So far this year, for reasons yet to be identified, the Jamestown Board of Public Utilities has incurred congestion charges as high as $100,000 - an amount far in excess of previous years, according to Dave Leathers, BPU general manager.
Congestion charges - which are incurred when the normal flow of electricity that isn't generated in Jamestown is interrupted for whatever reason and must be rerouted along a different path - are administered by the New York Independent System Operators, the independent agency that regulates the 10,000 miles of power lines and all power transactions in New York state.
The spike in congestion charges recently prompted BPU officials to pay a fixed cost of almost $78,000 to avoid these expenses for a one-year period beginning Nov. 1, a program NYISO reportedly provides utilities like the BPU that receive power from Niagara Falls under long-term contract agreements.
High-voltage transmission lines deliver electricity from Niagara Falls to the Jamestown Board of Public Utilities Dow Street substation while excess power generated at the Samuel A. Carlson Generating Station is transported from the city and sold on the grid.
P-J photo by Patrick Fanelli
According to Leathers, it isn't clear what caused the spike in congestion charges, an issue utilities don't often have to deal with west of the Hudson Valley.
But it is likely to become an increasingly important issue for utilities in Upstate New York as National Grid plans to spend millions of dollars improving and upgrading the region's aging transmission system - and that work could require the same kind of power rerouting and congestion charges.
''We have an aging infrastructure and evolving power demands in new places and increased demand in certain places where we need to beef up the system,'' a National Grid spokesman said Friday, adding the company plans to invest $1.5 billion in the power transmission and distribution system statewide.
BPU officials have expressed reservations about the National Grid project since they say it could double the transmission charges that show up on ratepayers' monthly bills - and as of now they have no way of becoming involved in the planning process.
''National Grid is going to spend money, and National Grid is going to attempt to recover that money in their transmission rates,'' Leathers said.
The electricity the BPU receives from Niagara Falls - the source of most of the BPU's power- is transported via high-voltage transmission lines to the Dow Street substation. The same lines are used to transport excess power produced at the city's coal-fired power plant that is sold on the grid.
In February, BPU officials reported that National Grid was seeking approval from both the state Public Service Commission and the U.S. Federal Energy Regulating Commission for a transmission rate increase to pay for the upgrades, as much as doubling what that charge is now.
BPU officials also said they would spend $100,000 fighting beside five other utility companies, including Salamanca's, to involve themselves in the regulatory and approval process due to their own concerns about the transmission grid upgrade project.
''It's not necessarily the most-effective, efficient and cost-effective way to do that project,'' Leathers said. ''Someone has to be accountable for the economics.''
According to Leathers, who recently attended a New York Association of Public Power conference at which he was elected third vice president/secretary, there is a growing concern over the economics of the NYISO market at large, and that's an issue he thinks will likely be discussed a great deal in the months and years to come.
''You're going to see more out there about fair rates for electricity and challenges to this kind of system operation,'' Leathers said.
The Post-Journal was unable to reach National Grid spokespersons for comment Friday regarding the upcoming transmission improvement project.