New York Citys demand for electricity is fast eclipsing its supply. While last summer was unseasonably cool, demand still came perilously close to the citys peak capacity. With supplies tight, prices on the states so-called Real Time Market (where utilities buy energy to meet short-term demand) shot up by as much as 1,800 percent. Though only 5 percent of the citys electrical supply comes from this volatile market, the peak-time price jolts (perhaps somewhat amplified by gauging) were big enough to raise consumer electricity bills by 43 percent in June.
The New York Power Authority (NYPA), estimating that the city would require at least 315 megawatts of additional daily capacity to stabilize the market and prevent future price spikes, purchased ten natural gas-powered turbine generators in late 2000 and is currently placing them on six sites citywide. Together theyll add 408 megawatts to the citys electrical capacityenough, power providers hope, to get the city through this summer, even if its hot enough to push the daily peak load up above 11,000 megawatts.
Shortsighted politicians and community activists, though, have charged the NYPA with "environmental racism," painting a grim picture of pollutants being "jammed down the throats" of "communities of color." They want the sites to undergo laborious 14-month environmental reviewsnot legally required for plants operating at this low level of capacity. For their part, the New York State Assembly Democrats, rather than building new capacity, want to impose price caps and spend $1.5 billion on conservation and alternative energy sources in order to deal with the power shortage.
These are woefully wrongheaded ideas. The environmental racism charge is spurious. The ready availability of cheap empty lots close to high-pressure gas lines and high-voltage substationsnot racismsparked the speedy placement of these generators. Though conservation programs might eventually save a few hundred megawatts, they cannot provide for the citys ever swelling need, and alternative energy sources are not sufficiently cost- and space-efficient to be the answer (see "How Cities Green the Planet," Winter, 2000). In a growing economy, new consumptionmore people, holding more jobs, using more powerful and power-hungry computerswill quickly gobble up the energy saved by such tinkering at the edges. As for price controls: California has shown that they generate only shortages.
A steady supply of cheap, clean energy is essential to New Yorks future prosperity. As Peter Huber, author of a forthcoming book on energy policy, observes: "Gotham used to import fabric and export garments; now it imports electrons and exports bits." Electricity is the lifeblood of the citys dynamic economy, sustaining its industries and its infrastructure. A prolonged heat wave this summer could trigger blackouts, resulting not only in dozens of heat-related deaths but also in hundreds of millions of dollars in economic damage.
These ten hotly contested turbines provide only a small fraction of the additional power New York will need five years from now, estimated at between 2,000 and 3,000 megawatts a day. Well need bright state and city political leadershipwilling to consider new and updated transmission lines, and the use of nuclear power plantsto keep the city plugged in.