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New York Power Authority Selects Proposal For New Clean Generating Plant to Serve New York City Governmental Customers

Michael Saltzman

April 29, 2008 


WHITE PLAINS—The New York Power Authority (NYPA) Trustees today authorized the selection of Astoria Energy LLC to provide economic, clean and reliable power supply to NYPA’s governmental customers in New York City.

Astoria Energy plans to build a new clean natural gas-fueled generating plant in Queens to supply power under a proposed 20-year contract with NYPA. The plant will help make up for the Power Authority’s scheduled retirement in January 2010 of the Charles Poletti Power Project, also in Queens.

The NYPA Trustees authorized the new supply contract, pending completion of final negotiations with Astoria Energy and the approval of the agreement by the New York City governmental customers, for the supply of 500 megawatts (mw) of generating capacity. The customers include the City of New York, the Metropolitan Transportation Authority, the Port Authority of New York and New Jersey, the New York City Housing Authority and the New York State Office of General Services.

The action by the NYPA board resulted from the Power Authority’s review, in close collaboration with the New York City governmental customers, of more than 30 competing proposals from nine prospective suppliers for new in-city capacity. The bids stemmed from NYPA’s issuance of a Request for Proposals (RFP) last November.

“The new supply contract will lead to additional economical generating capacity for New York City schools and hospitals, the subways and commuter trains, public housing and other essential services in the city while curbing pollution and greenhouse gas emissions,” Gov. David A. Paterson said. “Responsible, environmentally conscious energy policies are essential for meeting growing electricity demand and stabilizing future costs. Awarding this contract will be in keeping with those policies.”

“Clean, reliable and affordable energy supplies are crucial for New York City’s long-term needs,” Mayor Michael R. Bloomberg said. “We’re gratified to be partnering with the New York Power Authority on this initiative as part of a series of well planned measures that are consistent with PlaNYC, the city’s blueprint for a sustainable energy future.”

“The selection of Astoria Energy’s proposal ties in with Governor Paterson's and Mayor Bloomberg’s goals for shoring up the city’s energy infrastructure to meet the power demand challenges of the next few decades,” Roger B. Kelley, NYPA president and chief executive officer, said.

 “This new state-of-the-art, natural gas-fueled power plant will improve New York City’s air quality by displacing electricity production from older, dirtier and less efficient generating capacity,” Ashok Gupta, Air and Energy Program Director, Natural Resources Defense Council, said. “When combined with aggressive energy efficiency programs like the state’s ‘15 by 15’ Plan, the result will be improvement in public health, reduction in global warming pollution and the lowering of electricity bills.”

The new facility planned by Astoria Energy will use a combined-cycle technology in which hot exhaust gas normally lost in the combustion process is captured by heat-recovery steam generators to produce additional electricity. In doing so, the new facility will consume 30 percent less fuel per unit of electricity than a conventional power plant.

Astoria Energy expects the new plant, which is fully licensed, to be in service by the summer of 2011.

In 2001, the New York State Siting Board approved the construction of 1,000 mw of generating capacity at a 23-acre site in Astoria. Astoria Energy completed the first phase of the project in May 2006 when it placed in service a 500-mw combined-cycle facility for providing power to Con Edison. The pending supply contract with the Power Authority provides for Astoria Energy’s implementation of the next phase with the construction of the second 500-mw facility.

The evaluation criteria for the RFP that led to the selection of the Astoria Energy proposal included project economics, probability of timely completion, improvement to regional air quality and citywide reduction in electricity costs. The New York City governmental customers fully participated in the evaluation process and unanimously supported the selection of the Astoria Energy proposal for the new combined-cycle facility.

In addition to that proposal, NYPA previously selected a joint proposal by Hudson Transmission and FPL Energy, in November 2006, stemming from another RFP. This would involve construction of a new 345-kilovolt transmission line under the Hudson River to deliver up to 500 mw of supply capacity from an existing power plant in Central New Jersey.

The additional power supplies from both RFPs are needed for the New York City governmental customers’ long-term needs. The Power Authority currently serves the customers from various electric generating facilities and wholesale energy market purchases.

NYPA also works in partnership with the governmental customers on their energy efficiency efforts. Projects ranging from new fluorescent lighting to new heating, ventilating and air-conditioning systems are in various stages of development at more than 700 public facilities in New York City. The improvements are part of NYPA’s plans to invest $1.4 billion over the next several years to help achieve the state’s goal of reducing statewide electricity use by 15 percent from forecasted levels by 2015 (“15 by 15” Plan).

To date, the Power Authority has completed energy efficiency projects at more than 1,400 public facilities in the city. The initiatives have resulted in annual savings of approximately $64 million, reduction in greenhouse gas emissions of more than 530,000 tons a year and displacement of nearly 1.3 million barrels of oil annually.

 About NYPA:

■    NYPA uses no tax money or state credit.  It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity.  ■    NYPA is a leader in promoting energy-efficiency, new energy technologies and electric transportation initiatives.  ■    It is the nation’s largest state-owned electric utility, with 18 generating facilities in various parts of the state and more than 1,400 circuit-miles of transmission lines.

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