Weak economy helps New York avoid power problems

NEW YORK, May 21 (Reuters) - New York's power grid operator does not expect any reliability problems during the next 10 years as efficiency gains and the recession take a toll on demand, the New York Independent System Operator (NYISO) said in a report this week.

The NYISO said the state would have about 42,500 megawatts of supply, which is more than enough to meet the projected peak demand of about 35,600 MW plus the required 16.5 percent reserve in 2018.

The reserves provide sufficient resources to cover the unexpected loss of a power plant or transmission line.

In addition to the efficiency gains and weaker economic growth taking a toll on demand, the grid operator also pointed to the expected construction of new generation, increased consumer participation in demand response programs and fewer plant retirements as reasons the grid would remain reliable during the next decade.

The NYISO, however, warned the unexpected shutdown of a nuclear reactor at Indian Point, located about 45 miles (72 km)north of New York City, would cause an immediate violation of reliability standards if other resources were not available to address the need.

Each reactor at Indian Point can produce more than 1,000 megawatts, which is enough to power about a million homes.

Entergy Corp (ETR.N: Quote, Profile, Research), Indian Point's owner, filed with the U.S. Nuclear Regulatory Commission in 2007 for permission to extend the plant's original 40-year operating licenses for another 20 years. The current licenses expire in 2013 and 2015. The NRC does not expect to make a decision on the renewal until sometime after February 2010.

In addition, the NYISO warned an unexpected retirement of other generation due to the implementation of new programs to control smog or higher than expected Regional Greenhouse Gas Initiative (RGGI) carbon allowance prices could also create reliability concerns.

NYISO operates the grid serving New York State and administers the wholesale electricity market with a generating capacity of more than 39,000 MW. (Reporting by Scott DiSavino; Editing by Lisa Shumaker)