PUBLIC VERSION PRIVILEGED AND CONFIDENTIAL INFORMATION REMOVED PURSUANT TO 18 C.F.R. § 388.112 Appendix D PUBLIC VERSION PRIVILEGED AND CONFIDENTIAL INFORMATION REMOVED PURSUANT TO 18 C.F.R. § 388.112 EXHIBIT NO. NYT-4 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION New York Transco, LLC ) ) Central Hudson Gas & Electric Corp. ) Consolidated Edison Company of ) New York, Inc. ) Docket No. ER15-___-000 Niagara Mohawk Power Corporation d/b/a ) National Grid ) New York State Electric & Gas Corp. ) Orange & Rockland Utilities, Inc. ) Rochester Gas and Electric Corp. ) PREPARED DIRECT TESTIMONY OF PAUL E. HAERING AND RICHARD W. ALLEN ON BEHALF OF THE NEW YORK TRANSCO, LLC December 4, 2014 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION New York Transco, LLC ) ) Central Hudson Gas & Electric Corp. ) Consolidated Edison Company of ) New York, Inc. ) Docket No. ER15-___-000 Niagara Mohawk Power Corporation d/b/a ) National Grid ) New York State Electric & Gas Corp. ) Orange & Rockland Utilities, Inc. ) Rochester Gas and Electric Corp. ) PREPARED DIRECT TESTIMONY OF PAUL E. HAERING AND RICHARD W. ALLEN ON BEHALF OF THE NEW YORK TRANSCO, LLC 1 Q. Mr. Haering, please state your name and business address. 2 A. My name is Paul E. Haering, and my business address is 284 South Avenue, 3 Poughkeepsie, NY 12601. 4 Q. By whom are you employed and in what capacity? 5 A. I am Vice President of Engineering and Operations Services at Central Hudson 6 Gas and Electric Corporation (“Central Hudson”), a Fortis Company. In that 7 capacity I am responsible for the engineering planning and design for Central 8 Hudson’s gas and electric transmission and distribution systems. I am responsible 9 for the construction, operation, and maintenance of our electrical substations. In 10 addition, I have responsibility for our Operations Services organization. In my 11 role I am responsible for overseeing the development of the Company’s capital 12 forecasts and also Chair of the Company’s Capital Asset Review and Evaluation 2 1 Committee which oversees the implementation of the annual capital program. I 2 have had these responsibilities since 2007. 3 Q. Please summarize your educational background. 4 A. I graduated from Manhattan College in 1986 with a Bachelor of Engineering in 5 Electrical Engineering degree. In 1992, I received a Masters of Electrical 6 Engineering degree from Polytechnic University. In 2007, I received a Master of 7 Business Administration from Rensselaer Polytechnic Institute. 8 Q. Please summarize your professional experience. 9 A. I joined Central Hudson in 1986 as a Junior Engineer in the Substation Design 10 Section. In 1989 I was transferred to work as a staff engineer in the Operations 11 Services Division, which has responsibility for the operation, maintenance, and 12 construction of the Company’s substation facilities. In 1994, I was promoted to 13 the position of Operations Supervisor in the Operations Services Division. In 14 2000, I was transferred to the position of Engineer in the Electric System 15 Protection Section. In 2001, I became Section Engineer for the Distribution 16 Engineering Section. In 2003, I was promoted to the position of Manager of 17 Electric Transmission and Distribution. In 2004, I was promoted to the position 18 of Manager of Electric Engineering Services. In May of 2007, I was named the 19 Assistant Vice President of Engineering and Environmental Services and in 20 December 2007 named to my current position. 21 Q. Have you previously testified before this Commission? 22 A. No. 23 Q. Mr. Allen, please state your name and business address. 3 1 A. My name is Richard W. Allen, and my business address is 1125 Broadway, 2 Albany, NY 12204. 3 Q. By whom are you employed and in what capacity? 4 A. I am Director of Business Development for National Grid whose US headquarters 5 are located in Waltham, Massachusetts. In that capacity I am responsible for 6 identifying, analyzing, and recommending business growth opportunities in the 7 United States with focus in New York and the mid-Atlantic region. These 8 opportunities may include joint ventures to develop large project proposals or 9 assessing potential target companies or assets for acquisition. I am also 10 responsible for implementing those recommendations the corporation has 11 approved. I have had these responsibilities since December 2009. 12 Q. Please summarize your educational background. 13 A. I graduated from Clarkson University in 1987 with a Bachelor of Science in 14 Electrical Engineering. In 1989, I received a Masters of Electrical Engineering 15 degree from Rensselaer Polytechnic Institute. In 2004, I received a Master of 16 Business Administration from Rensselaer Polytechnic Institute. I am a Certified 17 Project Management Professional with the Project Management Institute. 18 Q. Please summarize your professional experience. 19 A. In 1991, I joined Niagara Mohawk Power Corporation (now National Grid) as a 20 substation design engineer and project manager where I designed new high 21 voltage substations and capital improvements to existing substations, managing 22 the permitting, construction and commissioning of substation projects in a 23 challenging regulatory environment. In 1995, I was promoted to the position of 4 1 Power Delivery Supervisor responsible for the construction, operation, and 2 maintenance of high voltage electric substations. In 1999, I assumed the position 3 of Relay Supervisor responsible for the installation, operation, and maintenance of 4 the electric system protection and controls as well as the testing and 5 commissioning of major electric power equipment and facilities. In 2003, I was 6 transferred to the position of Senior Engineer in Transmission Planning, 7 performing load flow analysis and congestion analysis. Power system planning 8 software programs that I am trained to use includes PSS/E and GE MAPS. In 9 March of 2005, I was promoted to the position of Lead Project Manager where I 10 managed major infrastructure improvement projects including power plant 11 interconnections, new transmission lines and substations. In December of 2009, I 12 was promoted to my current position. 13 Q. Have you previously testified before this Commission? 14 A. No. 15 Q. Mr. Haering and Mr. Allen, on whose behalf are you testifying? 16 A. We are testifying on behalf of New York Transco LLC (“NY Transco”). 17 Q. What is the purpose of your testimony in this proceeding? 18 A. As Mr. Nachmias explains, the NY Transco will develop, construct and own five 19 new high voltage transmission projects that will relieve long-standing 20 transmission constraints, improve grid reliability (including with respect to the 21 potential retirement of large generating plants in southeastern New York), 22 facilitate the integration of renewable energy generators, support economic 23 growth in the State, and address other State public policy needs. The purpose of 5 1 our testimony will be to describe these projects in greater detail, and to explain 2 the risks and challenges that NY Transco faces in completing the five projects. In 3 addition, we will describe the benefits of these projects. 4 As background, we will describe the major concerns that we see with New 5 York’s existing power grid and some of the studies that have documented the 6 basis for those concerns. We will also describe the proceedings conducted by the 7 New York Public Service Commission (“NYPSC”) in which it found that three of 8 the five transmission projects are needed to relieve transmission congestion and to 9 provide long-term service reliability, and we will explain that the NYPSC is also 10 examining the congestion, reliability, and other benefits associated with NY 11 Transco’s other two projects in a related proceeding. We will describe the 12 process going forward to complete these projects, our efforts to control costs, and 13 the difficulties that we face in completing them by the required service dates. 14 Q. Are you sponsoring any exhibits? 15 A. Yes. We are sponsoring Exhibit Nos. NYT-5 – NYT-17. 16 Q. Please summarize your concerns with the condition of New York’s 17 transmission grid. 18 A. New York’s transmission grid is aging and constraints on the grid make the 19 network less efficient, causing energy and capacity prices to be higher than they 20 would be with more transmission that would allow increased flows of energy 21 across the state. Ultimately, the age and inefficiency of the grid has reliability 22 implications. This is especially challenging in an unregulated market when 23 generating plants can retire on short notice, and it becomes more and more 24 difficult and expensive to deliver power to customers. The concerns regarding 6 1 aging infrastructure and the current market’s inability to address the long standing 2 grid congestion and reliability issues are illustrated by the fact that the last new 3 major transmission line across the major statewide interfaces rated at 345 kV or 4 above constructed in New York was the Marcy South transmission line, which 5 was built over 30 years ago. According to the comprehensive State Transmission 6 Assessment and Reliability Study, or STARS analysis, began in 2008, 7 approximately 4,700 of the State’s 11,000 miles of high voltage transmission lines 8 may need to be replaced in the next 30 years.1 Moreover, choke points on 9 transmission lines between upstate New York and the southeast part of the State 10 result in the NYISO dispatching more expensive generation than it otherwise 11 would, thereby causing “congestion costs” between $765 million2 and $1.1 billion 12 in recent years.3 13 These transmission constraints also restrict the deliverability of generating 14 capacity to meet New York Control Area reliability criteria, which require the 15 system to be planned so that consumers can expect a major service outage no 16 more than one day in ten years (a probability of 0.1 days per year).