1. Power to the People: Electric Transmission in NYS Kent Gardner President & Chief Economist Center for Governmental Research

2. Annual Policy Conference 2009 Key Issues Goal: Reliable power at the lowest possible price Proximity to & relative abundance of fuel source Cost of plant construction & operation Competitive climate Policy variations in tax & regulation Spatial mismatch between supply & demand (generation and load) Core conflict: Better electric transmission creates winners & losers Within franchise territories of utilities (load serving entities) Across regions/states within the same regulatory jurisdiction (independent system operator or regional transmission operator) Across regulatory jurisdictions

3. Annual Policy Conference 2009 Prices vary dramatically

4. Annual Policy Conference 2009 Why do prices vary? Fuel source Washington: 74% from hydro Pennsylvania: 54% from coal Connecticut: 49% from nuclear, 30% from natural gas New York: 31% from natural gas, 29% from nuclear Cost of new generation: construction & siting Land & labor Local empowerment Transmission from (or to!) cheaper locales

5. Annual Policy Conference 2009 Coal is cheap And nuclear?

6. Annual Policy Conference 2009 NYC: Worlds largest & most complex load pocket

7. Annual Policy Conference 2009 New generation is difficult to site near NYC

8. Annual Policy Conference 2009 Transmission brings power to the people 765 kv from Hydro Quebec Neptune cable from NJ Cross-Sound cable from CT

9. Annual Policy Conference 2009 Spatial mismatch creates price variation

10. Annual Policy Conference 2009 Solution? Add new transmission

11. Annual Policy Conference 2009 But not in my backyard

12. Annual Policy Conference 2009 Yet generation is also difficult to site

13. Annual Policy Conference 2009 Indian Point licenses expire by 2015 Opposition is vigorous Riverkeeper leads the charge with help from sloop Clearwater & founder Pete Seeger, Bobby Kennedy, AG Andrew Cuomo

14. Annual Policy Conference 2009 Tradeoff: Risk v. power reliability

15. Annual Policy Conference 2009 Solution (again) is transmission LI Power Authority contracts for 500kv Neptune transmission line, 660 mw capacity, from New Jersey: Began operation in 2007 NY Power Authority contracts for 345kv line under Hudson from New Jersey: 500 mw dedicated from NG plant with capacity for addl 160 mw, to be completed in 2010 Reliability improved by addressing seams between ISOs & RTOs

16. Annual Policy Conference 2009 Fixing seams raises conflicts b/n states Cross-Sound cable between Shoreham, Long Island & New Haven, Connecticut: Environmental conflict over cable placement a proxy for dont send our power to New York? Turned on after 2003 blackout by federal order FERC has the unenviable task of playing umpire among states & ISOs/RTOs

17. Mason Emnett Senior Legal Advisor, Office of Energy Policy and Innovation Federal Energy Regulatory Commission Sue Gander Director, Environment, Energy & Natural Resources Division National Governors Association Center for Best Practices