The Closure of the Indian Point Nuclear Plant and its Impact on Your Energy Costs
New York State under the leadership of Governor Cuomo earlier this year announced an agreement to totally close the Indian Point Nuclear Power Plant in two stages starting in 2020 and ending in 2021. Since the plant provides around 25% of New York City’s electric load requirements the closure is expected to impact electric prices in NYC, even though measures to help mitigate the impact of the closure are being put in place.
The good news is that one of the measures introduced is an additional incentive program that offers generous incentives for installing highly efficient equipment and systems. These systems not only will lower your energy bills, in many cases they will also greatly improve the comfort of your properties, provide you with greater control over the operation of your properties and finally, provide you with additional options for reducing your costs.
What is the Anticipated Impact on Electric Costs in NYC and Westchester County of Indian Point’s Closure?
One measure of the impact the closure will have on electricity prices involves something called the “installed capacity” requirement, (“ICAP”). The point of the ICAP requirement is to ensure enough electric capacity is available to always meet system needs. This is accomplished via a capacity payment over and above what it costs to produce electricity. While ICAP is only one component of the total cost of electricity, it’s a significant one, (up to a third of the total cost).
A recent study undertaken by the organization responsible for running the electric grid in New York, (New York Independent System Operator – NYISO), predicted that ICAP prices would increase from an average of $6.56/kW/month for the three years prior to the closing of the first unit at Indian Point to $9.05/kW/month in 2020, (a 38% increase), and then up to $11.87/kW in 2021 (an 81% increase from current costs!), when the second of the two units close.
While these are just projections, and so actual prices in 2020 and 2021 will likely be different, it’s clear that electric prices in NYC will be higher, potentially significantly higher, than if the plant remained open.
What Can Electric Customers in NYC & Westchester Do in Response?
Fortunately, this has been anticipated and some steps have been put in place to try to mitigate the impact. This includes the installation of additional transmission capacity into the city and the development of an additional incentive program to encourage the installation of energy efficient systems. This program, the Demand Management Program (“DMP”), offers significant incentives for reductions in your peak demand.
DMP offers incentives to properties that can reduce the demand portion of their electric bill by at least 50kW during peak periods. Eligible measures include emergency generation systems, control systems, high efficiency chillers and, thermal and/or battery storage systems. Incentives currently range from $500/kW reduced up to as much as $1,500/kW reduced depending on the measure. The program operates much like an auction so the actual incentives will likely be somewhat less than the maximum values shown.
The good news is if your project doesn’t qualify for DMP, Con Edison offers other programs that provide incentives for energy efficiency upgrades. These more traditional programs offer incentives for a wider range of measures, including high efficiency lighting (LEDs), more efficient pumps and, upgraded elevator systems, among other measures. The application process is also simpler and usually faster as well.
How Can Barrett Green Help You Take Advantage of These Programs?
Barrett Green Management has extensive experience in working with the incentive programs offered by Con Edison and also by the New York Energy Research and Development Authority, (“NYSERDA”). We can assist you by not only ensuring you receive whatever incentive and rebate money is available, but also by ensuring that the best contractors and vendors are selected for the project.
Perhaps most important however, is that we can assist you in putting together a cost-effective energy efficiency program for your property. Such a program would ensure that all cost-effective measures are explored and that the most effective ones are put in place first, so that the savings from those initial measures can then be used to pay for additional efficiency upgrades in the future.
Energy efficiency and controlling energy costs can be a puzzle, but Barrett Green can help you solve that puzzle, so reach out to us today at 212-319-8400 and let us help you, “Think Outside the Grid!”.
Arthur W. Pearson
Barrett Green Management