output from the Niagara Project, “preference and priority are to be given to public bodies and non-profit cooperatives within economic transmission distance.”  The law further requires that of this 50% of firm project power, no more than 20% is required to be available  “for use within reasonable economic transmission distance in neighboring states.”

 

REPLACEMENT POWER

 Through December 31, 2005, the Authority is required by federal law to supply 445 MW of Project power to the Niagara Mohawk Power Corporation to replace the power that industrial customers had received from NMPC’s Schoellkopf and Adams plants. New York State has just enacted legislation to continue selling up to 445 MW of Replacement Power to businesses that meet criteria established in the state law.

 

 

EXPANSION POWER

State law mandates the allocation of 250 MW of firm power output “as ‘expansion power’ to businesses within the State located within thirty miles of the Niagara project. . . .”

RESIDENTIAL SALES TO INVESTOR-OWNED UTILITIES

Consistent with the provisions of the Power Authority Act and the NRA, _301MW of Firm and 360_MW of Peaking Power from the Project are sold to Niagara Mohawk, NYSEG and RG&E for resale without profit to the utilities residential customers.

This table summarizes the federal and state statutes governing the allocation of Niagara Power.  The abbreviation MW indicates megawatts.

Table 3.1.3-2

Allocation of Firm Niagara Power

Item

Preference Power

Replacement Power

Expansion Power

Private Utilities

Firm Power Sales

New York State

Other States

MW

752

188

445

250

301

1,936

Share of Total

39%

10%

23%

13%

16%

100%

This table details the allocation of Niagara Power.  The total allocation represents firm power sales, as determined by the Federal Energy Regulatory Commission.  Firm power output is allocated in accordance with the Niagara Redevelopment Act and applicable State law.  Actual plant output fluctuates due to factors such as seasonal variations in available water. (Percentages rounded.)

Table 3.2.1-1

Niagara Project Transactions with the NYISO Market
(Energy, Capacity, and Ancillary Services)

 

2002

2003

2004

 

$

Mwh

$

Mwh

$

Mwh

Energy Sales to the NYISO

 

 

 

 

 

 

Energy Sales (Generator)

 $     47,955,068

       1,588,723,463

 $     81,663,493

      1,781,144,535

 $  81,196,422

      1,826,346,087

Energy Sales (LSE)

 $       2,396,947

            78,144,835

 $       3,774,655

          99,788,406

 $  10,496,568

         228,577,546

Gen-Supp Bid Prod. Cost Guarentee

 $         227,956

                         -  

 $             3,573

                       -  

 $         24,367

                       -  

Total Energy Sales to NYISO

 $     50,579,971

       1,666,868,298

 $     85,441,721

      1,880,932,941

 $  91,717,357

      2,054,923,633

 

 

 

 

 

 

 

Energy Purchases from NYISO

 

 

 

 

 

 

Energy Purchases (Generator)

 $  (173,389,084)

      (5,862,758,072)

 $  (220,672,001)

     (5,199,844,435)

 $(164,534,955)

     (4,065,507,736)

Energy Purchases (LSE)

 $      (5,093,652)

         (133,471,863)

 $    (20,741,814)

       (431,250,230)

 $   (6,567,653)

        (130,252,307)

Energy Purchases (Internal)

 $   137,638,396

       4,273,389,000

 $   160,678,538

      3,374,602,000

 $ 142,137,079

      3,138,438,000

Total Energy Purchases from NYISO

 $    (40,844,340)

      (1,722,840,935)

 $    (80,735,277)

     (2,256,492,665)

 $ (28,965,529)

     (1,057,322,043)

 

 

 

 

 

 

 

Ancillary Services Revenues

 

 

 

 

 

 

Reactive & Voltage

 $       2,429,780

 

 $       2,771,060

 

 $    2,544,666

 

Operating Reserve

 $       3,989,506

 

 $       6,689,432

 

 $    4,310,011

 

Regulation & Frequency Response

 $     29,055,148

 

 $     47,725,721

 

 $  30,691,387

 

Black Start

 $           64,825

 

 $           85,716

 

 $         64,826

 

Ancillary Services Revenues Sum

 $     35,539,259

 

 $     57,271,929

                       -  

 $  37,610,890

                       -  

 

 

 

 

 

 

 

Table 3.2.1-1 (CONT.)

Niagara Project Transactions with the NYISO Market
(Energy, Capacity, and Ancillary Services)

 

2002

2003

2004

 

$

MW-Months Sold

$

MW-Months Sold

$

MW-Months Sold

Capacity Sales Revenues

 

 

 

 

 

 

Sales to NYISO

 $       4,081,595

                 2,393.5

 $                  -  

 No MW sold

 $    1,046,175

909

Sales to Other Parties

 $         104,615

                    259.7

 $                  -  

                       -  

 $               -  

                       -  

Total Capacity Sales Revenue

 $       4,186,210

                 2,653.2

 $                  -   

                       -  

 $    1,046,175

909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

Mwh/Mw-Months

$

Mwh/Mw-Months

$

Mwh/Mw-Months

Net Transactions with NYISO

 

 

 

 

 

 

Energy(Mwh)

 $       9,735,631

           (55,972,637)

 $       4,706,444

       (375,559,724)

 $  62,751,828

         997,601,590

Ancillary Services

 $     35,539,259

 

 $     57,271,929

 

 $  37,610,890

 

Capacity (mw-Months)

 $       4,186,210

                    2,653

 $                  -  

                       -  

 $    1,046,175

                     909

Total Net Transactions with NYISO

 $     49,461,100

 

 $     61,978,373

 

 $ 101,408,893

 

 

1.0     NIAGARA PROJECT CAPABILITY, EFFICIENCY, UTILIZATION, RELIABILITY, AND POTENTIAL UPGRADES

1.1         Project Capability, Efficiency, Utilization and Reliability

1.1.1        Project Capability

The Niagara Project is rated at 1,880 MW of firm output.  However, it has a Net Dependable Capacity of 2,400MW, available over a four (4) hour period on week days. (Table 4.1.1-1).  Robert Moses has 13 units each originally with a maximum output of 175 MW, and now has 10 of the 13 units upgraded to 200 MW maximum peak output.  The remaining three units will be upgraded by 2006.

The LPGP has 12 units nominally rated at 20 MW each for a total capacity rating of 240 MW.

1.1.2        Project Efficiency

Generating efficiency for the LPGP units range from 75%  at minimum operating head of 60 feet to  a high of nearly 90% at a head of 100 feet.  (67% variation in operating head) (Figure 4.1.2-1).  Robert Moses has a much smaller percent variation in operating head from 274 feet to 320 feet or 17% variation.  Efficiency is also much smaller range than LPGP with about an 87% to 93% range on the original equipment, depending upon volume of water flows used for generation.  The majority (10 of 13) of the RM units have already been upgraded and repaired and show slightly higher efficiency (1 to 2 %) with ranges from approximately 88% to 94%.  Figures 4.1.2-2, 4.1.2-3, 4.1.2-4, and 4.1.2-5 show the discharge of water at varying gross head for the Robert Moses plant.  Figures 4.1.2-6 and 4.1.2-7 show the variation of output of generating units at the Robert Moses plant with varying head.  Figures 4.1.2-8 and 4.1.2-9 show river flow data for the Niagara River

1.1.3        Project Utilization

The low cost hydropower at the project is sold to municipally owned electric systems and rural electric cooperatives throughout New York State, to Western New York businesses, to neighboring states under federal requirements and to three upstate private utilities (Niagara Mohawk, New York State Gas & Electric and Rochester Gas & Electric) for resale to their residential customers.  The power sold through municipally owned electric systems and rural cooperatives is sold on a nondiscriminatory basis to all customers served by such systems.

1.1.4        Project Reliability

The Project has high reliability and as such is an asset to both the Power Authority and the NYISO.  The nature of hydroelectric generation involves low temperatures and relatively slow speeds in the turbine-generator equipment, thus a high availability is anticipated.  The entire Project has a historical  forced outage rate of less than 1%, with RMNPP near 0.2% and LPGP at around 1.0%.  Power Authority records show the Project has a unit availability of nearly 90%, with 89.65% available for Robert Moses and 89.1% availability for LPGP.  The RMNPP station has had one unit out for scheduled upgrade and repair since the early 1990’s. Each unit outage for a year reduces unit availability by about 7.5%.  

1.1.5        Current Upgrade

1.1.5.1       Upgrade of the Project

Beginning in the early 1980s the Power Authority undertook a series of studies to increase the capability of the project to produce electricity, especially during peak periods.  Originally, a plan was developed that involved the construction of new underground powerhouses at both Robert Moses and LPGP.  This plan included the addition of approximately 1.2 billion KWh to peak period production by storing water that otherwise would have been used to generate power at night when electricity demand was low.  The proposed 4 unit addition to the project, which would have cost as much as one billion dollars would have allowed NYPA to replace relatively expensive oil fired generation at times of peak demand with lower cost hydro power.

Recognizing that building a new underground powerhouse would be very costly and would have major environmental effects, and knowing there had been significant improvements in turbine design, the Power Authority evaluated the feasibility of upgrading the existing generating equipment.  The Authority concluded that it would be feasible to upgrade the existing units at Robert Moses, and adopted a plan to rehabilitate and upgrade the 13 units.  The major effect of the current upgrade has been to increase peaking capability of the Project, and an increased discharge capability at Robert Moses from 102,000 cfs to 115,000 cfs thereby eliminating a restriction on LPGP usage during peak times.  This results in increased weekday nighttime pumping at LPGP and a corresponding reduction  in weekday nighttime generation at Robert Moses.  There has been very little change in the weekend operation as a result of the upgrade.

The upgrade considered in the 1980’s at LPGP was not pursued due to economic considerations. In the early part of this decade the Power Authority undertook another evaluation of the LPGP upgrade, hiring Acres International Corporation which produced a report entitled Plant Upgrade Feasibility Study in October, 2004. The study evaluated the LPGP's effect on NPP operation as well as identified the incremental capacity and re-timed energy that might be produced by an LPGP upgrade. Also, it assessed whether economic development power for WNY could be provided by an LPGP upgrade and whether such an upgrade would be economically justified. The conclusions of this study are that the LPGP is an integral part of the NPP and that an upgrade of the LPGP would provide a shift in off-peak to on-peak generation, increasing peak period generation while decreasing off-peak period generation. However, this would result in a reduction in overall generation and would provide no increase in baseload capacity. Also an upgrade of the LPGP would not provide new hydropower for economic development in WNY. Finally, the 2004 study concluded that an upgrade of the LPGP is not economically justified.

1.1.6        Impact of Project Upgrade Over Term of New License

In 1990 NYPA began the program designed to upgrade the 13 Robert Moses units. Over time the effort evolved into major maintenance of the units due to normal wear and tear of 35 + years of operation.  The upgrade in capability, which includes new turbines, will permit generation of  more electricity at times of peak demand.  To date 10 units have been upgraded from the original nameplate capacity of 167 MVA, 150 MW @ 0.9 power factor to 215 MVA, 193.5 MW @0.9 power factor.  As a result of the upgrade the peak capacity will be increased from approximately 175 MW per unit to approximately 200 MW per unit, with efficiency improvements of 1-2% realized.

A slight increase of 1-2% in efficiency is expected, allowing approximately 250,000 MWh additional on-peak generation per year.  This upgrade represents a more efficient use of diversion water and increases on-peak electrical production (even though decreasing off-peak production).  It is anticipated that the efficiency improvement of 1-2% may increase the firm capability of the Project by approximately 35 MW.  Once the upgrade is complete and all units are back on line and the Power Authority has performed an assessment of firm power available, any additional firm power will be allocated to customers according to the requirements of the NRA.

Table 4.1.1-1

Total MWh Summary

Year

Robert Moses Niagara Power Plant Generation

Lewiston Pumped Generating Plant

Gross Generation

Lewiston Pump Generating Plant Pumping

Net Project Generation

Cumulative Generation

1961

7,283,494

3,281

7,286,775

11,716

7,275,059

7,275,059

1962

11,598,451

247,392

11,845,843

357,715

11,488,128

18,763,187

1963

10,458,789

395,503

10,854,292

569,500

10,284,792

29,047,979

1964

10,074,897

409,368

10,484,265

606,407

9,877,858

38,925,837

1965

11,612,022

414,578

12,026,600

616,817

11,409,783

50,335,620

1966

12,751,311

420,773

13,172,084

627,398

12,544,686

62,880,306

1967

13,875,638

418,458

14,294,096

637,619

13,656,477

76,536,783

1968

14,906,019

397,205

15,303,224

601,619

14,701,605

91,238,388

1969

16,199,494

477,095

16,676,589

737,366

15,939,223

107,177,611

1970

15,250,722

553,885

15,804,607

846,764

14,957,843

122,135,454

1971

15,162,825

593,897

15,756,722

904,406

14,852,316

136,987,770

1972

16,203,958

516,530

16,720,488

797,774

15,922,714

152,910,484

1973

17,798,910

402,362

18,201,272

655,818

17,545,454

170,455,938

1974

17,917,435

320,349

18,237,784

540,258

17,697,526

188,153,464

1975

17,764,366

361,043

18,125,409

599,168

17,526,241

205,679,705

1976

17,663,407

351,153

18,014,560

587,413

17,427,147

223,106,852

1977

15,631,245

406,453

16,037,698

648,445

15,389,253

238,496,105

1978

16,454,214

353,305

16,807,519

587,234

16,220,285

254,716,390

Table 4.1.1-1 (CONT.)

Total MWH Summary

Year

Robert Moses Niagara Power Plant Generation

Lewiston Pumped Generating Plant

Gross Generation

Lewiston Pump Generating Plant Pumping

Net Project Generation

Cumulative Generation

1979

16,557,346

368,175

16,925,521

614,972

16,310,549

271,026,939

1980

17,356,075

353,314

17,709,389

596,699

17,112,690

288,139,629

1981

16,608,879

381,302

16,990,181

633,325

16,356,856

304,496,485

1982

16,242,896

347,875

16,590,771

582,776

16,007,995

320,504,480

1983

17,024,490

357,865

17,382,355

604,678

16,777,677

337,282,157

1984

17,047,629

304,611

17,352,240

520,954

16,831,286

354,113,443

1985

17,676,816

296,866

17,973,682

506,616

17,467,066

371,580,509

1986

18,406,318

194,895

18,601,213

315,905

18,285,308

389,865,817

1987

17,970,258

255,122

18,225,380

421,985

17,803,395

407,669,212

1988

15,205,366

360,000

15,565,366

592,377

14,972,989

422,642,201

1989

14,938,247

459,291

15,397,538

761,972

14,635,566

437,277,767

1990

15,668,824

426,286

16,095,110

708,634

15,386,476

452,664,243

1991

15,582,714

393,318

15,976,032

653,558

15,322,474

467,986,717

1992

15,680,108

404,958

16,085,066

678,381

15,406,685

483,393,402

1993

17,020,984

402,371

17,423,355

669,507

16,753,848

500,147,250

1994

15,912,829

466,766

16,379,595

775,979

15,603,616

515,750,866

1995

15,413,691

502,042

15,915,733

839,704

15,076,029

530,826,895

1996

15,846,377

496,024

16,342,401

805,420

15,536,981

546,363,876

1997

17,588,674

350,835

17,939,509

511,173

17,362,336

563,726,212

Table 4.1.1-1 (CONT.)

Total MWH Summary

Year

Robert Moses Niagara Power Plant Generation

Lewiston Pumped Generating Plant

Gross Generation

Lewiston Pump Generating Plant Pumping

Net Project Generation

Cumulative Generation

1998

17,008,564

376,717

17,385,281

617,687

16,767,594

580,493,806

1999

13,252,091

542,724

13,794,815

882,661

12,912,154

593,405,960

2000

12,685,195

582,825

13,268,020

918,925

12,349,095

605,755,055

2001

12,046,473

573,774

12,620,247

934,172

11,686,075

617,441,130

2002

13,562,310

540,773

14,103,083

893,717

13,209,366

630,650,496

2003

12,537,732

564,481

13,102,213

922,921

12,179,292

642,829,788

2004

14,227,347

575,379

14,802,726

934,716

13,868,010

656,697,798

2005 YTD

6,633,503

216,091

6,849,594

337,982

6,511,612

663,209,410

 

 

 

 

 

 

 

TOTAL

674,308,933

18,137,310

692,446,243

29,170,833

663,209,410

 

AVG

15,357,952

416,696

15,774,648

670,259

15,102,854

 

MAX

18,406,318

593,897

18,601,213

934,716

18,285,308

 

MIN

10,074,897

194,895

10,484,265

315,905

9,877,858

 

Note: Minimum and Average year statistics do not include 1961 or 2005, which are partial years.

 

Figure 4.1.2-1

Lewiston Pump Generating Plant, Performance Curves

 

 

Figure 4.1.2-2

Robert Moses Niagara Power Plant Original Turbines, Gross Head vs. Discharge

 

 

Figure 4.1.2-3

 Robert Moses Niagara Power Plant Upgraded Turbines, Gross Head vs. Discharge

 

 

Figure 4.1.2-4

Robert Moses Niagara Power Plant Thirteen Upgraded Turbines, Gross Head vs. Discharge

 

 

Figure 4.1.2-5

Robert Moses Niagara Power Plant Thirteen Upgraded Turbines, Gross Head vs. Output

 

 

Figure 4.1.2-6

Robert Moses Niagara Power Plant Existing Turbines – Gross Head vs. Unit Output

 

 

Figure 4.1.2-7

Robert Moses Niagara Power Plant Upgraded Turbines – Gross Head vs. Unit Output

 

 

Figure 4.1.2-8

Annual Flow-Exceedance Curve of Niagara River for the Period 1900-1999

 

Figure 4.1.2-9

Niagara River Average Monthly Flows

 

2.0     INTERNATIONAL COOPERATION ON NIAGARA RIVER RESOURCES

2.1         International Niagara River Water Diversion Treaty

The 1950 Treaty allocates water for scenic flows over the Falls, and provides for sharing of the Niagara River water between the United States and Canada for power production, less the amount of water used and necessary for domestic and sanitary purposes and for the service of canals for the purposes of navigation. The Treaty also provides for civil works to produce an even flow over the entire crest of the Falls.  . It also terminated certain parts of older treaties with Great Britain and Canada that regulated the flows and diversions of water from the Niagara River.

The Treaty establishes minimum flows for scenic purposes, and does not allow diversion of water for power purposes “…which will reduce the flow over Niagara Falls to less than one hundred thousand cubic feet per second each day between the hours of eight a.m., E.S.T., and ten p.m., E.S.T., during the period of each year beginning April 1 and ending September 15, both dates inclusive, or to less than one hundred thousand cubic feet per second each day between the hours of eight a.m., E.S.T., and eight p.m., E.S.T., during the period of each year beginning September 16 and ending October 31, both dates inclusive, or to less than fifty thousand cubic feet per second at any other time….”  Water in excess of this amount, less the amount of water used and necessary for domestic and sanitary purposes and for the service of canals for the purposes of navigation, may be diverted for power production and shared equally by the U.S. and Canada.

The Treaty has provisions to increase flows over the Falls when additional water is required for flushing ice above the Falls or through the rapids below the Falls, and prohibits the diversion of water for power purposes downstream of the Falls to Lake Ontario.  Finally, it provides for cooperation by both countries to determine and record water available for purposes of this Treaty and the amounts used for power diversion.

2.2         International Joint Cooperation

2.2.1        The International Joint Commission (IJC)

The International Joint Commission (IJC) is an independent binational organization established by the Boundary Waters Treaty of 1909. The IJC is comprised of six commissioners, with three (3) commissioners serving from each country.  Its purpose is to help prevent and resolve disputes relating to the use and quality of boundary waters and to advise Canada and the United States on related questions.  In particular, the IJC rules upon applications for approval of projects affecting boundary or transboundary waters and may regulate the operation of these projects.  It alerts the governments to emerging issues along the boundary that may give rise to bilateral disputes.  The IJC was asked to help implement the 1950 Niagara Treaty by overseeing the design, construction and operation of works in the Niagara River that control the level of the Chippewa-Grass Island Pool. The IJC also oversees the annual installation of an ice boom that is designed to reduce ice jams in the Niagara River. It ensures that interests in both countries are protected regarding these facilities.  Figure 5.2.1-1 shows the types and locations of structures on the Upper Niagara River.

2.2.2        The International Niagara Board of Control (INBC)

The International Niagara Board of Control (“INBC” or “Board”) was established by the IJC in 1953 to provide advice on matters related to the IJC’s responsibilities for water levels and flows in the Niagara River.  The Board's main duties are to oversee water level regulation in the Chippewa-Grass Island Pool and installation of the Lake Erie-Niagara River Ice Boom.  The Board also collaborates with the International Niagara Committee, a body created by the 1950 Niagara Treaty to determine the amount of water available for the Falls and power generation.

The Board currently has four (4) members from the U.S. and three (3) from Canada.  Three (3) U.S. members are from the U.S. Army Corps of Engineers and one (1) is from the FERC staff. The Canadian representatives are from the Meteorologic Service of Canada, the Ministry of Natural Resources, and Environment Canada.  It meets at least twice a year and provides semi-annual progress reports to the IJC.  The Board also produces an annual report on the operation of the Lake Erie-Niagara River Ice Boom and holds an annual public meeting to provide information and receive input from all interested persons.

2.2.3        International Niagara Working Committee

The International Niagara Working Committee (INWC), under the auspices of the International Joint Commission collects ice cover data to assess the ice conditions on Lake Erie and the Niagara River.  At the beginning of the ice season, the ice cover for Lake Erie is evaluated through satellite observations.  Ice reconnaissance flight and surveys are undertaken during the later part of the ice season when more detailed information is required.  Ice conditions are reassessed every 1 to 4 weeks throughout the ice season.

The INWC has prepared a report each year since 1964 (the first year the Ice Boom was installed) to discuss ice conditions.  The most recent Report, dated November 2003,  discusses:

·         Operations of the ice boom including installation, ice and hydrometeorlogical conditions, opening and removal, power loses, shore property damages and boom maintenance.

·         Data Analyses such as forecast of commencement of seasonal rise in water temperature, forecast of date of last ice and area of ice cover at time of boom opening.

·         Back up data and supporting information regarding the ice boom, related ice cover, impact on power production and other matters as described in the following Appendices:

o        Appendix A - Description of the Lake Erie-Niagara River area regarding hydraulics and hydrology, hydroelectric installations and remedial works, other shore installations and ice problems.

o        Appendix B - Background Information on the Ice Boom including authorization for placement, purpose and description.

The report contains tables on Lake Erie at Buffalo water temperatures, air temperatures at Buffalo Airport, ice observations-eastern basin of Lake Erie, ice related energy production losses, dates of last ice, forecasts of water temperature rise and dates of last ice, comparison of ice areas near time of boom opening and comparative data for years ice boom has been in use.

Figures include observed ice cover on the eastern basin of Lake Erie close to boom opening, plan view of ice boom and sequence of removal, Great Lakes drainage basin, Niagara River location map, Niagara River diversion structures and power plants, map of eastern Lake Erie, Map of the upper Niagara River and structural details of the Ice Boom.

2.2.4        Niagara Joint Works Committee

Niagara Joint Works Committee (formerly the Niagara Works Committee) is authorized to do routine maintenance, investigate the need for additional maintenance, assess the need for changes in methods of operation of Joint Works, and other matters.  The Committee establishes an annual budget for such maintenance. Decisions are made by unanimous agreement with disputes referred to management of the respective power entities (the Power Authority and Ontario Power Generation (OPG, formerly Ontario Hydro)).  The Committee may establish a Working Committee to review operation , maintenance and related budgets and expenditures.

2.2.5        International Niagara Committee

The International Niagara Committee (INC) is not a part of the IJC.  In accordance with the 1950 Treaty, a representative was appointed by each government “who, acting jointly, shall ascertain and determine the amounts of water available for the purpose of this treaty, and shall record the same, and shall also record the amounts of water used for power diversions.”  In 1955, the two governments officially designated representatives to the International Niagara Committee. The Committee members currently represent the U.S. Army Corps of Engineers and Environment Canada.  The INC performs the following:

·         Weekly power plant inspections and review of hydropower operations reports;

·         Monitoring water level gage data to assure compliance with all provisions of the treaty;

·         Prepare Annual Reports to the U.S. State Department and Canadian Trade and Foreign Affairs documenting water records and explaining Falls flow violations.

2.3         Niagara Joint Works Agreement Memorandum of Understanding

2.3.1        Operating Memorandum of Understanding

This Memorandum Of Understanding between NYPA and Ontario Hydro (now OPG) dated October 2, 1998 consolidates several previous agreements between the parties including the Oct 26, 1966 MOU relating to the obligations and rights of the 1950 Niagara River Water Diversion Treaty.  The parties share in the cost of the structures on the Niagara that are used for diversion of flow by both countries.  These international structures include the Chippewa – Grass Island Pool International Niagara River Control Structure, the Niagara River Control Center (NRCC), and the Lake Erie Niagara River Ice Boom (LENRIB), plus other equipment and facilities including icebreaker ships used on Lake Erie.

The MOU establishes the Niagara Joint Works Committee (formerly the Niagara Works Committee), described in Section 5.2.4 above , which is responsible for maintenance and operation of Joint Works, and other matters. 

This 1998 MOU defines and lists facilities that are “shared-cost works” and “wholly-owned works” and defines maintenance and financial obligations of each power entity for each type of works.  The MOU establishes the costs that will be shared such as O&M costs and those costs that will not be shared such as taxes, interest and depreciation costs, etc.  Each party maintains its own insurance regarding the Joint Works.

The MOU sets forth the cost sharing percentage and identifies the party responsible for performing the maintenance on several facilities including the following partial listing:

·         Chippewa-Grass Island Pool Control Structure

·         Gauging and metering equipment

·         Communication circuits and facilities

·         Ice monitoring equipment

·         NRCC computer facilities.

2.3.2        Ice Management

The main ice problems in the Niagara River result from ice originating in Lake Erie.  Ice runs may cause ice jams that can damage shoreline property and significantly reduce power diversions. Losses in power generation due to ice is quantified in Table 5.3.2-1.  To facilitate the formation of an ice cover at the eastern end of Lake Erie, the Lake Erie-Niagara River ice boom has been installed each year since 1964 with the purpose to reduce the frequency and duration of heavy ice runs into the river. The boom is owned, operated and maintained by the two power entities.

To maintain river flows in the winter, the Power Authority and OPG, conduct a carefully coordinated ice management operation that includes regular icebreaker patrols, continual surveillance of river conditions and the ever-constant assistance of the Lake Erie-Niagara River Ice Boom.  When ice flows do make it into the river, icebreakers and specially equipped tugboats and careful operation of the power plants keep the floating masses moving away from the intakes and over the Falls.  During the stormiest winters, ice management teams operate around the clock to monitor the ice conditions.  Visual monitoring of river ice floes is also observed at NYPA’s river intakes on the Niagara River.  NYPA’s ice management program includes continual monitoring of the area around the ice boom by two video cameras mounted on the roof of Buffalo’s 41-story-high HSBC Center.

2.4         International Structures

2.4.1        Lake Erie Niagara River Ice Boom

The Ice Boom, in accordance with International Joint Commission orders authorizing it, is constructed and disassembled each winter and spring (Figure 5.4.1-1) (note that the original boom logs referenced below were replaced by steel pontoons in 1997, Figure 5.4.1-2 ).

It is the function of the boom (depicted in Figure 5.4.1-3) to accelerate the formation of a stable ice cover upstream, reduce ice movement in the cover while it is being formed and provide additional stability to the downstream edge of the natural ice arch, thus minimizing erosion and subsequent break-off.

When in position, the 8,800-foot ice boom is located approximately two miles upstream of the Peace Bridge and spans the outlet of Lake Erie. Installation of the floating sections of the boom may begin on December 16th, or when the water temperature at the Buffalo water intake reaches four degrees Celsius (39 degrees Fahrenheit), whichever occurs first.  All floating sections of the ice boom are opened by the first of April, unless ice cover surveys on or about that date show there is more than 250 square miles of ice remaining in the eastern end of the lake. If that is the case, the ice boom opening may be delayed.

Prior to the installation of the ice boom, large runs of Lake Erie ice occurred frequently, resulting in damage to docks and other structures along the upper river.  Such ice runs also require that water diversions for power production be reduced so that ice could be moved past the power intakes and over the Falls.  Average power production losses were approximately 400,000 MWh’s per year due to ice in the River prior to the mid-1960’s installation of the LENRIB.  This average figure dropped by more than 75% after the LENRIB was installed.  Power production losses due to ice for the period 1974 to 1997 averaged approximately 68,000 MWhs   After the improved steel pontoon structure was installed in 1997, losses due to ice dropped significantly again, averaging only 8,000 MWh’s per winter for 1998-2001 (winter 1997-1998, the first year of use of the steel pontoons, was a rare open winter where the Lake did not freeze). Table 5.3.2-1 shows generation losses (in MWh) by month for each year from 1974 to 2003.

By mutual agreement in the Niagara Joint Works MOU, the two power entities equally share the cost of the boom operation and maintenance with NYPA delegated to assume the maintenance responsibility.  NYPA and OPG jointly own a tug boat, work barge, crane, and three drum hoists under the Niagara Joint Works. NYPA is responsible to install and remove the boom each year.

2.4.2        International Control Structure

Various international studies have examined factors affecting the scenic beauty of Niagara Falls and the Niagara River. Remedial works, first suggested in 1929, were constructed in the 1950s to enhance the scenic beauty, provide for the most beneficial use of the river's waters and maintain the minimum flows over the Falls required by the 1950 Niagara Treaty.  The remedial works consist of the International Niagara Control Works, which controls water levels in the Chippewa-Grass Island Pool, and excavation and fill on both flanks of Horseshoe Falls.  The excavation and fill provide for a more even and unbroken flow across the Horseshoe Falls.

The International Niagara Control Works is a concrete and steel structure extending about 0.8 kilometer (0.5 mile) into the river from the Canadian shore at the downstream end of the Chippewa-Grass Island Pool, and is 2.6 km (1.6 miles) upstream from the Falls. The original structure had 13 gates and 5 more were added in 1963.  Its 18 sluice gates allow for precise changes in the flow over the Falls and adjustments to the water level in the Chippewa-Grass Island Pool, where water is diverted for hydroelectric power production.

The International Niagara Board of Control monitors operation of the control works by the power entities under an IJC directive.  To lessen the adverse effects from high or low water levels, the power entities are required to maintain the long-term average level of the Chippewa-Grass Island Pool within certain tolerances.  Under abnormal flow or ice conditions, these tolerances may be suspended and a somewhat wider range of levels is permitted.  Operation of this structure does not change the total flow of the Niagara River and has no measurable effect on Lake Erie water levels.  The ability to change water levels near Niagara Falls by adjusting gate settings and altering plant diversions has, on numerous occasions, assisted in river rescue operations to save people from going over the Falls.

2.4.3        River Flow Gauges

Numerous river flow gages are maintained by both the U.S. and Canada. The Niagara River gauges used to monitor the Chippewa-Grass Island Pool levels and flows over Niagara Falls are Slater's Point, Material Dock, American Falls and Ashland Avenue gauges.  Both the U. S. National Oceanic and Atmospheric Administration and the Power Entities operate water level gauges at the Ashland Avenue location.  Subject to continuing comparison checks of the water level data from both instruments by the International Niagara Committee (INC), the Power Entities’ gauge is used for officially recording water levels used in determining the flows over Niagara Falls.  Comparison of water level readings from both gauges showed that they were within acceptable INC tolerances throughout the reporting period.  OPG is investigating relocating and upgrading the OPG Station tailwater gauge to increase its reliability during ice conditions.  This gauge is used as a backup to the Ashland Avenue Gauge during ice-free conditions and as an indication of flow restriction in the Maid-of-the-Mist Pool caused by ice jamming/shifting.

2.5         Impact of Canadian Hydroelectric Projects

2.5.1        Description of Canadian Hydroelectric Projects

OPG operates two generating stations, Sir Adam Beck # 1 and #2, located  across the river from the Robert Moses Plant.  Beck #1 has 10 units with a total power output of 470 MW.  It was brought in service starting in 1922 with the 10th unit being completed in 1930.  Beck #2 has 16 units with combined power output of 1,290-MW. Beck #2 was built between 1954 (the first 7 units brought on line) and 1958 (last 2 units brought on line). In 1958 the Beck station was the largest hydroelectric plant in North America (eclipsed by the larger Niagara Project in 1961).

The Beck Stations take water from the Niagara River 1.6 miles upstream from the Falls, near the International Control Structure. OPG has two water tunnels that traverse the entire City of Niagara Falls from the Village of Chippewa in the South to the Sir Adam Beck Stations in the North.  Each tunnel is approximately 5.5 miles (9 km) long and is forty-five (45) feet (14m) in diameter and are buried up to 330 feet (100m) below ground level.  The tunnels each carry approximately 32,000 cfs (cubic feet per second) of water to the generating stations. In addition OPG has an 8.5 mile (13.6 km) open canal that also traverses the entire City of Niagara Falls and feeds from the Welland River in the South-West section to the Generating Stations. Beck # 1 uses approximately 22,000 CFS for its generation flows, and Beck # 2 uses 42,000 CFS. Both operate under approximately 300 feet of head.

Ontario Hydro has a 750-acre water reservoir above the Sir Adam Beck plants.  At night, water is pumped into this reservoir, which acts as a backup system.  During the day when the flow of water is directed to the Falls, Ontario Hydro draws water from the reservoir to supply sufficient water for the generators to run at optimum capacity.  The pumped storage units generate about 120 MW of capacity in addition to Beck 1 & 2.

2.5.2        Operation of Canadian Hydroelectric Projects

The Canadian projects, which can utilize up to 62,000 cfs of diversion water are operated in a coordinated and cooperative fashion with the Niagara Project regarding monitoring of river flows, managing and clearing of ice in the Niagara River, and efficient use for power production of diversion water.  Decades of cooperation have provided control systems and procedures that implement the 1950 Water Diversion Treaty.

2.5.2.1  International Cooperation on Transfer Water

In certain circumstances OPG or NYPA may have a greater diversion allocation of water than it can use, yet the other power entity has surplus generating capacity available.  The options are to let the water spill or to transfer (divert) it to the other side. OPG and NYPA have identified several ways to share the generation that results from this Transfer water.  There are three (3) kinds of Transfer water: Standard Energy water, Retired Unit Generation (RUG) water and Maintenance water.

Standard energy water can be used one of two ways.  The surplus side can pay a unit rental fee to the other for use of their generation.  The one with surplus diversion water gets the MWh output and the one generating gets paid a per-MWh fee.  A second way is for the surplus side to declare the efficiency of the unit it would have otherwise been using, and the two parties split the MWh’s based upon this model.  The electrical output is shared evenly for Retired Unit Generation water (RUG water).  For Maintenance water, the surplus entity is assigned energy based upon the lesser of the efficiency it would have gotten from its own unit (if it had not been on maintenance) or the operating efficiency of the unit running to use the water (party with surplus water gets “lower of”).

2.5.2.2  International Cooperation on Ice  Management

During times of ice build-up on either side of the Niagara River that restricts intake of water to one or both of the hydroelectric projects, the power entities (OPG and the Power Authority) both contribute water as needed to raise the river level and flush the ice over the Falls and on downstream.  The goal is to clear the problem, and both sides share equally in the water losses (and resulting reduced power production).  The power entities do not deem who is responsible for the ice situation. Both sides contribute water as needed and water losses (spillage over Falls in excess of Treaty requirements) are split 50/50.  Managing the water in this way creates incentive for both sides to use water as necessary to clear the problem.

Further cooperation is evidenced by the joint funding and operation of the ice boom and related ice management equipment, described in Section 5.4.1 above.

2.5.3        Beck Project Redevelopment

In the 1990’s the government of Ontario proposed a significant upgrade and expansion of the Beck Station.  The proposal called for expansion of the Station with new diversion tunnels, a new intake structure, and a new, underground powerhouse. In the late 1990’s these plans were indefinitely postponed, however,  in June 2004 OPG announced it was planning to move ahead with a proposed new tunnel 10.5 km (6.5 miles) long and 12.5 meters (about 41 feet) in diameter. According to OPG, the purpose of the new tunnel will be to divert for power production additional water from the Niagara River under international treaty.  OPG reports that the new tunnel, expected to be completed in 2009, would allow generation of an additional 1,600,000 MWHs annually at the Sir Adam Beck complex.

 

Table 5.3.2-1

Power Losses (MWh) due to Ice in the Niagara River, 1974-2003

Ice Season

Power Losses in MWh

December

January

February

March

April

May

Totals

1974 - 1975

-

-

150,000

15,100

-

-

165,100

1975 - 1976

-

78,700

36,500

45,800

32,000

-

193,000

1976 - 1977

-

54,000

23,500

-

-

-

77,500

1977 - 1978

-

88,000

600

600

 

-

89,200

1978 - 1979

-

30,000

3,700

-

1,600

-

35,300

1979 - 1980

-

6,000

30,000

13,000

10,500

-

59,500

1980 - 1981

14,000

9,000

3,900

1,100

4,100

-

32,100

1981 - 1982

-

58,000

27,000

10,000

13,000

5,000

113,000

1982 - 1983

-

-

-

-

-

-

-

1983 - 1984

53,000

57,000

4,000

25,000

-

-

139,000

1984 - 1985

-

65,000

25,000

11,000

29,000

-

130,000

1985 - 1986

10,000

65,000

8,000

5,000

6,000

-

94,000

1986 - 1987

-

28,000

32,000

4,000

-

-

64,000

1987 - 1988

-

13,000

24,000

-

4,000

-

41,000

1988 - 1989

-

-

30,000

1,000

2,000

-

33,000

1989 - 1990

6,000

7,000

5,000

5,000

-

-

23,000

1990 - 1991

-

14,000

11,000

6,000

-

-

31,000

1991 - 1992

-

21,000

3,000

14,000

-

-

38,000

1992 - 1993

-

-

2,000

2,000

-

-

4,000

1993 - 1994

-

11,000

12,000

-

1,000

-

24,000

1994 - 1995

-

-

11,000

2,000

7,000

-

20,000

1995 - 1996

-

45,000

4,000

13,000

-

-

62,000

1996 - 1997

-

80,000

4,000

3,000

16,000

-

103,000

1997 - 1998

-

-

-

-

-

-

-

1998 - 1999

-

17,000

700

-

-

-

17,700

1999 - 2000

-

-

1,200

-

-

-

1,200

2000 - 2001

700

3,600

500

100

-

-

4,900

2001- 2002

-

-

-

-

-

-

-

2002 - 2003

-

35,000

11,500

1,500

-

-

48,000

2003 - 2004

-

26,000

5,800

-

-

-

31,800

Total

83,700

811,300

469,900

178,200

126,200

5,000

1,674,300

% of Total

5.0%

48.5%

28.1%

10.6%

7.5%

0.3%

100%

 

Note: 1997-1998 - installation of new steel LENRIB

1964 - 1974 - No data available

 

Figure 5.2.1-1

Upper Niagara River, Structures and Natural Features

[NIP – General Location Maps]

 

Figure 5.4.1-1

Ice Boom Plan

 

 

Figure 5.4.1-2

Steel Pontoons Used in Ice Boom

 

 

Figure 5.4.1-3

Partial Stable Ice Cover in Lake Erie Upstream of Ice Boom

 

3.0     OTHER IMPACTS TO THE NIAGARA PROJECT

3.1         Relicensing Costs

The relicensing costs for the Niagara Project will be recovered through rates charged to customers, but these costs are not expected to have an impact on Project dispatch, production or operation.  The NYISO marketplace is an environment in which generation competes for dispatch based upon its competitive bid, which is driven by the generators marginal cost of production rather than on its full, embedded cost. The relicensing is not expected to affect the Project’s marginal cost of production, which is a function of river flows and the cost of market purchases associated with the operation of the LPGP pumped storage operation.

3.2         Project Upgrade

The ongoing Project upgrade at Robert Moses, as described in Chapter 4 above is the only other proposed change to Project operation.   Information from the LPGP feasibility study is not available at the time of writing of this Report.

 

SOURCES CONSULTED

1950 Niagara River, Water Diversion Treaty signed February 27, 1950 (U.S. and Canada)

Acres International Corporation. 2004.  Plant Upgrade Feasibility Study

International Joint Commission. 2004.   http://www.ijc.org/

International Niagara Board of Control. 1999. The Lake Erie – Niagara River Ice Boom Information Sheet.  http://huron.lre.usace.army.mil/ijc/niagara.html

International Niagara Working Committee.  2003.  2002-2003 Operation of the Lake Erie-Niagara River Ice Boom

Niagara Joint Works Committee. 2000.  Niagara Joint Works Memorandum of Understanding New York Power Authority and Ontario Hydro

NYISO. 1999. Independent System Operator Agreement, (Composite Through July 8, 2002)

NYISO.  Bylaws of the Operating Committee (revised July 8, 2002)

NYISO. 1999. Operating Committee Scope of Responsibility

NYISO. 1999. New York Independent System Operator, Inc., FERC Electric Tariff Original Volume No. 1, Open Access Transmission Tariff  (Composite Through September 10, 2003)

NYISO. 1999.  Bylaws of the Markets Committee (revised July 8, 2002)

NYISO. 1999. Markets Committee Scope of Responsibility

NYISO. 1999.  Bylaws of the Business Issues Committee (revised July 8, 2002)

NYISO. 1999.  Business Issues Committee Scope of Responsibility

NYISO. 1999. Agreement Between New York Independent System Operator And Transmission Owners (November 18, 1999)

NYISO. 1999. Agreement Between The New York Independent System Operator And The New York State Reliability Council (November 18, 1999).

NYISO. 2001. New York Independent System Operator, Inc. FERC Electric Tariff Original Volume No. 2; ISO Market Administration And Control Area Services Tariff, January 2001 (Composite Through July 10, 2003)

NYISO. 2002.  Business Plan 2002

NYISO. 2001.  Day Ahead Scheduling Manual

NYISO. 2001.  Customer and Administrative Services Manual

NYISO. 2001. Market Participant Users Guide (revised March 18, 2003)

NYSRC Web site address:  www.nysrc.org

NYSRC. 1999. New York State Reliability Council Agreement

NYSRC. 2002. NYSRC Executive Committee Report 1999 – 2002

NYSRC. 2003. NYSRC Reliability Rules for Planning and Operating the New York State Power System (Version 9)

NYPA Web site http://www.iceboom.nypa.gov