Analysis: New York utilities face declining load

OREANDA-NEWS. March 23, 2015. Utilities in New York state are entering a new era of declining load even though they face federal or state mandates to retire the most CO2-intensive part of the generating fleet and bring renewable resources on line.

Energy demand in 2019 will be about 1pc lower than this year's estimate, but the summer peak will be 1pc higher, suggesting a more volatile energy consumption pattern, according to the latest long-term outlook by the state grid operator.

Energy demand is expected to increase slightly in 2019-20 but stays flat in 2021-25, according to the outlook. The New York state grid will not reach 2015's projected energy demand of 160,121 GWh until 2024. But summer peak load in 2024 should be 4pc higher than the 2015 estimate.

Declining or flat demand will help the state to meet a federal proposal to cut CO2 emissions from existing power plants. But higher summer peaks will increase reliance on natural gas and will make it hard to retire the most CO2 intensive part of the fleet, namely oil-fired or dual fuel units that are rarely dispatched but are essential for meeting peaking needs.

Forward energy prices are little changed through the end of the decade. Round-the-clock assessments for zone J in New York City and zone G in the lower Hudson valley gain less than 1pc in 2016-19. Zone A assessments in upstate New York are flat in the same period.

The grid operator lowered load growth projections since last year because of decreased industrial demand in upstate New York, slower growth in southeast New York and new and expanded energy policy initiatives, according to a presentation by Independent System Operator load forecasting and energy efficiency supervisor Arthur Maniaci at today's meeting of electric system planning working group.