By Matthew Cordaro
Published: January 22, 2012 in Crain’s New York Business
Gov. Andrew Cuomo wants New York to construct an energy superhighway to bring power, including renewable sources, from upstate and western New York to the city and downstate. Comparing it to Dwight Eisenhower’s call for the interstate highway system in the 1950s, the governor proposes having private companies finance and build $2 billion in energy infrastructure for New York.
Conceptually, the proposal has many desirable features, including the potential to create jobs and provide additional sources of energy. But to achieve those, it first would have to overcome a series of technical and financial obstacles. Whether the rewards are worth the risks and costs must be intensely scrutinized. After all, New York has a generally stable, reliable supply of electric power. Is Mr. Cuomo seeking to give New York’s transmission system a heart transplant when diet and exercise might do the job?
For maximum benefits, especially in job retention and creation, any such “highway” should support current and new in-state power generation. If we rely too much on out-of-state energy sources, we risk losing many jobs and eventually would pay a lot more for imported power.
An energy superhighway will take us into new territory by forcing electric power to flow over far greater distances. That introduces challenges in reliability and power losses through energy dissipation along the route.
One way to address this is to have electricity “re-pumped” by power plants along strategic lines. Downstate plants including the Indian Point nuclear-power facility—35 miles north of midtown Manhattan—would be especially important for ensuring a reliable transmission network and providing most power on a typical day. But remember: Transmission lines, like power plants, can generate vigorous community opposition and legal actions.
The technology to build a superhighway in a timely manner—with specialized materials, controls and perhaps novel ways of cooling—would be very expensive. Potential cost overruns on this bold and uncharted initiative could total several times more than originally projected.
It’s also important to remember that the estimated $2 billion cost will add to monthly electric bills. In fact, before any superhighway proposal is accepted, New Yorkers should insist on the following:
Cost transparency and no state subsidies (direct or indirect) for this project. New York has too many such subsidies, which harm ratepayers.
A cost-benefit analysis. Upstate renewable power must be price-competitive; otherwise there is no point to the project.
An expansion of clean power generation in southern New York. In recent years, New York has been buying much electricity from neighboring states. Let’s fix this first by creating new jobs with new power facilities that eliminate our dependence on out-of-state sources.
Mr. Cordaro, a former energy industry CEO, serves on the advisory board of the New York Affordable Reliable Electricity Alliance.