The Poseidon Project Securing Downstate Reliability, Repowering Long Island
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THE POSEIDON PROJECT SECURING DOWNSTATE RELIABILITY, REPOWERING LONG ISLAND POSEIDON TRANSMISSION LLC'S RESPONSE TO NEW YORK POWER AUTHORITY'S REQUEST FOR PROPOSALS INQUIRY NO. Q13-5441LW MAY 16, 2013 VOLUME 1 CONTENTS Volume 1 8.1 Cover Letter 1-2 8.2 Executive Summary 5-9 8.3 Description of Project 11-23 8.4 Proposer Experience 25-33 8.5 Project Information 35-36 8.6 Disclosure Statements 37-38 8.7 Financial Capacity to Complete and Operate the Proposed Project 39-42 8.8 Environmental Benefits of Project 43-44 8.9 Proposed Resource(s) Development Plans and Schedule 45-71 8.10 Environmental Review 73-76 8.11 Pricing 77-80 8.12 Contract Exceptions 81 8.13 Halting Costs 83-84 8.14 Other Requirements 85 8.15 Compliance Statement 87 Volume 2 THE POSEIDON PROJEC Poseidon Transmission LLC c/o Anbaric Transmission LLC 401 Edgewater Place, Suite 650 T Wakefield, MA 01880 SECURING DOWN May 16, 2013 New York Power Authority 123 Main Street S White Plains, New York 10601 TATE Attn: Mr. Len Walker R ELIABILITY, ELIABILITY, Manager of Special Projects BY OVERNIGHT COURIER Contact: 914-681-6627 R EPOWERING Re: Inquiry No. Q13-5441LW Dear Mr. Walker: L ONG Pursuant to the instructions set forth in the New York Power Authority’s Inquiry No. Q13-5441LW, Contingency Procurement of IS Generation and Transmission, Request for Proposals dated April 3, 2013 (the “RFP”), on behalf of Poseidon Transmission LLC, I enclose LAN five hard copy responses to the RFP (“Response”) and two CDs containing electronic versions of the Response. I have also caused a D hard copy of the Response and one CD with an electronic version of the Response to be filed with the New York State Public Service Commission. As set forth in greater detail in the Response, The Poseidon Project is a 500MW HVDC link between the PJM grid in New Jersey and the downstate New York grid in Long Island. The energy and capacity supplied by this underwater and underground cable will provide exceptional reliability benefits to southeastern New York, help make possible the Authority’s stated goal of enabling the Indian Point Energy Center to close, offers low-cost energy to Long Island’s ratepayers, increases wholesale competition in the electricity industry, and delivers a clean environmental profile, with no air emissions while facilitating the orderly retirement of older and less efficient, generation facilities on Long Island. The Response is submitted by Poseidon Transmission LLC, a special purpose vehicle whose members are subsidiaries of two entities with vast experience in the electric power business: Anbaric Transmission LLC, which helped develop the Neptune and Hudson lines and Exelon Transmission Company LLC, a subsidiary of Exelon Corporation, one of the nation’s largest energy companies. Anbaric Poseidon LLC (a subsidiary of Anbaric Transmission LLC), is the lead member of the consortium and is the entity responsible for satisfying the Threshold Criteria. 1 D LAN IS ONG L The Poseidon Project is a new transmission line that would provide increased marginal capacity for the downstate region and that is not included in the 2012 Reliability Needs Assessment (but was evaluated as an alternative regulated solution for identified resource adequacy needs), as updated in the Compliance Filing. The pricing set forth in the Response is firm through December 31, 2013 and the Poseidon Project can achieve its Commercial Operation Date on or before June 1, 2016. The point of interconnection is at the EPOWERING R Ruland Road substation in the Town of Huntington, Long Island, within the area designated Zone K by the New York Independent System Operator, Inc. ELIABILITY, ELIABILITY, Separately, as shown in the enclosed term sheet, Exelon Generation Company, LLC, is offering to NYPA a generation proposal for energy R and capacity from PJM. This generation option is being offered separate and apart from the Poseidon Project and on an a la carte basis TATE TATE S to NYPA, meaning that NYPA may select the transmission proposal, the generation proposal or both proposals, but need not select both proposals. What this proposal illustrates is the access to lower priced energy and capacity in PJM that can be made available to NY customers through a project such as Poseidon. This proposal is indicative of transactions that could be completed and the pricing set forth therein is subject to market move prior to executing final documentation. I look forward to discussing this exciting project with you and your colleagues at the New York Power Authority and the Public Service SECURING DOWN Commission. Please call me at 781-683-0707 or email me at [email protected] if you have any questions. T Sincerely yours, THE POSEIDON PROJEC Edward N. Krapels, Ph.D. Manager Poseidon Transmission LLC and Anbaric Poseidon Holding LLC Enclosures Copy to Jeffrey Yuknis, Exelon Corporation 2 8.1 COVER LETTER THE POSEIDON PROJEC PROJECT OVERVIEW – THE POSEIDON PROJECT caused by the retirement of Indian Point while diversifying The Poseidon Project strengthens the reliability of the generation sources and enabling older, dirtier power plants downstate New York power grid by bringing 500MW of low- to close. As Long Island’s only link to America’s 500 kV bulk T cost energy and capacity from the heart of PJM’s bulk power power grid, Poseidon reduces pricing volatility and increases SECURING DOWN grid to the core of Long Island’s T&D network. It’s a compelling security of supply – and hedges against commodity risk with project for downstate reliability and ratepayers as well as local PJM’s fuel diversity. businesses and the environment – offered by a seasoned development team and capable of being in-service by June 1, Poseidon’s development team includes many of those who brought the Neptune Regional Transmission System 2016. S to Long Island six years ago, joined by Exelon’s enormous TATE This system-to-system link replaces the 433 MWs of energy financial, managerial and technical capabilities. Our PJM R ELIABILITY, ELIABILITY, that Long Island typically obtains from the Indian Point Energy interconnection work is now in the final stages (a Facilities Center. It anchors Long Island’s ratepayers to PJM’s lower- Study is underway), the interconnection costs in PJM are modest, our survey and permitting work are well underway, cost, high-efficiency energy portfolio via an underground R EPOWERING and underwater cable modeled after the Neptune Regional and we have site control secure for one ideal location for the Transmission System. Poseidon’s proven HVDC technology New Jersey converter station and are days away from securing and converter stations mirror Neptune’s 98% availability rating site control for the New York converter station. Finally we are working with a world-class EPC contractor (ABB) whose Cross and offer downstate New Yorkers and Long Island ratepayers L ONG reliability unsurpassed by any other transmission or generation Sound Cable project has been providing reliable service to project now in the NYISO’s queue. The Poseidon Project Long Island since 2003, and who is committed to meet the IS LAN also offers best-in-class environmental benefits, stimulating June 1, 2016 in-service date. retirement of older, dirtier power plants on Long Island while D producing no air or water emissions, minimal ground or visual Poseidon is uniquely capable of advancing New York State’s impacts and accessing energy from PJM. Poseidon’s potent energy policy goals for Long Island, which include stabilizing economic benefits – increased competition, annual savings of electric rates to maintain economic competitiveness, tens of millions of dollars to ratepayers, a unique hedge against reforming the Long Island Power Authority, creating resiliency commodity price risk – will ripple through the downstate that enhances storm preparedness and transitioning to a region, helping stabilize rates and supporting business growth cleaner power generation fleet. Governor Cuomo has said, and job creation for decades to come. Finally, the state-of- “Getting the cost of power down is essential for the economic the art HVDC technology that Poseidon will employ will help competitiveness of Long Island.” Poseidon does just that. The southeastern New York’s grid become more resilient in face of project’s 500 MW of low-cost energy willsave ratepayers more extreme weather events. than $53 million annually, supporting business growth and securing a clean and reliable energy future for Long Island. Poseidon is a unique public policy “two-fer.” First, the 500MW of energy and capacity makes the potential closure of Indian The Poseidon Project’s major impacts on downstate New York Point a “non-issue” for Long Island, replacing entirely the 433 – strengthened reliability, stabilized rates, energy cost savings, MWs of energy that Indian Point supplied to Long Island during job creation, and substantial environmental benefits – make a typical 2012 day. Second, Poseidon makes the Long Island this a valuable infrastructure investment for Long Islanders and power grid more reliable and more competitive by meeting all downstate New Yorkers now and long into the 21st Century. Long Island’s increased locational capacity requirements 3 4 THE POSEIDON PROJECT SECURING DOWNSTATE RELIABILITY, REPOWERING LONG ISLAND 8.2 EXECUTIVE SUMMARY THE POSEIDON PROJEC T 8.2 EXECUTIVE SUMMARY SECURING DOWN EXECUTIVE SUMMARY: Critically, Poseidon’s 500 MW of energy imports will replace The Poseidon Project will offer 500 MW of lower cost capacity the 433 MW of energy flows (2012 average net flows) from Zones H (where Indian Point is located) and I, into Zone K from PJM to New York State by June 1, 2016 through a S TATE TATE controllable undersea HVDC transmission cable modeled after (where Poseidon will be located). Additionally Poseidon’s the highly successful, 660 MW Neptune Regional Transmission injection of 500 MW of capacity from PJM into Zone K will help R ELIABILITY, ELIABILITY, System (“Neptune RTS”).