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Executive interview: ‘Hydro assets are more important than ever’

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Executive interview: ‘Hydro assets are more important than ever’
(photo courtesy New York Power Authority)

Joseph F. Kessler is executive vice president and chief operating officer of the New York Power Authority in the U.S. He oversees NYPA’s power generation and transmission assets, commercial operations and the New York State Canal Corporation’s operations. Before assuming this role in 2016, he was senior vice president of power generation, responsible for oversight of NYPA’s generating facilities across New York State.

Kessler is chairman of NYPA’s Asset Management Board and a member of NYPA’s Enterprise Risk Management Committee. He also serves as executive sponsor of NYPA’s Multicultural Employee Resource Group. Kessler is a board member of the Hydropower Research Institute and the Northland Workforce Development Center, has served on the Electric Power Research Institute’s Generation Sector and Research Advisory Councils, and is on the Low-Carbon Resources Initiative Board Working Group and the Large Public Power Council’s Operational Executive Working Group.

In this exclusive interview, Kessler discusses his vision for the future of NYPA, the importance of its hydroelectric assets and the main challenges for its hydropower facilities.

Q: Please give our readers a general overview of New York Power Authority, including your hydroelectric facilities.

Kessler: Founded in 1931, the New York Power Authority, known as NYPA, is the largest state-owned power organization in the U.S. — operating 16 generating facilities, including two large hydroelectric projects, the Niagara Power Project in western New York and the St. Lawrence–FDR Power Project in northern New York. More than 80% of the electricity NYPA produces is clean renewable hydropower, supplying New York with about a quarter of its electricity needs on any given day. NYPA also owns and operates one-third of the state’s major transmission lines.

Niagara hydropower

Q: You’ve been with NYPA since 2001, in a variety of positions. What is your vision for the future of this organization?

Kessler: My vision for the future of the organization is encapsulated in NYPA’s strategic plan, called VISION2030, with a focus on five strategic priorities.

The first strategic priority is to Protect and Preserve the Value of Our Hydro Assets. Why? Because our hydro is the critical renewable base for our clean energy future. New York’s Climate Leadership and Community Protection Act (CLPCA or the Climate Act) is the most ambitious state decarbonization legislation to date. To achieve its goal of 70% renewables by 2030 in an economically feasible manner, we need to preserve our hydro.

The second priority is to Pioneer the Path to Decarbonization. The planet, in varying degrees, is on a decarbonization pathway and NYPA seeks to be at the forefront of that essential movement.

The third priority is to be the Leading Transmission Developer, Owner, and Operator for New York State. NYPA has a unique mix of transmission experience and expertise that can be capitalized upon to work toward a clean energy economy for New York. We have the technical capability to develop transmission where it is most needed across the state.

The fourth priority is to Help our Customers Meet their Energy Goals. Our government and municipal customers look to NYPA to provide expertise and solutions to help them achieve their most far-reaching energy aspirations.

And fifth, we are Reimagining the NYS Canal System, which is now under our purview. We want the state’s iconic canal system to be an engine for economic growth while achieving sustainability and resilience. While the Erie Canal used to be a substantial economic driver, the canals today serve primarily as a recreational asset. We are expanding our focus to help drive economic development in the towns along the canal that have incorporated the waterway into their history and are providing popular local recreation and tourism offerings to hundreds of thousands of people, New Yorkers and visitors alike, each year.

Q: How does being a state agency influence NYPA’s work and direction?

Kessler: Let’s begin with the fact that NYPA’s VISION2030 Plan was developed to support New York’s clean energy goals. Established in 2019, the state’s Climate Act provides the path to full decarbonization of New York’s electricity grid by 2040 and a carbon-neutral economy by 2050. We have embraced NYPA’s role in assisting our customers – primarily towns, villages and cities across New York State – on their journey to a thriving, carbon-free economy. The five strategic priorities of VISION2030 are carefully designed to achieve the clean energy goals of our energy customers and New York State as a whole.

Q: NYPA recently began the conferral process to shape its next steps and plans. What will be the ultimate outcome of this process?

Kessler: Governor Kathy Hochul’s administration has made important progress developing clean energy and transmission infrastructure. The governor’s landmark legislation enacted in the 2023-24 State Budget includes expanded authority for NYPA to develop, own and operate renewable energy generation assets.

Working closely with the Governor’s Office, we drafted budget provisions that will leverage the Power Authority’s strengths, further advancing New York’s clean energy goals through:

  • Developing decarbonization action plans, aimed at lowering carbon emissions, or the highest-emitting state entities.
  • Planning to cease production of electricity from natural gas at the Power Authority’s small power plants in New York City.
  • Supporting disadvantaged communities with a new Renewable Energy Access and Community Help program, or REACH, which will enable low- and moderate-income New Yorkers to receive bill credits from renewable projects developed by NYPA.
  • Supporting the renewable workforce of the future, with the Department of Labor, through an annual contribution of up to $25 million for workforce development in the renewable energy sector.

To fully achieve these objectives, we need a spectrum of perspectives on how we can best advance our bold climate action goals to ensure that everyone benefits from the new clean energy economy.

To that end, Power Authority team members are gathering input from state agencies and interested parties regarding progress to date on the implementation of New York’s renewable energy goals as outlined in Climate Act. We want to ensure that New York stakeholders have a voice in how this legislation is implemented.

Q: What does the term “modern hydropower” mean to you?

Kessler: The future of hydropower projects will involve more sophisticated, digital controls that will be able to achieve greater flexibility, accommodate more frequent starts and stops, better monitor asset conditions and support wider operating ranges. Although many U.S hydropower projects are decades old, initiatives such as NYPA’s Next Generation Niagara modernization program are digitizing the controls of 1960’s-era hydroelectric plants. This process will ensure hydropower facilities can support the clean energy revolution and the continued introduction of intermittent renewable energy.

Q: What is the main challenge for your hydropower facilities or portfolio?

Kessler: As renewable energy resources continue to enter the market, hydropower assets are at risk of being increasingly curtailed by cheaper, and subsidized, renewables. The resulting increase in rapid start-ups and operating below capacity drives higher operations and maintenance costs and impacts system costs for all ratepayers. A change in market and policy conditions is necessary to enable NYPA’s hydroelectric assets to serve New York energy consumers optimally. Another challenge is siting new facilities. This requires that we build relationships that recognize and proactively address any potential impacts these plants may have on their host communities.

Q: What is the most striking change you have witnessed for hydropower recently?

Kessler: As I mentioned above, the intermittent nature of renewable energy has brought dispatchable energy resources like hydropower into the spotlight and underscores why hydro assets are more important than ever. When the sun doesn’t shine and the wind doesn’t blow, New York is blessed to have great waterways and two dispatchable and flexible hydropower plants that are poised to consistently ensure the uninterrupted delivery of power.

Q: You spoke during the utility executive roundtable session at HYDROVISION International 2023 in July. Can you give us some insight into a couple of the hot topics for NYPA that you covered?

Kessler: Growing New York’s access to renewables requires that we place a high priority on the modernization of the transmission system. The upgrade and expansion of the grid is the only way we can ensure that everyone benefits from the flow of new renewable energy sources. This is why we are implementing the most ambitious transformation of New York’s grid in more than forty years.

NYPA is making great strides in making sure that once the clean energy is generated, the transmission lines are updated, operational and available to carry it across the state to where it is most needed.

HVI roundtable

Q: Any final comments/thoughts on the future of hydropower?

Kessler: Preserving and enhancing the role of hydropower is a two-part process: First, it involves making sure that our plants are optimized to perform to the highest standards. And the second part involves helping people to understand and support the value of hydropower in the market as well as for our climate.