In the Dark
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
As New Yorkers simmered through the blackout in lower Manhattan on Saturday, there are facts to contemplate. It takes about 10 years to get a new plant up and running. A report earlier this year from the Public Policy Institute, a research affiliate of the Business Council of New York State, estimates that the state needs “at least a dozen new power plants with at least 9,200 megawatts of additional electricity-generating capacity within the next five years to avoid the risk of serious economic damage.” The report notes that in the past 20 years, “peak demand has grown 5.2 times as fast as the state’s population and 2.1 times as fast as employment.”
The report compares New York’s predicament to California’s energy crisis. As in California, demand for electricity at New York has risen dramatically over the past decade, and new generating capacity has lagged far behind the increase in demand. In consequence, our reserve margin — that is, the amount of electricity actually necessary to service a given demand, since distribution is imperfect — has fallen below safe levels. In New York, the reserve margin is well below the 15% level generally considered safe. At the same time, for the free market established by 1998’s deregulation to be useful, there must also be an additional margin above the reserve for competition to ensure price competition.
As things stand, we have a kind of half-deregulated market. Free market prices apply to a commodity of which the government unnaturally limits the supply. The result is commercial, manufacturing, and residential prices in excess of national averages. To avoid becoming the next California, New York will need to get additional plants started now, since from acceptance of plans to power production takes about a decade. Demand continues to rise. The Public Policy Institute says it has concluded that New York State needs to site as many as a dozen new generating facilities over the next few years, and it needs to do this urgently if it is to lay what it calls a “secure foundation” for the state’s economic health. Something to think about before the next transformer blows up.
