Con Edison Seeks to Avoid Building $1 Billion Substation

Consolidated Edison Inc. (ED) will ask technology-savvy hipsters and churchgoers in Brooklyn and Queens to power down and save $1 billion.

New York City’s utility will release a proposal as early as next week to provide customers with incentives to invest in more efficient lighting, batteries, rooftop solar panels and other strategies to reduce reliance on the power grid, said Robert Schimmenti, vice president of engineering and planning. Such a move would delay the need to build a substation to handle surging demand in the city’s two fastest growing boroughs until at least 2024, he said.

The Manhattan-based company is moving ahead of a New York state energy plan, a draft of which was released two months ago by the Public Service Commission, which aims to reduce dependence on larger power plants.

“This is a very big step in a very different direction,” Schimmenti said in a telephone interview yesterday. “If we don’t set an aggressive target in the short term then we won’t get to these new innovations. So we are purposely going out in the next couple of weeks with requests for new ideas.”

Power consumption has jumped in the two boroughs as gentrification spurred growth, especially among the technology-savvy 24- to 35-year-old demographic, Schimmenti said. Their population rose a combined 3.2 percent to 4.9 million people in July 2013 from April 2010, accounting for a quarter of the state’s population, according U.S. Census Bureau estimates on the New York Department of City Planning’s website.

Growing Population

Keeping up with the population growth, Con Edison’s long-term planning team determined that it would cost the utility $1.1 billion to build the substation and related infrastructure to go online by 2019, Schimmenti said. The population growth is testing the limits of the utility’s infrastructure.

The company’s plan to invest in programs to reduce electricity consumption and build local supply will cost an estimated $100 million to $150 million while deferring construction of the substation until 2024. Total savings for customers will be $400 million to $500 million, he said.

Con Edison seeks to expand on existing programs, such as controlling home air conditioners remotely and other efficiency programs, and to add new ones using to spur rooftop solar and battery technology.

The company has already deployed 8,000 units provided by ThinkEco Inc., which plug into air-conditioners, allowing consumers to control them through smartphones.

Seeking Projects

The utility will issue a request for information within the next two weeks for 52 megawatts of projects that either produce power or cut back on usage. From 10 to 20 megawatts of supply will need to be online by June 2016, with the rest coming two years later, Schimmenti said. Power consumption in the boroughs totals about 800 megawatts.

Con Edison will also file for regulatory approval to pass on costs through rates and to obtain new funding sources as early as next week. The company is still working out the details of the new plan.

“We are working side by side with the regulator,” Schimmenti.

To contact the reporters on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net; Jonathan N. Crawford in New York at jcrawford47@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Bill Banker

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