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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs
cal loads for costs per kilowatt that are far lower than the cost of installing new peak capacity. Three of these programs alone have already avoided the need for over 700 MW of peak capacity:
Peak Load Reduction Program: avoids the need for between 355 and 375 MW,
Enabling Technology for Price Sensitive Load Management Program: avoids the need for 308 MW, and
Keep Cool Program: avoids the need for between 38 and 45 MW.
NYSERDA divides its efficiency programs into three types: business/institutional (which include the Commercial and Industrial Performance Program, New Construction Program, and Peak Load Reduction Program); residential (which includes the Keep Cool Program); and low-income (which includes the Low-Income Assisted Multi-Family Program).14
In the studies referred to here, the prices reflect capacity costs and expenses for the downstate and urban areas. The analyses use avoided costs based on wholesale-electricity bid prices (rather than production costs), and they use energy-efficiency load profiles to differentiate savings by time of day (NYSERDA, 2004b, p. 1).
The studies evaluating NYSERDA programs also distinguish between proposed megawatts (demand target), enabled megawatts (coincident demand reduction), pledged mega-watts (based on self-reporting), and delivered megawatts (averaged hourly reduction). Most of the estimates below (unless otherwise noted) refer to pledged megawatts. When some of the evaluations listed the delivered megawatts, they were typically only half the pledged rate. On the other hand, the estimated cost per megawatt of demand reduction is generally much lower than that of new supply options.
Peak Load Reduction Program
The Peak Load Reduction Program (PLRP), created in 2000, uses four different program segments:
Permanent demand-reduction efforts, which result in reduced demand through the installation of peak-demand-reduction equipment;
Load curtailment and shifting, through enrollment in the NYISO demand-response program;
Dispatchable emergency generator initiatives, which allow owners of backup generators to remove their load from the grid in response to NYISO requests; and
Interval meters, which reduce peak demand at the site of consumption.
The program avoids between 355 and 375 MW of peak demand. However, 340 MW of this is “callable,” and only about 15 to 20 MW are permanent. Participants that are callable receive annual capacity payments and are required to perform when called. The program costs around $42.7 million over 8 years, or approximately $120/kW of peak-load reduction.
Enabling Technologies Program
The Enabling Technologies Program (ETP), created in 2000, supports innovative technologies that enhance load serving entities (LSEs), curtailment service providers (CSPs), and NYISO. It directs customers to reduce load in response to emergency or market-based price signals. The technologies used include advanced meters, transaction-management software, and networking and communication solutions. As of 2003, the ETP has saved 308 enabled peak MW. The program costs around $34.4 million per 8 years, or approximately $110/kW of peak-load reduction.15
Together, the PLRP and ETP saved 174 MW in 2001, 311 MW in 2002, and 288 MW in 2003.16
Keep Cool Program
The Keep Cool Program was started in 2001 and ended in 2003. It encouraged the replacement of old, inefficient air conditioners with new ENERGY STAR-rated room air conditioners and through-the-wall units. The program has two main components: it includes rebates and incentives for customers, and it uses a significant marketing campaign that encourages customers to shift appliance use to nonpeak periods. As a result of the wide scope of its multimedia marketing program, the Keep Cool Program resulted in about 361,000 units being replaced, of which 141,000 units were given incentives through the program.
The program is estimated to have avoided approximately 41 MW of peak demand in every year of the program. The program costs around $19.9 million over 8 years, or approximately $490/kW of peak-load reduction.17
In conclusion, these three programs document the potential for NYSERDA demand programs to cost-effectively reduce peak loads.
Estimating the Potential for Demand Reduction
The committee estimated the potential for demand-
For more on these programs, see the useful tables in “New York Energy $mart Program Cost-Effectiveness Assessment” (NYSERDA, 2004b, p. 2-3).
An updated program evaluation report (Heschong Mahone Group, 2005) evaluated the Peak Load Reduction and Enabling Technologies Programs together. It estimates peak reductions of 178 MW (p. 25), costs of $28.8 million (Table 3-9, p. 24), for a cost per peak reduction of $163/kW.
See NYSERDA (2004b, p. 34).
An updated program evaluation report (Heschong Mahone Group, 2005) estimates peak reductions of 19.7 MW (Table 3-1, p. 16), costs of $18.4 million (Table 1-3, p. 4), for a cost per peak reduction of $934/kW.