By the OGJ Online Staff
HOUSTON, Sept. 11 -- New York energy regulators plan to assess the impact of rising gas demand, especially for electricity generation, on the state's electric system and natural gas infrastructure.
New York is located at the end of most gas transmission lines and could run into a situation in which demand exceeds supply, said William J. Museler, CEO of the New York Independent System Operator.
Nearly all the 22 proposals for power plants seeking construction permits expect to utilize natural gas as fuel, the New York State Energy Research and Development Authority (NYSERDA) said. Some projects won't be approved, but gas use is expected to increase, potentially stressing the system.
"This study is intended to assess that risk and provide us with information we need to effectively manage our fuel supplies long into the future," Museler said.
Regulators are also concerned about fuel switching at power plants. When gas prices jumped to $10/Mcf this past winter, some generators switched to fuel oil which was cheaper on a btu basis.
Results of the $738,500 plan will be used to develop a model and to update the state energy plan, said NYSERDA Pres. William M. Flynn. The model will have the ability to assess the operation of the electric and gas systems under a range of conditions and contingencies that could effect service or energy supplies, he said.
The study will assess numerous factor, including:
-- Whether New York's gas supply is adequate to serve the needs of heating demand as well as the growing demand as a power generation fuel.
-- What happens to the market for petroleum fuels, if electric generating facilities switch to fuel oil for extended periods of time.
-- Whether the existing network of pipelines can handle the increased flow of gas that the proposed power plants will need.
-- How increased reliance on gas will affect the diversity of fuels used to generate electricity in the state as well as the ability to transition to a more competitive electricity market.
