Mohawk Valley Project
Response to The New York Energy Highway Request for Information
May 30, 2012
Table of Contents
I.
Executive Summary ............................................................................................................................. 3
II. Respondent Information ...................................................................................................................... 4
III. Project Description............................................................................................................................... 5
IV. Project Justification ............................................................................................................................. 6
Economic Benefits — Energy................................................................................................................. 7
Economic Benefits — Capacity ............................................................................................................ 10
Economic Benefits — Socio-Economic ................................................................................................ 10
Jobs .................................................................................................................................................. 10
Clean Energy .................................................................................................................................... 11
Technology Benefits ............................................................................................................................. 11
Operational / Reliability Benefits............................................................................................................ 12
V. Financial / Cost Recovery ................................................................................................................... 13
Cost Recovery ...................................................................................................................................... 13
Market-Based Transmission Projects............................................................................................... 14
Regulated Transmission Projects..................................................................................................... 15
Reliability Projects ....................................................................................................................... 15
Economic Transmission Projects ................................................................................................ 15
Conclusion................................................................................................................................... 16
VI. Permit / Regulatory Approval Process .............................................................................................. 16
VII. Additional Information ....................................................................................................................... 17
Property ................................................................................................................................................ 17
Projected In-Service Date and Project Schedule ................................................................................. 17
Interconnection ..................................................................................................................................... 17
Construction.......................................................................................................................................... 19
Environmental....................................................................................................................................... 20
American Electric Power Company, Inc.
1 Riverside Plaza
Columbus, OH 43215
Contact: Robert Bradish
Vice President Transmission Grid Development
Tele: (614) 552-1600
Email: [email protected]
I. Executive Summary
On behalf of American Electric Power Company, Inc. (AEP), and its subsidiaries, we are pleased to
submit the Mohawk Valley Project in response to the New York Energy Highway RFI. The Mohawk Valley
Project is a high voltage direct current (HVDC) electric transmission line designed to transmit 1,000
megawatts (MW) of economical and renewable generation from Utica in upstate New York to the primary
load areas in southern New York and New York City, a distance of 250 miles.
The Mohawk Valley Project accomplishes New York Governor Andrew Cuomo’s “Power New York”
objectives of using supply-side energy imperatives to provide facilities that transport low-cost, renewable
energy generated in upstate New York to load centers downstate in the following ways:

The project directly injects power into the existing transmission grid, reducing the current constraints
on the flow of electricity to the downstate area.

The project promotes energy independence for New York by facilitating the transport of economical
and reliable wind and solar generated power within the state. The project also spurs economic
investment in new generating sources and enriches clean energy initiatives.

By injecting power directly into the targeted load area, the project will reduce power flows on critical
transmission facilities, thereby increasing overall system reliability and facilitating the rebuild of the
existing transmission infrastructure.
AEP engaged Charles River Associates (CRA) to perform a high-level evaluation of the project and its
impact on energy, capacity, and socio-economic factors. CRA estimates that:

The project would reduce the costs of electric energy to ratepayers in New York by $70 to $130
million in 2018.

The cost of installed capacity (ICAP) would be $538 million lower in 2018, primarily due to a reduction
in New York City ICAP prices.
The proposal offered by AEP will use ABB’s HVDC Light® converter technology, the most advanced
HVDC technology available. This technology is the best solution for high-capacity power transmission
underground and under water over long distances, ensuring high reliability of the power grid and minimal
environmental and aesthetic impacts. AEP envisions that in the future the project will add connection
points, supporting further transmission of economical and renewable generation from upstate New York
to load pockets in southern New York and New York City. Additionally, AEP will consider provisions to
double the capacity of the project to accommodate future load increases.
To minimize environmental and visual disturbances, the proposed transmission line will utilize existing
transportation, pipeline, and electrical corridors for the underground HVDC transmission line, except
where engineering or environmental constraints require under water or aerial transmission. All options will
examine the use of existing infrastructure rights-of-way to identify the optimal route with the least
aesthetic and environmental impact.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 3 of 20
AEP anticipates that the New York Independent System Operator (NYISO) Comprehensive System
Planning Process to categorize the Mohawk Valley Project as a market-based transmission solution,
therefore we intend to file as a merchant developer at the Federal Energy Regulatory Commission
(FERC) for negotiated rate authority to sell transmission rights of the project.
II. Respondent Information
American Electric Power, Inc.
1 Riverside Plaza
Columbus, OH 43215
Contact: Robert Bradish
Vice President Transmission Grid Development
Tele: (614) 552-1600
Email: [email protected]
Founded in 1906, American Electric Power (AEP) has been a leader in the development of transmission
technology since the earliest days of our history. AEP owns the nation's largest electricity transmission
system, a nearly 39,000-mile network with voltage levels ranging from 23 kilovolts (kV) to 765 kV, and
supported by an annual Transmission budget of over $1.5 billion. AEP's transmission system directly or
indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection and
approximately 11 percent of the electricity demand in the Electricity Reliability Council of Texas (ERCOT).
AEP energized the first long-distance transmission line in 1917, connecting a mine-mouth power plant
with a major load center. Since that time, the company has pioneered advanced technologies in electric
power transmission, generation, distribution, and grid operations. We operate the largest fleet of flexible
alternating current transmission system (FACTS) devices, including back-to-back HVDC and static VAR
systems, in the country. (See Appendix A for photos of AEP installations.)
AEP employs 35 project managers, 300 engineers and 60 planners to manage its 11-state system. While,
we have one of the largest transmission and distribution engineering groups in the nation, we are able to
supplement our internal engineering and project construction management expertise with contract staff
and engineering firms. Our centralized planning organization has decades of experience in meeting the
long-term challenges of the transmission system. Our expertise enables us to independently analyze the
impact of changes in supply and demand fundamentals on the transmission system from both a regional
and national perspective.
AEP risk management experts consistently implement environmental mitigation requirements, ensure
project security, manage project safety, and assure project quality. AEP believes no aspect of our
operations is more important than the health and safety of our employees and contractors. We endeavor
to be a world class leader in all aspects of our operations, especially safety and health, and strive for a
zero harm culture.
As the nation’s leading transmission provider and one of its largest utilities, AEP has significant
purchasing power, enabling us to leverage an extensive network of vendors for efficiencies in pricing. We
cultivate major vendors to meet our exacting engineering and manufacturing standards and reserve shop
space for materials prior to purchase to meet project needs.
AEP has been at the forefront of efforts aimed at modernizing the electrical grid within our service
territory, across the Eastern Interconnection and in ERCOT. These efforts resulted in numerous
collaborative transmission studies and electric transmission joint ventures with likeminded utilities and
partners. AEP currently owns or is developing transmission projects in 15 states. Long-term, joint
ventures outside the corporate footprint with Great Plains Energy, MidAmerican Holding Company, Duke
Energy, Exelon, and Westar Energy provide reliability, economic, and public policy benefits in a cost
effective manner. The largest among these is our $1.5 billion investment in the Texas Competitive
Renewable Energy Zones (CREZ) project through Electric Transmission Texas, a joint venture with
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 4 of 20
MidAmerican. The project includes construction of 16 substations, several FACTS devices, and 465 miles
of transmission lines to deliver Texas wind energy to markets in the ERCOT region.
AEP views this Request for Information as an opportunity to demonstrate our expertise to the state of
New York and to continue to be a leader in modernizing the electrical grid and developing clean,
renewable energy resources.
III. Project Description
The proposed Mohawk Valley Project is a 250-mile, ±320 kV high-voltage direct current (HVDC)
transmission line capable of transmitting 1,000 MW of electric power within the New York Independent
System Operator (NYISO) system.
The underground line will originate near Utica, New York (Oneida County) in NYISO Zone E Mohawk
Valley and terminate within the New York City metropolitan area at NYISO Zone J New York City. The
HVDC line route will utilize existing public rights-of-way as much as possible. Near New York City, the line
will follow existing rights-of-way along transportation infrastructure or will be submerged within the city’s
natural waterways. The project is anticipated to be constructed and in-service by 2018. A map of the
proposed project is included in Appendix B.
Respondent
American Electric Power Company, Inc.
Project Name
Mohawk Valley
Project Type
Electric Transmission
Terminus Points
Utica, NY – Oneida County / greater New York City
Length
250 miles
Technology
High voltage direct current1
Topography
Underground (under water or aerial, if required by
engineering or environmental constraints)
Capacity
1000 MW
Voltage
± 320 kV (symmetric monopole circuit)
NYISO Zones
Mohawk Valley / New York City
In-service Date
2018
The northern terminus will connect with the existing Marcy Substation via a 345 kV line from the AC/DC
converter station. The southern terminus will connect via a new DC/AC converter station and
1
Supplemented with 345 kV connections to existing transmission infrastructure
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 5 of 20
transformation to a new 345 kV AC gas-insulated substation (GIS).2 One 345 kV circuit consisting of twin
345 kV AC cables are proposed to connect from the new GIS station to an existing 345 kV substation.
The project will utilize ABB's HVDC Light® technology. (Appendix C is an ABB brochure that explains the
benefits of this technology. )The AC/DC conversion is carried out in a voltage source converter (VSC)
station using high voltage electronic semiconductor valves. The HVDC cables, also manufactured by
ABB, will be extruded polymer (non-oil) insulated and directly buried underground or under water. This
advanced HVDC transmission technology has been deployed in many applications around the world,
including the Murraylink project in Victoria, Australia3. Connections to existing substations will be made
via traditional 345 kV AC transformers and circuit breakers commonly used by electric utilities.
The Mohawk Valley Project will serve as a new transportation path for electricity within NYISO. Although
its additional transfer capacity will allow greater utilization of efficient, renewable and economic electric
generation in upstate New York, the route can carry power from any generation source. By providing
access to large load centers in metropolitan New York City, the project will encourage development of
new sources of generation.
IV. Project Justification
The Mohawk Valley project will facilitate delivery of excess generation, including renewable resources,
located in upstate New York to the major load centers in southern New York State and the New York City
metropolitan area. Up to 1,000 MW of existing and planned generation resources will be made available.
The project bypasses points of congestion on the existing transmission grid, which today forces
transmission system operators to run less efficient and higher cost generating units located downstate in
order to maintain reliability. The additional resources will lower energy prices, in particular for the New
York City area.
The project supports the Governor’s goal of more efficient use of the state's existing generation
resources, which will make the state of New York more energy self-sufficient. In addition, as less efficient,
higher polluting power plants are retired, the project enables new, more diverse generation resources,
including renewable resources such as wind generation, to be constructed in less populated areas while
still providing reliable energy to the major load centers.
The Mohawk Valley project is anticipated to provide important economic benefits to New York: lower
energy costs, lower capacity costs, preparation for future energy demand growth, and socio-economic
benefits such as jobs and clean energy development. With a direct connection from upstate New York to
New York City that is not constrained by the existing electric transmission infrastructure, the Mohawk
Valley project provides New York City with a virtual power plant without the need for a significant local
footprint.
Several studies, including those by NYISO, demonstrate the economic benefit of providing increased
transmission capability across key interfaces in the New York electricity market. To verify and provide
context for how the Mohawk Valley project fits into the state's long-term transmission strategy, AEP
2
AEP considered termination at either West 49th Street or the Rainey 345 kV stations to compute the benefits of this proposal.
3
The Murraylink project is a 220 MW interconnector between the Riverland in South Australia and Sunraysia in Victoria. It is a 180
kilometer underground high-voltage power link and is believed to be the world’s longest underground transmission system. ABB
has provided a complete HVDC Light transmission system, made up of high-tech extruded cables buried in the ground, with a
HVDC Light converter station at each end of the link. Murraylink Transmission Company Pty. (TransÉnergie Australia), is a
subsidiary of TransÉnergie, the transmission division of Hydro-Québec, Canada. It is now owned by Energy Infrastructure
Investments consortium and operated by the APA Group.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 6 of 20
engaged Charles River Associates (CRA) to perform a high-level evaluation of the project and its impact
on energy, capacity, and socio-economic factors (see Appendix D).
In the interest of time, the scope of the CRA analysis was limited to evaluating a single year, 2018, and
only two scenarios: (1) low-wind (business as usual), which assumed wind generation only with signed
interconnection agreements and (2) high-wind, which included an additional 2.4 GW of wind generation
from the NYISO generation queue. As such, the results are not directly comparable to NYISO and other
publically available economic analyses. However, the results demonstrate the relative value of the project
based on objective economic metrics that directly impact energy costs for consumers. The analysis may
actually understate the total benefits of the project. Should the project move forward in this process, AEP
will perform more detailed studies to more completely quantify the benefits of the project.
Supports Job
Growth
Encourages
Renewable
Generation
Development
(Up to 20,000
man-years)
Enhances Grid
Efficiency
(Reduces average
LMP price by up to
$0.75/MWh)
(2,400 MW of
additional
renewable
resources can be
integrated)
Mohawk
Valley
Project
Environmental
Sustainability
Utilizes Advanced
Technology
(Minimal
construction
impact, connects
renewable
resources)
(Limited line losses,
controllable
resource)
Maximizes
Ratepayer Value
(Ensures system
reliability, provides
reduction in load
payments of
between $70 - $130
million/year)
Economic Benefits — Energy
From an energy market perspective, the primary benefits of the Mohawk Valley project are derived in the
form of reduced congestion costs and lower production costs. The project would mitigate congestion
costs across key NYISO constrained transmission zones. The constrained areas between upstate New
York and downstate New York and New York City limit the flow of low-cost upstate electric generation to
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 7 of 20
downstate markets. The result is a significant price separation between upstate and downstate New York/
New York City.
In addition, these congested interfaces are essentially in series in the same path. While fixing one
constraint would allow more economical power to flow, that energy would inevitably be constrained by the
next constraint downstream. The Mohawk Valley project would bypass all of the major constraints and
provide a path directly into New York City, giving access to low-cost generation and reducing congestion
for southern New York and the New York City metropolitan area customers.
The Mohawk Valley project traverses transmission corridors identified as top congested facilities by
NYISO in the recent Congestion Assessment and Resource Integration Study (CARIS) issued in April
2012 and shown in Figure 1 below.4
Figure 1
As part of CARIS, NYISO identified three top congested facilities in the state of New York based on both
historic and projected trends. To identify the best resolution for congestion, NYISO examined generic
transmission, generation, and demand response and energy efficiency solutions to determine the type of
solution that offers most benefits when compared with its cost.
In the most recent CARIS report, NYISO ratifies the fact that transmission is the best solution to resolve
most congestion in New York State as demonstrated in Figure 2. According to NYISO, transmission
solutions increased savings in production cost5 in New York Control Area by $350 million, $208 million,
and $154 million respectively for each identified corridor.
4
http://www.nyiso.com/public/webdocs/services/planning/Caris_Report_Final/CARIS_Final_Report_1-19-10.pdf
5
NYCA-wide Production Cost Savings = NYCA Generator Production Cost Savings – ΣΣ [ (Import/Export Flow) Solution –
(Import/Export Flow) Base ] x Proxy LMP Solution
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 8 of 20
NYISO utilizes production cost savings as the primary metrics when determining the benefits of solutions.
Production cost savings improve when a solution relieves congestion barriers and ensures an equal
playing field for all generation in a control area, thus enabling more efficient, less costly generation to run.
Figure 2
AEP’s proposed project parallels all three transmission corridors identified by NYISO as congested, and
therefore offers benefits beyond the generic transmission solutions identified by NYISO. Furthermore, the
Mohawk Valley Project offers savings not only in production cost, but also reduces imports into New York
State, reduces the magnitude of load payments, and lowers the average locational marginal prices (LMP).
Though simplified, the CRA analysis verifies the expected benefits. The general benefits for 2018 include:

The Leeds-Pleasant Valley interface is congested for nearly 600 fewer hours per year.

The Dunwoddie-South interface is congested for approximately 1,500 fewer hours per year.

The project is expected to decrease the average LMP within New York City (Zone J) by
approximately $1.77–$2.33 per megawatt-hour, and for NYISO as a whole by $0.41–$0.75 per
megawatt-hour.

The project reduces costs to load by approximately $70-$80 million per year in a business-as-usual
case, and approximately $120-$130 million per year considering increased renewable energy use.
These benefits also increase as more wind is included upstate. The results for NYISO as a whole are
summarized in Table 1 for both the low-wind and high-wind scenarios. Please note that the benefits
reflected are expected only in year 2018. The accumulative impact of the project over its life span is
expected to be far greater.
Where Proxy LMP Solution is the LMP at one of the external proxy buses; (Import/Export Flow) Solution – (Import/Export Flow)
Base represents incremental imports/exports with respect to one of the external systems; and the summations are made for each
external area and all simulated hours.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 9 of 20
Reduction in Imports into New
York State ($-millions)
Reduction in Load Payments
($-millions)
Reduction in Average
Wholesale LMP ($/MWh)
Connection at
th
West 49
6
Street
Connection at
Rainey
Connection at
th
West 49
Street
Connection at
Rainey
Connection at
th
West 49
Street
Connection at
Rainey
Low Wind
$26.2
$17.4
$70.6
$79.3
$0.41
$0.46
High Wind
$43.1
$13.2
$120.6
$129.5
$0.70
$0.75
Table 1
Economic Benefits — Capacity
Due to transmission limitations into southern New York and the New York City metropolitan area, the
current New York City minimum locational capacity requirement (LCR) is 83.9% for May 2012–April 2013.
New York City must have in-city generation resources equal to 83.9% of its expected peak load. The
Mohawk Valley Project would increase the generation import capability to the southern New York and
New York City metropolitan area by bringing up to 1,000 MW of electric generation into the New York City
metropolitan area. This would lower the current minimum LCR and therefore provide savings to
ratepayers.
The nature of the HVDC project is such that it will provide New York with a virtual power plant connecting
generation resources in upstate New York directly with the New York City metropolitan area. The CRA
analysis estimates that the cost of New York's installed capacity (ICAP) would be $538 million lower in
2018 primarily due to a reduction in the New York City ICAP prices. In addition, the project lowers the
state-wide capacity requirement by approximately 200 MW due to the ability to better utilize and share
existing resources. These capacity cost savings will have a direct benefit to customer bills.
The Mohawk Valley project will play a key role in maintaining sufficient capacity going forward, helping
the industry maintain pace with an increased societal reliance on reliable electricity supply. As energy
demand grows, the project will provide the substantial additional capacity needed to serve customer
needs in critical areas. The project is projected to displace the need for new capacity at least through
2020, thus avoiding the need to build new plants in the already congested areas around New York City.
Combined with other energy efficiency efforts and demand response initiatives, this date could be
extended further into the future.
Economic Benefits — Socio-Economic
Jobs
As with any major infrastructure project, there are employment opportunities created by constructing and
operating a new transmission line, as well as opportunities from developing additional renewable
generation resources. Both of which are facilitated by the Mohawk Valley project. These employment
benefits result not only from the direct construction and operations jobs that are created, but also through
jobs created from the supply chain and the local services sector.
6
West 49th Street and Rainey 345 kV stations were used to compute the benefits of this proposal. Other locations will be
considered for the project.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 10 of 20
The direct benefits attributed to the project are related to the construction and operation of the line. AEP
anticipates using the New York state based resources, which will create local employment opportunities
in construction, materials sourcing, manufacturing, environmental mitigation, operations, and
maintenance.
As shown in the CRA analysis, the project would result in 4,000-7,000 man-years of additional
employment in New York State during 2015-2017 (direct and indirect jobs). In addition, the project will
facilitate further development of renewable generation resources within New York, which could create
additional employment opportunities for New York companies and workers. An additional 2.4 GW of wind
built as a result of the project would be an additional 13,000 man-years of employment associated with
wind development in 2015-2017.
Clean Energy
New York State has a large wind resource capability, with about 1,400 MW in service and connected to
the grid and additional projects in various stages of development. These are utility-scale wind projects
located primarily in upstate New York and on the northern side of the major transmission constraints
previously identified. The project would enable the efficient transfer of wind generation from the areas in
upstate to markets in southern New York and New York City.
Over time, without new transmission capability, wind development in upstate New York will exacerbate
constraints and increase congestion. The congestion will result in the curtailments of wind resources, thus
eliminating the benefit of these resources.
As shown in the CRA analysis, the project would allow at least 2,400 MW of additional wind energy to
connect to the system, and more of that wind to move to load pockets downstate. Relative to the low-wind
case, in the high-wind case the downstate/upstate price separation increases because of the additional
wind, which reflects increased congestion. The project’s positive impact on LMPs, load payments and
adjusted production cost is greater in the high-wind case since the project relieves more congestion. In
other words, the value of the project becomes greater as more wind generation is connected to the
system.
As the project facilitates the unconstrained operation of renewable generation resources in upstate New
York, this will contribute to the reduction in the New York state's carbon footprint.
Technology Benefits
The Mohawk Valley project proposes a 250 mile transmission line using voltage source converter (VSC)
based HVDC technology. The anticipated rating is 1000 MW at +/-320 kV DC. The project will use
subterranean and submarine power cables, which offer numerous environmental and aesthetic benefits.
The power line will not be visible, cables will be made of solid dielectric materials free of oil, and converter
substations would require a small footprint. (See Appendix E for photos of converter station.)
VSC based HVDC technology was first introduced in 1997. Many subterranean and submarine
transmission projects up to 500 MW are already in commercial operation and more are under construction
world-wide, including European projects with ratings similar to this proposed project. As this project is
developed, greater capacity solutions can be considered as technology advancements enable increased
equipment ratings. A second identical circuit could also be quite economical if it is constructed
concurrently along the same route.
The proposed project aligns well with the stated New York Energy Highway objectives. The proposed
project will reduce power flow constraints and expand downstate power source diversity. Due to its
inherent reactive power support characteristics, VSC based HVDC technology is particularly well suited to
connect remote generation resources into urban load centers. The unique characteristics of VSC
technology allows the power grid to mimic the performance of a generator at its delivery point, without a
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 11 of 20
new generating plant having to be constructed at that location and with a much smaller footprint. In
addition to creating a “virtual power plant” within the city, it also provides fine power flow control.
The HVDC Light technology proposed for this project offers an effective solution for high capacity
transmission over long distances. VSC based HVDC transmission creates a convenient bypass for
electric delivery from a remote location directly to the city, relieving congestion along other power delivery
paths downstate and into the city. The technology can be installed quickly and provides an alternative to
or complement to conventional transmission systems and local generation. As a result, diverse resources
from remote locations are better able to be delivered downstate.
The proposed technology will assure long term reliability and flexibility while increasing right of way
utilization. The proposed underground technology ensures high reliability since the cables are not
directly subject to most overhead line outage threats, such as lightning, ice and wind loading, and faults
due to vegetation contacts. The VSC technology does not incrementally increase local fault currents
despite the 1000 MW additional capacity. The VSC technology has inherent black start capability and
advantages. This will prove particularly valuable if downstate resources that currently serve system
restoration needs are retired
The route would maximize use of existing rights of way. The expansion of overhead alternating current
(AC) transmission capacity is impractical over much of the anticipated route. Subterranean AC
transmission has many limitations due to the need to compensate for reactive power due to the cable’s
capacitance. And a 1000 MW AC solution would require at least a double circuit 345 kV line with
significant voltage compensation equipment to achieve comparable performance. The use of HVDC
subterranean cables with VSC technology resolves these challenges. This approach not only minimizes
environmental impact, it also improves the quality of the power supply.
This technology will encourage development of utility-scale renewable generation resources
throughout the state. The high capacity, long distance capabilities of this project will provide an efficient
delivery pipeline for renewable sources located upstate. It also has the flexibility to add terminals in the
future for interconnecting new resources, new loads, or reinforcing locations where older generation has
been retired.
VSC technology will support the increased efficiency of power generation, particularly in densely
populated urban areas. As mentioned above, VSC technology appears as a virtual generator at the
receiving end but requires only a fraction of the footprint that new generation would require. Moreover, the
electricity delivered to the city will include a significant share of new, renewable resources. Using HVDC
technology provides for a very efficient low-loss transmission delivery of generation from more efficient
sources. The total operating losses over the 250 miles at full load (1,000 MW), including line and
converter station losses, are estimated to be around 42.5 MW, or 4.25%. These low losses equate to less
overall energy consumption, less required generation, lower costs, and reduced emissions.
Operational / Reliability Benefits
While the Mohawk Valley Project is not designed specifically to address reliability issues, its offers
reliability and operational benefits. Reliability takes on many definitions, but can be summarized into two
main categories: mitigating risk of thermal overloads on transmission facilities, and maintaining a stable
grid voltage. Problems in these areas are the primary threats to maintaining continuous reliable electric
service to customers.
Congestion is an economic symptom of an underlying physical reliability issue, in this case thermal
overloads. As noted, the project establishes a new corridor between upstate and downstate New York,
significantly increasing the ability to move power into downstate New York. By developing this corridor,
the Mohawk Valley Project reduces the potential of overloads on existing facilities and those that run in
parallel into New York City.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 12 of 20
With the retirement of many traditional generating units, ancillary services in the form of voltage support
become an increasingly critical element in maintaining reliability. As described in more detail above, the
VSC technology utilized in the AC/DC converter stations can provide both static and dynamic reactive
power support to stabilize the AC grid voltage. As noted, the Mohawk Valley Project is the equivalent of
building a 1,000 MW generator with 600 MVAr of reactive support capability directly in New York City.
Many existing transmission lines in metropolitan New York are heavily loaded, which makes it
increasingly difficult to obtain maintenance outages for long periods of time. Taking these aging facilities
out of service for maintenance creates significant reliability risk. The Mohawk Valley Project provides
another pathway that would effectively facilitate the maintenance outages necessary to rebuild portions of
the existing system.
V. Financial / Cost Recovery
AEP will work with entities in New York to form mutually beneficial public-private partnerships for the
Mohawk Valley Project. AEP has extensive experience in developing creative partnerships across its
11-state service territory, and we believe having transparent and collaborative relationships ensures
successful completion of capital projects. AEP has engaged a variety of municipal, cooperative, and
public power agency counterparties for construction and ownership of new power projects and long-term
power supply contracts. While the actual terms of an arrangement would be determined as the project
design and parameters become better known, AEP has a demonstrated success in structuring
collaborative, innovative and flexible solutions for customers, partners and stakeholders.
AEP has constructed agreements that provide flexible cash flow requirements and investment needs for
our partners. Potential structures include, but are not limited to, Build, Operate (BO); Build, Operate,
Transfer (BOT), Build, Lease, Operate (BLO); or Build, Lease, Transfer (BLT), which offer flexible
ownership and revenue pricing opportunities. Additional creativity is available through the use of phased
lease payments (structured payment step-ups and step-downs throughout the term) or using components
from both a fixed and variable payment structures (such as pure fixed payments, pure variable payments,
or a combination of them). Variations on these structures can be tailored to fit almost any desired
ownership or participation configuration and they can also accommodate cross-industry and commercial
partners.
Since AEP proposes a long-term ownership in the Mohawk Valley Project, we are open to offering upfront equity interest to various counterparties, including New York state entities, provided we are able to
maintain a credit quality of at least investment grade at the asset level.
Funding sources are anticipated to include public and private debt markets, mezzanine funding, equity
financing as well as other traditional and non-traditional funding sources, depending on the market
conditions of the capital markets. AEP will make every effort to fund the project efficiently in the most
cost-effective manner possible to minimize the cost impact on New York customers. However, the exact
mix of the funding strategy will be determined as the project specifics and recovery mechanism become
clearer.
Cost Recovery
Since the proposed route of the project falls entirely within the NYISO, is the project would be included
within the Comprehensive System Planning Process (CSPP), a three-stage process that includes local
transmission planning, reliability planning, and economic planning, and the project is subject to Reliability
Impact Study/System Impact Study (RIS/SIS) for interconnection to the NYISO electrical system.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 13 of 20
Project developers, if selected by the RFI process, have two options for recovering costs associated with
this project, market-based or regulatory-based (regional cost recovery mechanism).
Market-Based Transmission Projects
A market-based transmission project is an investor proposed solution driven by market needs to meet
future reliability requirements of the bulk electricity grid as outlined in NYISO’s Reliability Needs
Assessment. Attachment Y of NYISO tariff specifically provides that the costs of market-based projects
are the responsibility of the developer (NYISO Tariff, Attachment Y § 31.4.1.2). Therefore, should a
merchant transmission developer proceed with a market-based transmission project, it will be up to that
developer to submit a filing with FERC to sell transmission rights over the project at negotiated rates.
Such a filing would be made pursuant to Section 205 of the Federal Power Act and must meet FERC’s
four-factor test for granting negotiated rate authority to merchant transmission owners. Under the test, the
merchant transmission developer must show: (1) the negotiated rates will be just and reasonable; (2)
there is no potential for undue discrimination; (3) there is no potential for undue preference, including
affiliate preference; and (4) the project will meet applicable regional reliability requirements and will
operate in a coordinated and efficient manner.7
Negotiated rates. As to whether negotiated rates are just and reasonable, FERC assesses whether the
merchant transmission owner has assumed the full market risk for the cost of constructing the project and
whether the project is within the developer’s or its affiliate’s traditionally regulated transmission system. In
the event the merchant transmission owner has assumed such risk and the project is not within the
developer’s or an affiliate’s regulated transmission system, there are no “captive” customers who would
be required to pay the costs of the project. FERC found that the assumption of risk criterion had not been
met (and thus, the rates were not just and reasonable) when a developer proposed a project in the
service area of an incumbent utility affiliate and the utility affiliate played a substantial role in the
preliminary development stages of the project.8
Undue discrimination. Regarding prevention of undue discrimination, FERC assesses: (1) the terms and
conditions of a merchant transmission developer’s open season for subscribing to transmission capacity;
and (2) the developer’s commitments to turn operational control over to the regional transmission
organization or independent system operator (ISO). FERC requires that open seasons be fair,
transparent and non-discriminatory and that reports regarding the open seasons be filed with FERC
shortly after the close of the open season.9
Undue preference. Concerning undue preference and affiliate abuse, FERC has stated that its concerns
regarding affiliate abuse arise when a merchant transmission owner is affiliated with an anchor customer,
participants in the open season, or customer that subsequently takes service over the merchant
transmission line. This concern can be alleviated if the developer shows that none of its affiliates owns or
operates electric facilities in the region in which the merchant transmission project is proposed.10
7
See Chinook Power Transmission, LLC, 126 FERC ¶ 61,143, at P 37 (2009).
8
See Mountain States Transmission Intertie, LLC, 127 FERC ¶ 61,270, at P 61 (2009).
9
Such reports must include the terms of the open season (including notice of the open season and the method for evaluating
bids), the identity of the parties that purchased capacity, and the amount, term, and price of that capacity.
10
See Champlain Hudson Power Express, Inc., 132 FERC ¶ 61,006, at P 51 (2010) (Champlain). FERC granted Champlain
Hudson Power Express, Inc. (Champlain) authority to charge negotiated rates for transmission rights on its proposed merchant
transmission project. Notably, Champlain stated that it had participated in the NYISO’s and ISO-NE’s reliability planning process
and that it intended to transfer operational control over the project to the NYISO and ISO-NE. Linden VFT, LLC is another
example of a merchant transmission developer to which FERC granted authority to sell transmission rights at negotiated rates.
Linden VFT has transferred control over its transmission facilities to PJM, and service over the facilities is offered under Schedule
16 of the PJM Open Access Transmission Tariff PJM Tariff), which is attached for reference. See Linden VFT, LLC, 119 FERC ¶
61,066 (2007).
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 14 of 20
Regional reliability. Finally, FERC has asserted that regional reliability and operational efficiency criteria
satisfied when a merchant transmission developer has turned over operational control of a facility to an
RTO and commits to comply with all applicable reliability rules.11
Assuming FERC grants a merchant transmission developer negotiated rate authority based, in part, on a
developer turning operational control of the project over to the NYISO, the developer would also need to
ensure that the NYISO tariff is amended to provide the terms on which service will be provided over the
developer’s facilities. An example of such a schedule is Schedule 16 of the PJM Tariff, which addresses
transmission service over Linden VFT’s facilities.
Regulated Transmission Projects
For regulated transmission projects identified by the NYISO planning process as solutions to reliability
and economic needs, costs are recovered using a beneficiary pays system.
Reliability Projects
The NYISO identifies the zones affected by a reliability violation that a transmission project will alleviate.
In this case, project costs are allocated among the zones according to their contribution to the reliability
violation.
Schedule 10 of the NYISO Tariff sets forth a Reliability Facilities Charge (RFC) for the recovery of costs
related to each regulated reliability transmission project undertaken pursuant to a determination by the
NYISO that a regulated solution is needed to address reliability needs. The RFC is to be billed by the
NYISO and paid by the load serving entities (LSE) in the load zones for which the cost of the transmission
facilities have been allocated in accordance with Attachment Y of the NYISO Tariff. The formula uses a
revenue requirement as the basis for the RFC Rate ($/MWh) for the billing period, which will be applied by
the NYISO to each LSE based on its actual energy withdrawals.
Attachment Y and Schedule 10 contemplate that “other developers” are eligible to recover their costs
under Schedule 10; however, the other developer must first submit a filing to FERC under Section 205 of
the Federal Power Act and receive approval prior to commencing construction. After the project is
complete, the other developer (with coordination with NYISO, as necessary) must submit another filing
that details the final project cost and resulting revenue requirement to be recovered under Schedule 10.
Specifically, Section 6.10.5.2 of Schedule 10 to the NYISO Tariff provides,
Upon receipt of all necessary federal, state, and local authorizations, including
FERC acceptance of a Section 205 filing authorizing cost recovery under the
NYISO tariff, the Other Developer shall commence construction of the project.
Upon completion of the project, the Other Developer and/or the NYISO, as
applicable, will make a filing with FERC to provide the final project cost and
resulting revenue requirement to be recovered pursuant to this Attachment. The
resulting revenue requirement will become effective and recovery of project costs
pursuant to this Attachment will commence upon the acceptance of the filing by
FERC.
Based on a review of FERC’s eLibrary, it does not appear that any other developers have sought FERC
authorization for cost recovery under Section 6.10.5.2 of Schedule 10.
Economic Transmission Projects
The cost allocation for an economic transmission project follows a beneficiary pays approach, and “other
developers,” such as merchant transmission developers, are eligible for cost recovery. However, in order
11
See Champlain at P 54.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 15 of 20
for regulated cost recovery to be available for a specific project, the project must meet the following
conditions: (1) the benefit of the proposed project must exceed the cost;12 (2) the total capital cost of the
project must exceed $25 million; (3) eighty-percent of the project beneficiaries must support the project by
voting for it in a stakeholder process.
If the project satisfies the eligibility criteria, the NYISO will identify the project’s beneficiaries over the first
10 years of the project by measuring the present value of annual locational marginal price savings for
load in the zones affected by the project, net of reductions in transmission congestion credit payments
and the price of bilateral contracts. For each load zone that experiences a benefit, a portion of the project
cost is allocated based on the zone’s pro rata share of the total savings. Within each zone, the zonal cost
is allocated to each load serving entity based on its share of the total MWh consumed in the zone.
Finally, Section 31.4.3.4.6 of Attachment Y establishes that a developer (such as a merchant developer)
must submit a filing with FERC and that FERC must approve the cost of a proposed economic
transmission project in order for those costs to be recovered through the NYISO Tariff.
Conclusion
The project proposed as part of this RFI addresses multiple drivers for reliability, public policy and
providing economic benefits to the NYISO system. The current tariff for regulated cost recovery
mechanism in NYISO is effective in identifying cost effective solutions on a single-driver basis, but not for
a multitude of drivers, which this project provides. The NYISO requirement that economic projects get an
80% stakeholder project approval adds additional complexity to the development of such projects. A clear
path forward for a regulated cost recovery mechanism would require significant change to the existing
NYISO Tariff, especially with respect to transmission planning and cost allocation. The sponsors
understand that NYISO is working towards changes in the transmission planning and cost allocation in
order to meet FERC Order 1000. Some of these changes could eliminate or reduce the barriers for a
transmission project of this nature to be identified for a regulated cost recovery mechanism. At this time, it
is presumed that the Mohawk Valley Project will be a market-based transmission project and the
sponsors would take the necessary steps to recover the costs associated with this project.
VI. Permit / Regulatory Approval Process
Over the years, AEP has engineered and designed many large transmission projects. We are currently
involved in siting and constructing several large projects, such as the Texas CREZ build out (with over $1
billion in transmission assets) and the 345 KV transmission infrastructures to support the John W. Turk
Power Plant project in Arkansas. As part of these projects, AEP complied with all federal, state and local
regulatory and permitting requirements.
AEP will obtain all required permits and approvals at the appropriate time during the development and
construction phases of the project. The approvals will include, but are not limited to:

After completion of the initial stakeholder outreach, AEP will prepare and submit a Public Service
Commission Article VII Application for a Certificate of Environmental Compatibility and Public Need
(Article VII Application) for the project. This application will contain all the necessary permitting
information and public involvement for proposed and alternative routes.

After approval of the Article VII Application, a comprehensive Environmental Management and
Construction Plan (EM&CP) will be developed and submitted for approval.
12
The benefit is defined as the present value of annual NYISO-wide production cost savings and the cost is the present value of
the project’s annual total revenue requirement, both over the first ten years the project will be in service.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 16 of 20

A New York Independent System Operator Reliability Impact Study will be prepared and submitted to
the NYISO for review and approval.
VII. Additional Information
Property
As asserted earlier, AEP intends to use existing infrastructure corridors, including transportation, pipeline,
and electric transmission corridors, for the Mohawk Valley Project HVDC transmission line. During the
project’s early stages of development, AEP will actively seek ways to minimize possible adverse
environmental impacts and disturbances along the proposed route.
The Utica converter station will require purchase of 5 to 7 acres of land near the New York Power
Authority’s Marcy substation. Additionally, a 150-foot corridor will be acquired for the overhead connection
between the Utica conversion station and the Marcy substation. AEP will select the most optimal
connection point within the New York City area for the final terminus. The converter station there will
require the purchase of between three and seven acres of land; depending on property costs and
converter station design. Rights-of-way for an underground or submarine cable will be acquired to
connect the downstate converter station to the Consolidated Edison transmission system.
Projected In-Service Date and Project Schedule
It is anticipated that the project will have an in-service date of 2018, depending on timely receipt of
required regulatory approvals. A preliminary project schedule can be found in the Appendix F.
Interconnection
The proposed project will interconnect with the existing transmission network in two locations. At the
northern terminus, an interconnection will be established at the New York Power Authority’s Marcy 345
kV substation. At the southern terminus, two potential interconnection points were evaluated within the
Consolidated Edison territory, West 49th Street substation and Rainey 345 kV substation. These
interconnection points were selected based upon the availability of well established extra-high voltage
(EHV) sources and sinks. The interconnection points will allow for power to flow into the proposed line at
the source end and be distributed at the sink end with minimal impact to the underlying AC network. In
addition, these existing substations are relatively accessible and have the physical characteristics
necessary to allow the equipment required for the interconnection.
AEP performed a preliminary system impact study of the proposed project using models obtained from
the NYISO. This study assessed the impact of connecting the proposed project to the existing
transmission system and identified potential reliability benefits as a result of the interconnection. The
primary steady-state load flow analysis of the New York system was performed using the NYISO 2016
model and considered all relevant contingencies.
In the 2011 Congestion Assessment and Resource Integration Study (CARIS)13 report issued in March
2012, NYISO identified New Scotland – Pleasant Valley 345 kV and Pleasant Valley – Leeds 345 kV
transmission circuits among top three congested transmission corridors in New York. NYISO also
confirmed that a generic transmission solution had the highest benefit to cost ratio (B/C) in addressing
congestion on these corridors.
13
http://www.nyiso.com/public/webdocs/services/planning/Caris_Report_Final/2011_CARIS_Final_Report__3-20-12.pdf
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 17 of 20
Load flow results did not show any negative impacts on monitored facilities at or above 100 kV in the
state. The analysis performed did confirm NYISO findings concerning the two most congested facilities in
the state of New York, and demonstrated that the HVDC proposals will significantly reduce loadings on
the parallel 345 kV corridors. This reduction provides incremental reliability margin to the existing system
while relieving congestion. For example, the Mohawk Valley Project reduces the loading on the Marcy Edic 345 kV line by 576 MW for 216 using simulated load flow conditions under normal conditions. The
full impact is summarized in Figure 3.
Reduction in Loadings on Existing 345 kV Lines
Marcy – Edic 345kV: 576 MW
Fraser – Edic 345kV: 178 MW
Marcy – Coopers 345kV: 142 MW
Coopers ‐ Fraser 345kV: 135 MW
Pleasant Valley – E Fishkill 345kV 1 & 2: 138 MW
Rock Tavern – Coopers 345kV: 129 MW
Rock Tavern – Middletown 345kV: 109 MW
Rampo– Smawha 1 & 2 345kV: 216 MW
Figure 3
The analysis also suggests that Smawah – Waldwick 345 kV line and several 138 kV lines in the state of
New York experience thermal loadings beyond their capacity under certain transmission outage
conditions. The project significantly reduces the loadings on these facilities in addition to providing
congestion relief.
NYISO issued Phase II report of New York State Transmission Assessment and Reliability Study
(STARS) report in April 2012. In addition to highlighting congestion and the projected changes in the
generation fleet in state of New York, the report also identified 4,700 miles of transmission that will require
replacement in the next 30 years. Most of the facilities identified for replacement are considered critical
expressways that carry bulk power from the northern parts of the state to major load centers such as New
York City. The Mohawk Valley Project establishes a new corridor that parallels a significant number of the
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 18 of 20
transmission facilities identified by NYISO for rebuild in the 30-year transmission base plan14 outlined in
STARS. The project could be a vital step in easing outage requirements for critical transmission facilities
so they could be rebuilt without jeopardizing the reliability of the grid.
If selected, the Mohawk Valley Project will be submitted to NYISO for a formal System Impact Study. This
evaluation will provide the necessary approval for the interconnection and identify any required network
upgrades.
The characteristics of the HVDC line will facilitate multi-terminal operation, allowing a second intermediate
point of interconnection, if needed, to accommodate changes in generation or to serve load. If warranted,
a second 1,000 MW cable could be installed in the same corridor at the time of construction, doubling the
capacity of the project. The southern terminus of the second cable could be located at the same point,
with additional AC outlets, or at a separate location. The interconnection of the additional 1,000 MW has
not been fully evaluated, but is considered a viable option to be investigated during the next phase of the
project development process.
Construction
The project will be engineered, designed, and constructed using recognized engineering practices and
industry standards to comply with all federal, state and local laws. The Utica converter station will be
contained within a building adjacent to a new open-air 345 kV switching station. The downstate converter
station will be constructed inside a building along with a gas-insulated 345 kV switching station to
minimize the required footprint.
HVDC Line. The HVDC line will be largely located underground except where engineering or
environmental constraints require under water or aerial electric transmission along the route. (See
Appendix G for photos.) Conventional trenching equipment, modified for the installation of the HVDC
underground cables, will be used. HVDC underground cables will be located, where possible, below the
surface within existing rights-of-way. The cable will be installed in a trench that is typically 24 inches wide
by 42 to 72 inches in depth, depending on the characteristics of the route and thermal insulating
properties of the indigenous soil. Cable trays or ducts will be used to install the cable in overpasses and
bridges. Mass. Electric Construction Company, a Kiewit Construction Company subsidiary, is anticipated
to perform construction activities. With regional headquarters in Woodcliff Lake, New Jersey, Mass.
Electric has constructed several electric projects in metropolitan New York and the New York-New
Jersey-Connecticut tri-state area employing local union trade labor. All construction activities will comply
with all federal, state, and local requirements. Appropriate training and personal protection equipment will
be provided so that the construction can be accomplished in a safe and environmentally compatible
manner.
AC Lines. An overhead 345 kV line will be constructed on a 150-foot right-of-way to connect the Utica
converter station to the Marcy substation. The overhead construction will utilize steel poles and bundled
ACSR conductors. The 345 KV AC line connecting the downstate converter station to the Consolidated
Edison transmission system will be primarily a submarine cable beneath water and underground cable on
land. Appropriate training and personal protection equipment will be provided so that the overhead and
cable construction can be accomplished in a safe and environmentally comparable manner.
Alternatives. AEP is fully aware of the importance of building the best solution to meet the Governor’s
initiative. We fully intend to examine and identify the most environmentally friendly and cost-optimal route
in siting the Mohawk Valley Project. To achieve this goal, AEP will optimize existing rights-of-way afforded
14
The base transmission plan developed by NYISO to address aging infrastructure, wind interconnection, generation retirement,
and congestion is available at http://www.nyiso.com/public/webdocs/services/planning/stars/
Phase_2_Final_Report_4_30_2012.pdf.
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 19 of 20
through already established infrastructure projects for transportation, pipelines and electrical transmission
lines.
Environmental
The project will be constructed in an environmentally friendly manner in compliance with all federal, state
and local regulations. All applicable permits and approvals will be acquired in advance of construction.
The construction of the Mohawk Valley Project will use conventional trenching equipment with minimal
rights-of-way requirements, which reduces the aesthetic impact compared to traditional aerial electric
transmission lines. Since the proposed route for the project will use existing transportation corridors and
rights-of-way, adverse environmental impacts will be minimized, if not eliminated. The construction
methods and reliance on underground and submarine placement of the HVDC cable ensures minimal
impact to scenic, historic and archaeological sites
Submitted by American Electric Power Company, Inc.
May 30, 2012
Page 20 of 20
Appendix A:
Photos of AEP
Installations
AEP Static VAR Compensator Installation
AEP Eagle Pass High Voltage Direct Current Converter Station
AEP Laredo Variable Frequency Transformer Installation
Variable Frequency Transformer Rotor
Appendix B:
Map of
Mohawk Valley Project
1 East 13th Street 345 kV station
2 West 49th Street 345 kV Station 3 Rainey 345 kV Station
4 Vernon 138 kV Station
5 Queensbridge 138 kV Station
6 Astoria 345 kV Station 6
2
3
4
1
5
Marcy SS
Appendix C:
ABB HVDC Light®
Brochure
The following is a brief reference document with basic information about HVDC Light technology. A more
complete document with additional project references and a comprehensive description of the technology
and its applications is available at:
http://search.abb.com/library/Download.aspx?DocumentID=POW0038&LanguageCode=en&DocumentPartId=&Action=Launch
Reliable electrical transmission over long
distances, using ABB cable systems
HVDC Light
Installation planned alongside existing road
network. Environmental intrusion minimized.
HVDC Light cables are manufactured at Karlskrona. They are then transported on drums to the location where they are to be buried in the ground. The picture above
shows the first HVDC Light cable, which was installed on Gotland as early as 1999.
With new electrical supply systems, security
is the key to success
When new systems for efficient electrical distribution
are developed and put into use, security, safety and
environmental considerations are the common objectives
for both consumers and producers. They were also the
starting points when ABB developed its concept for
cost-effective power transmission using HVDC Light.
equally obvious as it is self-evident: Connect-hideforget! The cable is designed so as not to cause risks for
personal injury, even if an accident occurs and the cable
is cut by a digger. The power is then immediately cut.
Unhindered by weather conditions such as lightning,
storms and icing, the cable delivers electrical power
in an environmentally friendly, stable manner, with a
minimum of maintenance.
Works all around the clock
Success came quickly. The world’s longest land-based
power transmission cable has worked all around the
clock, day after day. When this document was printed,
the Murray Link in Australia had been in operation
for rather more than four years. A corresponding
installation on a smaller scale, on the Swedish island of
Gotland, has delivered power since the end of the last
decennium.
Quality at every stage
Quality is the most important aspect of our business.
And it applies to the entire chain, from selection of
raw materials to the last installation on site before
power starts flowing. All our quality work is built on
calculations, testing and experience. Each cable must,
for example, be qualified before it is produced and
delivered. This assumes type-testing, where the cable
is subject to different types of stresses in accordance
with internationally defined demands, amongst others
extremely high voltages for short periods of time, in
proportion to the cable’s performance. This was done
with HVDC Light, qualified for 150 kilovolt, and
also for a corresponding cable with a capacity of 300
kilovolt. Theory and practice bound together in one
unit.
Connect-hide-forget
It is with this real-life experience that ABB puts its
unique competence, as well as its quality stamp within
cable systems into play, in order to compete for the
investments that are needed to strengthen Europe’s
electrical transmission network. Through similar
projects, we know that the future is already here.
This brochure is our way of sharing our thoughts
about a secure, long-term and cost-effective means
of electrical distribution, that will continue working
even when hard autumn storms rage. The idea is as
Quality verified production
ABB produce cable systems using well proven
technology. They are based on the same production
technology used for our alternating current cables.
The splicing technique is important. When the splice is correctly executed,
it unites two lengths of cable to a harmonic unit with exactly the same
performance as the cable itself. The technique is developed and certified by
ABB, who have also produced and installed several sea cables with extremely
high safety demands, using the same methods.
The ends of both cables are spliced with a splicing sleeve, shown before the
splice is installed. The figure shows two cable ends and a splicing sleeve. The
splice is in the background.
ABB has used these processes for more than 30 years, with
installations all around the world, even in many towns
and municipalities in Sweden. Production of HVDC
Light is made in lengths of about one kilometre. Splices
are made with the same high quality demands. They
are prefabricated and designed to couple together cable
lengths to single units when installed.
Our employees are given continuous training in splicing
and each splice is qualified and tested in the same way
as the cable. The cable system comprises harmonic units
that have the same quality demands.
The installation fades into the background
The installation of the cables is important. To the outer,
it is very similar to the extensive installation of optical
fibre cable that is currently in progress. There are
however, considerable differences:
We dig somewhat deeper, to increase the mechanical
protection and safety aspect.
Installing our cables alongside well established road
networks, without having to close off traffic, is both
cost-effective and environmentally friendly. This principle
has been used in many installations, all around the world,
for a considerable number of years. We have solved cable
laying problems across water by using bridges or by
drilling beneath the bottom. We have always chosen the
most efficient and environmentally friendly alternative,
while retaining efficiency and safety.
Advantages of HVDC Light
HVDC Light is not just a cable construction, it is also
a cost-effective and environmentally friendly system for
When the cable is installed, there is no trace of it except the markers. The photo is from
Gotland and the cable is buried in the right hand road bank.
secure electrical distribution. Unlike alternating current,
where people and animals are exposed to a magnetic field
that alternates in time, HVDC Light cables have a static
field that is considerably less than the earth’s magnetic field
and thus harmless.
The proposed EU norm is 100 times higher than the earth’s
magnetic field.
No disturbances
Our cables are buried in the ground. There is no visible
intrusion and existing overhead transmission lines can be
torn down, something that has already occurred in Bergshamra
in Stockholm, where traditional transmissions lines where
previously placed over a nursery school. Noise disturbances,
that always occur with overhead transmission lines, are
eliminated.
Comparable total costs
The cost for burying cables in the ground is usually calculated
as somewhat higher than aerial lines with a corresponding
technical capacity.
However, there has been a considerable narrowing of the gap
over the last few years. The lifespan for our cable solution
has turned out to be greater than previously calculated and
the cost of interruptions due to storms affects the calculation
positively, to the advantage of the land-cable solution.
In addition, the cost of right of way is less and the buriedcable alternative has a more positive effect on both forestry
and agriculture, as well as on cultural and leisure activities
in the area affected. Our opinion is that the buried-cable
alternative, from a social-economic perspective, creates a
win-win-situation for both the consumer and the producer.
ABB has more than 50 years experience of cable installations around the world.
Hillary Clinton congratulating a successful project. Cross Sound was put
into operation in 2002 and has functioned since then with no interruptions.
So far, ABB has installed more than 1600 km
of HVDC Light cable.
Here are a few examples:
Facts about HVDC Light cables for power transmission
Land cable projects
Power 300 MW - 1100 MW
Murray Link, Victoria - South Australia
The longest land cable in the world
200 MW at 150 kV, 2 x 180 km, year 2002
Weight 10-20 kg/meter depending on capacity
Diameter 10 cm
Gotland, Sweden
50 MW at 80 kV, 2 x 70 km, year 1999
Insulation Plastic (extruded polymer)
Conductor 1000 mm2 aluminium
Submarine cable projects
All materials are recyclable
Estlink, Estonia - Finland
350 MW at 150 kV, 2 x 75 km submarine cable,
2 x 29 km land cable, year 2006
Trench width normally seven meters, can be reduced to
four meters
Voltage 300 kV
Type tested for 592 kV
Troll A gas platform, Norway
80 MW at 80 kV, 4 x 68 km, year 2004
ABB AB
High Voltage Cables
Tel +46 455 - 556 00
Fax +46 455 - 556 55
E-mail: [email protected]
www.abb.com/cables
Extract from a debate:
’“By burying cables, one creates a better environment
for those who live nearby. One also ensures better
delivery security as well as releasing valuable land for
building development”
ABB HVC 2GM5060 eng 2007-06
Cross Sound, USA
330 MW at 150 kV, 2 x 42 km, year 2002
Appendix D:
Charles River
Associates Project
Evaluation
A high-level evaluation of the Mohawk Valley project and its
impact on energy, capacity, and socio-economic factors
AEP Proposal to NYPA Energy
Highways Initiative
Impact on Energy Prices, Capacity Prices, and
Employment
Overview
•
•
•
•
•
2
Executive Summary
Project Description
New York ISO Energy Markets
New York ISO Capacity Markets
Other Economic Benefits in New York State
Executive Summary
3
Executive Summary (1)
• AEP is proposing a 1,000 MW HVDC line that will connect Marcy
Station near Utica with New York City
• The Project will provide a new path from Zone E (Ithaca) into Zone J
(New York City), and will relieve congestion on several major
constraints
• Benefits from the Project include:
–
–
–
–
4
Reduced congestion and lower adjusted production costs
Access to more renewable energy
Lower in-city capacity prices and overall NYISO ICAP costs
Employment and other economic benefits.
Executive Summary (2)
• CRA estimates that the Project would reduce the costs of
electric energy to ratepayers in New York by $70 to $130 million
(2011 dollars) in 2018
– Benefits are greater with increased upstate wind penetration
• CRA estimates that the cost of ICAP would be $538 million lower
in 2018 primarily due to a reduction in New York City ICAP
prices
• CRA estimates that the Project would create:
– 4,000 – 7,000 man-years of additional employment in New York State
during 2015-2017 (direct and indirect jobs)
– If the 2.4 GW of wind in the queue for upstate New York is built as a result
of the Project, there would be an additional 13,000 man-years of
employment associated with wind development in 2015-2017
5
Project Description
6
Project Description (1)
• AEP is proposing a 1,000 MW HVDC line that will connect Marcy
Station near Utica with New York City
– The Project will connect either to West 49th Street in Manhattan, Rainey in Queens,
or possibly Astoria in Queens
– For this analysis, we analyzed only a West 49th Street terminus and a Rainey
terminus
• The New York ISO is divided into 11 zones, with prices generally higher
in downstate zones due to transmission constraints that limit
inexpensive power that originates in upstate New York or is imported
into upstate New York (from Hydro Quebec or Ontario) from reaching
downstate load centers
7
Project Description (2)
8
Project Description (3)
• In addition to being a source of low-cost conventional power and
Canadian imports, upstate New York has significant wind power
potential. Tapping these wind resources will further strain the
transmission system
• The Project will provide a new path from Zone E (Ithaca) into Zone J
(New York City), and will relieve congestion on several major
constraints including:
– Central-East Interface/Leeds-Pleasant Valley1
– Dunwoodie-South
• Benefits from the Project include:
–
–
–
–
Reduced congestion and lower adjusted production costs
Access to more renewable energy
Lower in-city capacity prices and overall NYISO ICAP costs
Employment and other economic benefits.
The Central-East and Leeds-Pleasant Valley constraint are approximately in series. In our analysis, the major
congestion appears on Leeds-Pleasant Valley.
1
9
New York State Energy Markets
10
Geographic Scope of the Electricity Market Analysis
• CRA analyzed the impact of AEP’s Project using the GE MAPS model
• CRA modeled 2018, the expected in-service year for the Project
• CRA used its Northeast version of GE MAPS that includes:
–
–
–
–
–
11
New York ISO
ISO New England
PJM
Ontario
Hydro Quebec (for technical reasons modeled as proxy generation and load in ISO
New York and ISO New England)
GE MAPS Study Design
• CRA ran six GE MAPS cases:
– A Low Wind Case without the Project (“Low Wind”)
– A High Wind Case without the Project and with 2.4 GW more wind in upstate New
York (“High Wind”)
– For each of the Low- and High-Wind cases, we ran a Project Case with the Project
terminating at either W. 49th Street or at Rainey
Case Names
Project
Wind
12
None
W. 49th St.
Rainey
Low Wind
Low Wind
Project Low Wind - W. 49th
Project Low Wind - Rainey
High Wind
High Wind
Project High Wind - W. 49th
Project High Wind - Rainey
Key Assumptions
• We assume that Indian Point remains in service in 2018
• Our natural gas prices are based on the EIA Annual Energy Outlook
2012 forecast (Henry Hub Forecast of $5.06/MMBtu in 2011 dollars)
• Coal prices are estimated using CRA’s North American Electricity and
Environment Model (“NEEM”)
• NEEM analysis is also used to develop new capacity and unit
retirement assumptions
• The Low Wind Case includes all wind farms currently under
construction or with a completed interconnection agreement
• The High Wind Case includes 2.4 GW of additional capacity from wind
farms in the interconnection queue outside of Zones J and K (Long
island)
• Load comes from the NY Gold Book
13
Electricity Market Metrics
• CRA measured the Project’s impacts on the cost of electricity in terms
of:
–
–
–
–
Change in congested hours
Changes in LMPs
Change in load payments
Changes in adjusted production cost on a state-wide basis
• All reported values are between a Base Case without the Project and
case with the Project (“Project Case”)
• LMP impacts are reported as changes in the load-weighted, average
LMPs by zone
• Load payment impacts are LMP impacts times zonal load
• Adjusted production cost for New York State as a whole
14
Results – Overview
• Interconnecting the line at either W 49th St or Rainey causes
– A decrease in congestion from upstate to downstate and west to east
– Energy prices in Zones J and K fall
– Energy prices in the Rest-of-State increase, but the state-wide load-weighted price of
energy across NYISO falls
• Relative to the Low Wind Case, in the High Wind Case
– The downstate/upstate price separation increases because of the additional wind,
which reflects increased congestion
– The Project’s positive impact on LMPs, load payments and adjusted production cost
is greater in the High Wind Case since the Project relieves more congestion
• In general the price impact of the line is greater with a Rainey
interconnection than with a W 49th St interconnection
15
Results – Congested Hours
Leeds-Pleasant Valley
Dunwoodie-South
Leeds-Pleasant Valley
Dunwoodie-South
16
Low Wind Penetration
Hours Constraint Binds
Change in Hours Constraint Binds
Without HVDC
West 49th St
Rainey
West 49th St
Rainey
Line
Interconnection Interconnection
Interconnection Interconnection
896
319
299
(577)
(597)
3,185
1,616
1,686
(1,569)
(1,499)
High Wind Penetration
Hours Constraint Binds
Change in Hours Constraint Binds
Without HVDC
West 49th St
West 49th St
Rainey
Rainey
Line
Interconnection Interconnection
Interconnection Interconnection
965
349
334
(616)
(631)
3,376
1,914
1,927
(1,462)
(1,449)
Results – Impact on Price Paid by Load
New York City: Zone J
Long Island: LIPA
NY Rest of State
NYISO (Total)
New York City: Zone J
Long Island: LIPA
NY Rest of State
NYISO (Total)
17
Low Wind Penetration
Average Wholesale LMP ($/MWh)
Change in Average LMP
Interconnection Interconnection
Interconnection Interconnection
at W 49th St.
at W 49th St.
at Rainey
at Rainey
No HVDC Line
$59.95
$58.18
$57.87
($1.77)
($2.08)
$63.34
$62.72
$62.71
($0.63)
($0.64)
$46.32
$46.84
$46.94
$0.52
$0.62
$53.29
$52.88
$52.83
($0.41)
($0.46)
High Wind Penetration
Average Wholesale LMP ($/MWh)
Change in Average LMP
Interconnection Interconnection
Interconnection Interconnection
at W 49th St.
at Rainey
at W 49th St.
at Rainey
No HVDC Line
$59.76
$57.71
$57.43
($2.04)
($2.33)
$63.25
$62.53
$62.59
($0.72)
($0.66)
$45.79
$45.95
$46.02
$0.16
$0.23
$52.93
$52.23
$52.18
($0.70)
($0.75)
Results – Impact Load Payments
New York City: Zone J
Long Island: LIPA
NY Rest of State
NYISO (Total)
New York City: Zone J
Long Island: LIPA
NY Rest of State
NYISO (Total)
18
Low Wind Penetration
Cost of Load ($000s)
Change in Cost of Load
Interconnection Interconnection
Interconnection Interconnection
at W 49th St.
at Rainey
at W 49th St.
at Rainey
No HVDC Line
$3,443,097
$3,341,244
$3,323,699
($101,852)
($119,397)
$1,561,967
$1,546,465
$1,546,253
($15,502)
($15,714)
$4,190,462
$4,237,196
$4,246,290
$46,733
$55,827
$9,195,527
$9,124,906
$9,116,242
($70,621)
($79,284)
High Wind Penetration
Cost of Load ($000s)
Change in Cost of Load
Interconnection Interconnection
Interconnection Interconnection
at W 49th St.
at Rainey
at W 49th St.
at Rainey
No HVDC Line
$3,431,858
$3,314,682
$3,298,129
($117,176)
($133,729)
$1,559,657
$1,541,862
$1,543,280
($17,795)
($16,378)
$4,142,297
$4,156,628
$4,162,902
$14,331
$20,605
$9,133,812
$9,013,172
$9,004,310
($120,641)
($129,502)
Results – Adjusted Production Costs (1)
• In the Low Wind Case, the W 49th St and Rainey lines lower adjusted
production costs by $21.7 M and $17.9 M, respectively
• In the High Wind Case, the W 49th St and Rainey lines lower adjusted
production costs by $28.3 M and $30.4 M, respectively
• The impact is larger in the High Wind Case because the addition of low
cost renewable generation in upstate New York creates congestion
downstate which the line relieves
• Relative to the Low Wind Case in the High Wind Case:
– W 49th St connection results in an additional $6.6 million in production cost benefits
– Rainey connection results in an additional $12.4 million in production cost benefits
19
Results – Adjusted Production Costs (2)
Low Wind Case
No HVDC Line
$ (Millions)
+ Production Cost
+ Purchases
+ Sales
+ Wheel Costs
+ Wheel Revs
= Net Costs
$3,292.0
$955.9
($376.4)
$3.2
($2.3)
$3,872.4
Interconnection Interconnection
at W 49th St.
at Rainey
$3,292.9
$929.6
($373.0)
$2.9
($1.8)
$3,850.7
$3,289.5
$938.5
($374.6)
$3.0
($2.0)
$3,854.4
W 49th St.
Change
$0.9
($26.2)
$3.5
($0.3)
$0.4
($21.7)
Rainey Change
($2.5)
($17.4)
$1.8
($0.2)
$0.3
($17.9)
High Wind Case
No HVDC Line
$ (Millions)
+ Production Cost
+ Purchases
+ Sales
+ Wheel Costs
+ Wheel Revs
= Net Costs
$3,080.4
$873.1
($380.3)
$3.2
($2.9)
$3,573.5
Interconnection Interconnection
at W 49th St.
at Rainey
$3,094.1
$830.0
($379.2)
$2.8
($2.5)
$3,545.2
$3,078.2
$843.0
($378.5)
$2.9
($2.5)
$3,543.2
W 49th St.
Change
$13.7
($43.1)
$1.1
($0.3)
$0.3
($28.3)
Rainey Change
($2.2)
($30.2)
$1.9
($0.2)
$0.4
($30.4)
High Wind Case - Low Wind Case
No HVDC Line
$ (Millions)
+ Production Cost
+ Purchases
+ Sales
+ Wheel Costs
+ Wheel Revs
= Net Costs
20
($211.6)
($82.7)
($3.9)
($0.0)
($0.6)
($298.9)
Interconnection Interconnection
at W 49th St.
at Rainey
($198.8)
($99.6)
($6.3)
($0.1)
($0.7)
($305.5)
($211.3)
($95.5)
($3.9)
($0.1)
($0.5)
($311.3)
W 49th St.
Change
$12.8
($16.9)
($2.3)
($0.1)
($0.1)
($6.6)
Rainey Change
$0.3
($12.7)
$0.0
($0.0)
$0.1
($12.4)
Results – Adjusted Production Costs (3)
• The Project results in a reduction in in-City (Zone J) gas fired
generation (both Combined Cycle and Steam) and an increase in
upstate (Zones C and F) gas
• The increase in Zone C (Central) and Zone F (Capital) combined cycle
generation with the line in service also results in a reduction in imports,
mostly those into downstate and New York City
21
New York State Capacity Markets
22
Capacity Market Overview
• CRA used its New York ISO Capacity Price model to estimate the
impact on the New York City and New York Control Area (“NYCA”)
ICAP prices
• While the offer floor prevents the Project’s full 1,000 MW to count as
ICAP in Zone J in the summer of 2018, it will result in new supply of
450-500 MW in Zone J, which will lower the Zone J ICAP price
• It will also result in about 200 MW less capacity needed state-wide in
2018, which will slightly increase NYCA prices beginning in May 2018
• The net effect is a reduction in ICAP costs in New York by $631 million
in nominal dollars or $538 million in 2011 dollars
23
Results – Capacity Prices and Costs (Nominal $)
With Line
Price ($/kW)
Total
2018
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
24
NYCA
4.88
4.88
2.94
2.65
9.13
9.13
9.13
9.13
9.13
9.13
5.36
5.80
Zone J
7.68
7.68
7.68
7.68
15.55
15.55
15.55
15.55
15.55
15.55
7.86
7.86
Cleared UCAP (MW)
NYCA
44,483
44,483
45,392
45,526
43,086
43,086
43,086
43,086
43,086
43,086
44,831
44,626
Zone J
11,506
11,506
11,506
11,506
11,096
11,096
11,096
11,096
11,096
11,096
11,704
11,704
Cost ($ Million)
Zone J
NYCA Premium Total
4,204
217
217
133
121
393
393
393
393
393
393
240
259
32
32
55
58
71
71
71
71
71
71
29
24
249
249
188
179
465
465
465
465
465
465
270
283
Without Line
Price
NYCA
4.88
4.88
2.94
2.65
8.70
8.70
8.70
8.70
8.70
8.70
4.93
5.37
Zone J
13.25
13.25
13.25
13.25
21.61
21.61
21.61
21.61
21.61
21.61
13.44
13.44
Cleared UCAP
NYCA
44,483
44,483
45,392
45,526
43,286
43,286
43,286
43,286
43,286
43,286
45,031
44,826
Zone J
11,062
11,062
11,062
11,062
10,616
10,616
10,616
10,616
10,616
10,616
11,262
11,262
NYCA
217
217
133
121
376
376
376
376
376
376
222
241
Cost
Zone J
Premium Total
4,835
93
93
114
117
137
137
137
137
137
137
96
91
310
310
247
238
514
514
514
514
514
514
318
332
Savings
($ M)
631
60
60
60
59
49
49
49
49
49
49
48
49
Capacity Market Impacts – Key Assumptions
• Reference points for NYISO ICAP Market demand curves escalate at 1.7%
annually through 2014, 2.4% thereafter
– Zone J: $23.33/kW-mo for 2017/18; $23.77/kW-mo for 2018/19
– NYCA: $10.69/kW-mo for 2017/18; $10.95/kW-mo for 2018/19
• Capacity Requirements:
– NYCA Installed Reserve Margin (IRM) = 118% of coincident peak load
– NYC Local Capacity Requirement (LCR) = 83% of Zone J peak load
– Conservatively, line is assumed to have no effect on IRM or LCR
• HVDC line subject to buyer-side mitigation at default offer floor
• Generic new capacity added in Zone J when supply falls below 101% of Zone
J LCR
– Consistent with NYSO assumption of persistent surplus applied in demand curve reset process
– New capacity added in 200 MW increments, consistent with NYISO reference technology
• Zone J capacity additions in advance of 2018:
– Astoria Energy 2 (on line)
– Bayonne Trent 60 GTs (2012)
– Hudson Transmission Partners HVDC cable (2013)
25
Capacity Market Impacts – Key Drivers
• Absent the HVDC Project, 200 MW capacity added in Zone J in May 2018
– Competitive entry, consistent with NYSO demand curve assumptions
– Adds supply in both Zone J and overall NYCA markets
• With the HVDC Project, new entry in Zone J not required
– Allows up to 1,000 MW of upstate surplus to become deliverable to NYC
– Without 200 MW of new capacity, statewide supply is decrease, increasing NYCA
clearing price relative to case without the line
– But NYC price pushed down to offer floor, lowering the premium paid to Zone J
resources needed to meet LCR
– Net effect is a decrease in aggregate statewide costs
• Offer floor prevents full 1,000 MW from clearing in NYC
– Approximately 450 MW addition ZONE J capacity clears in winter 2017/18,
– Approximately 680 MW clears in summer 2018, displacing 200 MW of additions
– Net increase in Zone J supply of 450-500 MW summer
26
Capacity Market Cost Impacts
• Impact of lower Zone J price
– 475 MW of incremental Zone J supply lowers Zone J ICAP price by approximately $5.75/kW-mo
– Cost impact for 11,000 MW of Zone J ICAP purchases = $63 million monthly
• Offset by higher NYCA price
–
–
–
–
No impact on statewide price before May 2018
Thereafter 200 MW of decreased statewide ICAP increases NYCA price by $0.43/kW-mo
ICAP purchased outside of Zone J = 43,000 MW (NYCA) – 11,000 MW (Zone J) = 32,000 MW
Results in $14 million/month increase in cost of non-Zone J capacity
• Net cost impact for 2018
– 4 months at $60 million
– 8 months at $49 million
– Annual impact of $630 million
• Cost savings diminishes over time
– Additional new capacity displaced through 2020
– Zone J surplus created by line absorbed with load growth by 2025
27
Other Economic Benefits in New York State
28
Employment Impacts – Overview
• The Project will contribute to New York state employment in four ways:
1.
Construction of the transmission line - (2015-2017)
•
•
2.
Operations and maintenance (O&M) of the transmission line - (ongoing)
•
3.
4.
Local construction crews and consultants
Local manufacturers
O&M of the new generation - (ongoing)
•
Local maintenance and repair crews
Each was evaluated separately using:
–
–
–
–
–
29
Local maintenance and repair crews
Construction of new generation made possible by the transmission line - (2014-2017)
•
•
•
Local construction crews and consultants
Local materials suppliers
Available Project data
Assumptions about component and materials sourcing
Proprietary data from other transmission projects
Comparable transmission impact studies, and
Advanced economic modeling
Employment Impacts – Transmission Construction Impacts
• The following is AEP’s preliminary estimated cost breakdown:
Cost category
Estimated Cost
Installed converters
$340 million
Cable
$500 million
Construction/Other
$360 – 660 million
Total
$1.2 – 1.5 billion
• The cost categories were broken into their labor and materials
components by examining data for comparable projects
– Labor share of installed converter cost estimated at 35%1
– Cable installation labor covered under “construction/other”
– Construction/other was assumed to be 75% construction labor and 25% local materials
• To be conservative, converters and cable equipment were assumed to be
sourced from outside New York
1
30
based on capital/labor ratios for other converter investments
Employment Impacts – Transmission Construction Impacts
• All construction is assumed to be completed by local labor
– Includes tasks such as right-of-way clearing, trenching, laying/welding pipe, duct
bank and vault installations, backfilling, cable installation and site restoration
– Local contractors, under a minimal amount of imported engineering
guidance/supervision, can conduct all of these tasks
• Labor impacts/multipliers were calculated using the input/output model
IMPLAN…
– IMPLAN is the most commonly used tool to evaluate supply chain impacts of
transmission investments. It also calculates impacts of local spending of labor
income and payments to local suppliers. We call these “indirect” impact in this study.
• …and then reality-checked against results of other studies that
included more detailed Project data
31
Employment Impacts – Transmission Construction Impacts
• Direct employment related to construction activities average between
620 and 970 full-time equivalents1 (FTEs) per year for three years
– The variation is between the low and high construction cost estimates provided by
AEP, heretofore referred to as the “low cost” and “high cost” cases
• Related activity along the supply chain and elsewhere in the regional
economy leads to indirect employment of 810 to 1,340 FTEs per year
for three years
• This is a total of 1,440 to 2,910 FTEs per year
Annual FTEs (for 3 years)
Direct
Indirect
Total
Direct
Total FTEs
Indirect
Total
Low cost case
620
820
1,440
1,870
2,450
4,320
High cost case
970
1,350
2,320
2,920
4,040
6,950
An FTE is the equivalent of one person working full time for one year, though it may represent a
combination of multiple part-time employees or overtime by full-time employees
1
32
Employment Impacts – Transmission Construction Impacts
• Our estimates are more conservative than almost every other transmission
construction impact study reviewed, when compared on a comparable
investment level (FTEs per $1.5 billion (2012$) in construction capital costs)
Project Name
Location
1 Wyoming HVDC / HVAC Export
Wyoming
2 Generic U.S. line
U.S. average
Length
Capacity
225 mi (HVDC) 3,000 MW /
/310 mi (HVAC) 1,500 MW
Total Capital
Cost (2012$)
$2.2 billion /
$1.3 billion
Total FTEs per $1.5 billion
Direct
Indirect
Total
7,463
16,701
24,165
18,500
Oklahoma /
Arkansas /
Tennessee
750 mi
7,000 MW
$3.6 billion
3,717
13,820
17,536
4 Rock Island Clean Line
Iowa / Illinois
500 mi
4,000 MW
$1.5 billion
4,850
12,275
17,124
5 Maine Power Reliability Program
Maine
$1.6 billion
5,943
2,233
8,175
6 This Project - High Cost Case
New York
250 mi
1,000 MW
$1.5 billion
2,920
4,030
6,950
7 Champlain-Hudson Power Express New York
333 mi
1,000 MW
$2 billion
900
3,600
4,500
8 Arrowhead-Weston Line
Wisconsin
220 mi
4,000 MW
$321 million
9 M29 Transmission Line
New York
350 MW
$480 million
Plains and Eastern Clean Line
Project
3
Study authors: 1) NREL, 2) Brattle Group, 3) Perryman Group, 4) Loomis Consulting, 5) Maine Ctr for
Business and Economic Research, 6) CRA, 7) LEI, 8) NorthStar Economics (for ATC), 9) Con Edison
33
2,455
1,384
Not given
Employment Impacts – Transmission O&M Impacts
• Includes operations, maintenance and repair work at the converter
stations and along the transmission line
• Adjusted O&M annual costs of other studies to match project specifics
– Previous studies have suggested up to 1% of total capital costs are spent per year
on O&M
– Conservatively adjusted to 1/3 of that level to reflect differences in construction FTE
estimates
• The FTEs are annual for the life of the line (X years)
Direct
O&M
34
30
Annual FTEs
Indirect
20
Total
50
Employment Impacts – New Generation Construction Impacts
• We used the High Wind Case as the basis for evaluating impacts of
constructing and operating new generation as a result of the line
– Assumes 2.4 GW of wind turbines are installed from 2015-2017
• We used NREL’s JEDI model to estimate the New York State
employment impacts of the new wind farms
– Adjusted the turbine sourcing assumptions to reflect the actual state of wind-related
manufacturing in New York (GE’s local plants supplied 30% of installed and underconstruction wind farms in New York State)
Sources: NY Dept of Environmental
Conservation, Energy Velocity,
developers websites and filings, CRA
Analysis
35
Employment Impacts – New Generation Construction Impacts
• Direct employment related to construction activities average between
610 FTEs per year for three years
• Related activity along the supply chain and elsewhere in the regional
economy leads to indirect employment of 3,650 FTEs per year for
three years
– About 850 of these annual FTEs are related to in-state turbine manufacturing
• This is a total of 4,260 FTEs per year for three years
Annual FTEs (for 3 years)
Direct
Indirect
Total
610
36
3,650
4,260
Direct
1,830
Total FTEs
Indirect
10,950
Total
12,780
Employment Impacts – New Generation Construction Impacts
• These estimates are similar to estimates from other studies that assume
similar levels of component imports, when compared on a comparable capacity
level (FTEs per MW of wind)
Project Name
Location
Estimated Regional turbine
Wind Build manufacturing
Total FTEs
Direct
Indirect
Total
3,888
35,112
39,000
Average FTEs per MW of
Wind Capacity
Direct Indirect Total
Rock Island Clean Line
Iowa / Illinois
4 GW
100%
Renewable Energy in
Pennsylvania
Pennsylvania
3.6 GW
0%
1.9 GW
not specified
1,473
8,495
9,968
0.8
4.6
5.4
1.7 GW
20%
4,050
4,650
8,700
2.4
2.7
5.1
9 GW
0% (50% of
towers)
2,300
19,700
22,000
0.3
2.2
2.4
Wind Energy
Illinois
Development in Illinois
Wind Energy
Development in
Washington
Washington
Wyoming Transmission
Wyoming
Study
1.0
8.8
28,523
9.8
7.9
Project
New York
2.4 GW
30%
610
3,651
4,261
0.3
1.5
1.8
Wind Energy
Development in
Colorado
Colorado
1.8 GW
10%
1,290
1,500
2,790
0.7
0.8
1.6
37
Employment Impacts – New Generation O&M Impacts
• Includes operations, maintenance and repair work at the wind
farms and its connections, as well as off-site management
• The JEDI model also estimates O&M employment impacts
– These were not adjusted from the model’s presets
Direct
O&M
38
150
Annual FTEs
Indirect
240
Total
390
Employment Impacts – Summary Tables
• Construction (2015-2017)
Average Annual FTEs
Direct
Indirect
Total
Direct
Total
Low
624
816
1,441
1,873
2,449
4,322
High
972
1,345
2,317
2,916
4,035
6,951
610
3,651
4,261
1,830
10,954
12,784
Low
1,234
4,467
5,702
3,703
13,403
17,106
High
1,582
4,996
6,578
4,746
14,989
19,735
Transmission
Wind
Total
• O&M (ongoing)
39
Total FTEs
Indirect
Direct
Annual FTEs
Indirect
Total
Transmission
27
20
47
Wind
150
240
390
Total
177
260
437
Appendix E:
Photos of
Converter Station
Cross Sound Cable, Shoreham converter station, 330 MW, aerial view.
Building dimensions are 80 x 25 x 11 m (L x W x H).
© ABB Group
May 29, 2012 | Slide 1



Possible layout of compact VSC station for 500 MW. Dimensions in this
configuration are 48 x 25 x 27m (L x W x H). Ground floor: Transformer and ACside filters.
First floor: Phase reactors, converter valves, control and cooling equipment, DCside filters and cable terminations.
Second floor: Cooling fans, which may be omitted if a nearby river or other water
is available for cooling.
© ABB Group
May 29, 2012 | Slide 2
Appendix F:
High-Level
Project Schedule
Mohawk Valley Line - HVDC Cable
Schedule (May 2012) - DRAFT
10
11
2013
12
1
2
3
4
5
6
7
2014
8
9
10
11
12
1
2
3
4
5
6
7
2016
2015
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
2017
8
9
10
11
12
1
2
3
250 MILES, 1,000 MW HVDC TRANSMISSION LINE
Public Outreach & Preparation of Siting
Application
Article VII Application Submittal & Review
Environmental Management & Construction Plan
NYISO Reliability Impact Study / System Impact Study
Engineering & Procurement
ROW Acquisition
Line Construction
4
5
6
7
2018
8
9
10
11
12
1
2
3
4
5
Target In-Service Date
2012
9
6
7
8
9
10
11
12
Appendix G:
Photos from
Murraylink Project
Photos of the HVDC line being laid underground
using trenching equipment modified for the
installation of the HVDC underground cables.
© ABB Group
May 29, 2012 | Slide 1
© ABB Group
May 29, 2012 | Slide 2
© ABB Group
May 29, 2012 | Slide 3