NYC ENERGY POLICY TASK FORCE 2006 STATUS REPORT # Recommendation Category Update 2006 Status In April 2005, Con Edison began commercial operation of its state-of-the-art natural gas fired steam-electric generators at its East River Repowering Project (ERRP). The facility is capable of producing 3 million pounds of steam per hour and has an electric capacity of 288 MW. Its output allowed Con Edison to retire its Waterside Complete plant south of the United Nations building. The former site of the Waterside plant is now part of a major mixed use redevelopment project. On December 31, 2005, the New York Power Authority (NYPA) commenced commercial operation of the 500 MW New Poletti combined cycle generating plant in Astoria, Queens. The project was developed by NYPA on - behalf of the Southeast New York (SENY) governmental customers, which include the City of New York, New Complete r " York City Housing Authority, MTA, and the Port Authority among others. Commercial production began in May 2006 for the new SCS Astoria Energy 500 MW state-of-the-art electric generating facility located in Astoria, Queens. The financing of this project was enabled by a 10-year power Complete Support innovative means to finance appropriate purchase agreement with Consolidated Edison Company of New York, Inc. 1 Energy Supply electricity projects As of April 2006, the City of New York and other Southeast New York governmental customers, through NYPA, are finalizing a 10-year renewable energy purchase for approximately 20 MW beginning in 2008 from Horizon Substantially Complete Wind Energy LLC, which is developing wind farms in upstate New York. LU -1> t) In spring 2005, NYPA, on behalf of the City of New York and other Southeast New York govemmental customers, awarded multi-year, energy only, power purchase agreements starting in 2008 to Entergy Corporation and Complete Morgan Stanley Capital Group Inc. In March 2005, NYPA, on behalf of the City of New York and other Southeast New York govemmental customers, Substantially issued a Request for Proposal for 500 MW of new in-City capacity beginning as early as 2008. As of May 2006, O Complete 2'. NYPA is evaluating the proposals. w « LUin UJ LU On January 19, 2006, EDO and the Energy Policy Task Force (EPTF) members held a roundtable of industry experts to discuss barriers to financing new power plants in New York City. In summer 2006, the Task Force will Substantially Q O !'J be crafting policy, regulatory, and legislative recommendations for the purpose of facilitating financing of new Complete ! ^= power plants in the City. The State Assembly and Senate both introduced legislative proposals in early 2006. EPTF members led by the City of New York and the Natural Resources Defense Council (NRDC) will continue to work with the Independent Advocate in Albany for the immediate passage of the 2 Energy Supply Article X Power Plant Siting Law Power Producers of New York (IPPNY) and others to craft a compromise bill. However, the prospects for the Re -Launched passage of new siting legislation are uncertain at this time due to the magnitude of the differences between the two leading proposals. Con Edison, EDO and several other members of the EPTF are conducting a comprehensive steam plant Facilitate appropriate siting of power plants and other production study that will examine the cost to produce steam for Con Edison rate payers and will explore 3 Energy Supply Substantially energy facilities repowering options for Con Edison steam plants. The results of Phase 1 of the study will be reported to the Public Complete Service Commission (PSC) by summer 2006 subject to confidentiality rules. Page 1 of 10 NYC ENERGY POLICY TASK FORCE 2006 STATUS REPORT # Recommendation Category Update 2006 Status Con Edison is preparing to begin construction on a new 345 kV feeder from Sprain Brook, north of Yonkers, to the new Sherman Creek Switching Station in Upper Manhattan. The project will address significant load growth in the Bronx and Upper Manhattan, and increase the total transfer capability into the City by about 345 MW. The Launched City of New York is providing support and working with Con Edison on siting issues and approvals for the feeder and switching station. Con Edison completed their "System Reliability Assurance Study" (SRAS) in December 2005. The study shows that New York City and Long Island will not need new resources until 2012, and possibly as late as 2014 depending on the success of demand-side initiatives adopted by the PSC. The study indicates that Distributed Complete Resources and new transmission capacity may be cost-effective methods to meet future requirements. The / study may be viewed at - http://www.nycedc.com/Business_lncentives/Energy/srasreportdec2005.pdf The 2005 Energy Policy Act requires the Federal Energy Regulatory Commission (FERC) to create national mandatory electric reliability standards. The City of New York and other EPTF members were successful in Support the development of appropriate transmission 4 Energy Supply securing language in the Act that preserves New York State's right to set reliability standards that are more Complete lines stringent than those for the rest of the country. In 2006, the City of New York and other EPTF members will continue to work with FERC in the implementation of those standards. The City of New York, Con Edison, and several other members of the EPTF are participating in and supporting the New York Independent System Operator's (NYISO) ongoing Comprehensive Reliability Planning Process. Substantially The purpose of the planning process is to determine future New York State electric reliability needs and to Complete request market-based solutions, including alternative regulated solutions, as well as backstop solutions from the responsible transmission owners to meet the identified reliability needs. In March 2006, the City of New York publicly urged the federal Department of Energy to designate a New Jersey to New York City electric transmission priority pathway as a National Interest Electricity Transmission Corridor (NIETC). Such a designation would serve as a means of reducing regulatory uncertainty for developers of Launched transmission facilities. In addition, the City of New York has recently taken steps to encourage the FERC to help create incentives that will facilitate investment in new transmission lines. Broadwater Energy filed an application with FERC in January 2006 for the construction of a proposed liquefied natural gas facility in Long island Sound. Several members of the EPTF have intervened in the FERC Launched proceeding. 5 Support diversity of fuel supply Energy Supply EPTF member KeySpan Energy has taken an equity interest in the Millennium Pipeline that is projected to reach New Yori< City in its second phase of development. In August 2005, Millennium Pipeline Company filed an Launched application with the Federal Energy Regulatory Commission (FERC) to allow it to initiate Phase 1 of construction from Corning to Ramapo, New York. The application is currently under review at FERC. Page 2 of 10 NYC ENERGY POLICY TASK FORCE 2006 STATUS REPORT # Recommendation Category Update 2006 Status The Con Edison Electric rate case settlement, approved by the PSC in March 2005, includes authorization for Con Edison ratepayers to contribute up to $224 million over a three-year period in order to achieve 300 MW of demand reduction, in addition to 300 MW projected by NYSERDAfrom System Benefits Charge III, and an additional 75 MW from NYISO and Con Edison load relief programs, for a total goal of 675 MW of Distributed Complete Resources, which includes energy efficiency, demand response, and clean on-site generation. The Demand Management Action Plan was approved by the Commission in March 2006. The PSC Order may be viewed at - http://www.nycedc.com/Business_lncentives/Energy/PSCOrderMar2006.pdf With the support of the City of New York and the other EPTF members, the Public Service Commission approved Energy Efficiency - Support increased investment in Distributed 6 a 5-year extension of the SBC program at its December 2005 session. The SBC program is administered by the energy efficiency Resources New York State Energy Research and Development Authority (NYSERDA) and serves as the primary public funding mechanism in New York for Distributed Resources. The 5-year extension, which begins in July 2006, Complete includes an increase in annual state-wide funding to $175 million as well as an increased focus on peak load reduction programs, green building design, and low-income programs. The PSC's Order approving the extension may be viewed at - http://www.dps.state.ny.us/sbc.htm Five million dollars was set aside in the Con Edison Gas & Steam rate case approved in 2004 for a new gas efficiency three-year pilot program. The pilot also includes a gas efficiency potential study that was completed in Substantially May 2006. Through its role on the Con Edison Gas Efficiency Advisory Group, the City of New York and other Complete EPTF members will continue to advocate for the creation of a permanent comprehensive gas efficiency program. The City of New York, NRDC, Con Edison and other EPTF members were successful in advocating for the passage of the "New York State Appliance and Equipment Energy Efficiency Standards Act of 2005," which was signed into law by Governor Pataki in July 2005. The bill gives the New York Department of State and NYSERDA Complete the authority to promulgate energy efficiency performance standards for four categories of new appliances and equipment sold in New York that are not presently regulated. The four categories are: incandescent reflector lamps, metal halide lamp fixtures, power supplies, and consumer audio and visual products. Energy Efficiency - Support legislation and regulatory The City of New York and other EPTF members are serving on the New York State Appliance Efficiency Distributed 7 rule-making to set and/or enhance appliance standards Standards Advisory Group convened by NYSERDA and the New York Department of Slate as required by the Resources and targeted incentives at the state and federal levels Appliance and Equipment Energy Efficiency Standards Act.