September 21, 2010

CEO of New York State Power Authority Says State Could Face Impending ‘Crisis’

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Richard Kessel, president and CEO of the New York Power Authority, outlined his vision for the future of energy in New York State in a presentation at the Africana Center Tuesday. According to Kessel, if officials do not invest enough resources into developing the state’s energy, New York could find itself in trouble quicker than some may believe.

“I think we’re going to have an energy crisis in New York in a few years,” Kessel said.

Kessel said that in order to ensure long-term energy stability and prevent some kind of crisis, the state will need to expand its infrastructure, encourage economic development, and incorporate more renewable energy.

He said that the number one concern for the NYPA –– a company responsible for providing about one-quarter of the energy for New York state –– is “keeping the lights on,” which will require investing in capital facilities and building new ones. He added, however, that because it takes six to seven years to build new plants, if the state does not begin soon, it could run into trouble as electricity use spikes.

“In two or three years when the economy recovers, the growth in electricity is going to be extraordinary,” Kessel said.

He noted that if New York does not have the resources well in advance of this energy use increase, there will be energy shortages, which could lead to blackouts. He balked at current predictions that the state would not need new power plants until 2018, adding that he believes those predictions to be “preposterous.” Kessel said that he forecasts problems as early as 2012.

“One thing you don’t do with energy is sit on your butt … if you have to think about the lights going on then you’re in trouble,” he said.

There are alternatives, however. Previous responses to state recessions have included the NYPA building smaller plants in the region, until larger, more long-term ones could be completed, according to Kessel.

“Nothing works if energy doesn’t work,” Kessel said.  “If we don’t have electricity then we can’t have growth.  Our job is to make sure we have the transmission lines.”

Another main function of the NYPA, according to Kessel, is job creation in order to spur economic development. He said that there are two main ways to create jobs –– either by encouraging private investment in the state or by initiating energy projects.

“We’re trying to bring new companies in and keep companies that are already here by lowering their electrical costs,” Kessel said.

He cited a new plant that Yahoo! opened in western New York –– its first facility on the east coast –– as an example. He believes that the region’s climate, the local government’s tax breaks and the low cost power that was provided for them in that area made it affordable for the company to invest in western New York.

He emphasized, however, that initiating renewable energy projects may be the best way to create jobs and build a sustainable energy model.

“I learned at [the Long Island Power Authority] that once you build something, it’s hard to make it energy efficient,” Kessel said.  “We have to build to LEED [Leadership in Energy & Environmental Design] standard,” an industry benchmark of a structure’s environmental impact.

The NYPA recently launched a 100-megawatt solar panel project in the state. There are currently just 21 megawatts of solar energy, so it will “quintuple” the amount of solar energy in the state, according to Kessel.  He said that these panels will be installed over the next three years and the state will begin to award contracts next month.

He also said that he remains a major proponent of harnessing energy from offshore wind. He supports plans for a large wind farm on the Great Lakes, which will generate an additional 120-500 megawatts of energy.

“It has to be done,” Kessel said, adding that it has the potential to create tens of thousands of jobs.

Other projects that NYPA is currently pursuing include building a transmission line under the Hudson to provide New York City with 660 megawatts of energy from New Jersey, as well as a major transmission line from Canada to New York City. The Canada line, in particular, could enable the state to import 2,000 megawatts of wind power and save the state from building three additional power plants.

NYPA is currently in negotiations with the parties involved before beginning construction on either project.

Before becoming the president and CEO of NYPA, Kessel ran the Long Island Power Authority for seven years, where he was best known for his acquisition of the Long Island Lighting Company. Valued at $7 billion, the purchase stands as one of the largest governmental acquisitions of a municipality ever.

For Kessel, energy is not an exact science, but more of a creative endeavor.

“There is no magic bullet to energy,” Kessel said.  “It’s a portfolio of what makes sense. Our portfolio in New York is too fossil fuel oriented.  We need a mix of things — renewables are not going to do it alone.  Everything has to work together.”

Original Author: Laura Shepard