Gaps in electrical distribution create disruptions for construction of new housing projects
Across the area, sponsors of large-scale economic development and housing projects are discovering their projected power needs far exceed what the local utilities can currently provide. Gaps in electrical distribution have disrupted construction of new housing projects in North Buffalo, New York. Mark Fuller, CEO of DePaul Developmental Services, found out that there wasn't enough electricity flowing through the neighborhood to support the new Pan-American Square Apartments. The solution involved National Grid running an extra 23-kilovolt power distribution line into the site to deliver the electricity from elsewhere. The power upgrade will cost DePaul more than $5 million in additional costs, on top of the $30 million construction project. This is not the first time the power supply has been disrupted, as developers find out after their plans have already been approved. The problem is partly due to an older electrical system and shift away from coal-fired and gas-fired power generation, reflecting the size and electrical demands of modern development projects.
公開済み : 3週間前 沿って Jonathan D. Epstein の Business Environment
Mark Fuller was floored when he learned of a big problem for the 150-unit affordable apartment project in North Buffalo he’d been working on for seven years.
And Fuller, the CEO of DePaul Developmental Services, was even more surprised when he learned that the problem was that there wasn’t enough electricity flowing through the neighborhood between Delaware and Colvin avenues to support those new Pan-American Square Apartments.
After all, it wasn’t like the 11-acre complex was in the middle of nowhere. It’s right along the heavily commercial stretch of Delaware, with Delta Sonic, Delaware Consumer Square and Applebee’s across the street. It’s adjacent to the Buffalo Municipal Housing Authority’s Holling Homes. And it’s surrounded by residential neighborhoods.
But there wasn’t enough electrical capacity in that immediate area to power the three four-story buildings that are under construction.
It took six months of study and planning to come up with a solution. National Grid will be running an extra 23-kilovolt power distribution line into the site to deliver the needed electricity from elsewhere.
And it isn’t cheap: The power upgrade will cost DePaul more than $5 million in additional costs, on top of the $30 million construction project.
“Who would have thought there was not enough power on Delaware Avenue?” Fuller said.
DePaul’s experience is not unique. Across the area, sponsors of large-scale economic development and housing projects are discovering their projected power needs far exceed what the local utilities can currently provide, even in highly developed urban areas where electricity is already available.
But they’re only finding out after their plans have already been approved, and often after work has already begun.
“By the time you buy the land and start construction, you’ve got the pylons in, do you stop it?” Fuller said, noting his agency’s project is 64% complete. “I was halfway through the swamps, I may as well keep wading.”
The problem is partly about the electric capacity in the overall power grid, but also about where and how that power is distributed. It’s a reflection of an older electrical system and the shift away from coal-fired and gas-fired power generation, but also the size and electrical demands of modern development projects, both commercial and residential.
“It’s an extremely serious challenge for developments, especially in the more Rust Belt neighborhoods or cities in general,” said Dennis Elsenbeck, a former National Grid executive who heads up an energy-consulting group at the Phillips Lytle law firm. “The system is aged, and it’s near capacity. If you look at Rust Belt neighborhoods, how much do you think utilities upgraded electrical systems in areas that aren’t growing? They don’t.”
While the solutions can vary from project to project, they all entail significant investments in new equipment and power lines to increase the flow of electricity to meet the demand. But because they’re being installed for a particular project, rather than overall community needs, the developers are the ones who have to pay for it.
“What developers are now discovering is there is a lack of capacity locally,” Elsenbeck said. “And then the utility will tell them it’s up to them, because they’re the only ones requesting additional feeder capacity, to foot the bill of running the feeder solution to meet that new demand.”
City officials estimate the total bill for all of these projects exceeds $30 million so far, with DePaul’s among the highest. And it’s not just hitting the private-sector or nonprofit projects, but even the Buffalo Municipal Housing Authority and its affiliate Bridges Development, which have started the Commodore Perry Homes redevelopment.
“A lot of this is coming after the fact, after they’ve closed on financing,” said Brendan Mehaffy, executive director of the city’s Office of Strategic Planning. “So then all of a sudden, it’s like go find more.”
And the problem may only worsen with the state’s push toward full electrification of buildings and rising demand from electric vehicles. The winter demand for electricity statewide will roughly double by 2040, according to a study released this month by the New York Independent System Operator, which manages the state’s power grid.
For now, the electricity supply isn’t the problem.
“It’s not that we can’t find the capacity. It’s whether our infrastructure and the capacity that we need to bring to them is near where they’re locating,” said Kenneth Kujawa, National Grid’s regional executive director for Energy Solution Delivery for Western New York.
“In some cases, it works out perfect. Our facilities are right there and we can service them, based on what they need,” he said. “In other instances, we’ve got to extend a higher-voltage line to your facility in order to meet your power requirements.”
As with DePaul, it was a big shock for McGuire Development Co. and Utah-based Blackfish Investments when officials learned they would have to spend $1.7 million extra for the Rails on Main project.
That’s a 312-unit market-rate housing development at 2929 Main St., on a former industrial property that was most recently used for steel-plating for several decades. It’s across the street from Hertel Avenue, and next to the Bethune Lofts.
Blackfish, which had started the $44 million project in 2018 before it stalled, originally understood that there was adequate power available from overhead lines, and that’s what McGuire thought when it joined the project in June 2022. But when the developers submitted work orders to National Grid to start the electrical work, they learned it would be significantly more complicated.
“They couldn’t draw that much power from overhead, so we had no option,” said Eric Ekman, vice president of development and acquisitions for McGuire. “We had to go underground.”
National Grid said it would have to run a pair of 23-kilovolt power lines from a half-mile away to provide enough power. And not only would McGuire and Blackfish pay for it, but they had to scale back their plans for more electric-vehicle charging stations.
“The cost was astronomical,” Ekman said. “And we’re bearing the full brunt.”
The commercial and industrial sectors are also impacted. The Buffalo Urban Development Corp., which owns and manages the Northland Corridor light-industrial hub, wants to recruit advanced manufacturing to the East Side campus.
But first it has to upgrade the electrical substation that came with its purchase of the former Houdaille Industries facility at 683 Northland, because today’s companies use far more power than Houdaille did.
“Everybody’s trying to be understanding of, as projects come on board, how do we electrify them,” said Rebecca Gandour, the agency’s executive vice president. “I think we could have gotten away with two cables, but working with National Grid, we had to put three cables in.”
Part of the problem stems from a disconnect between energy policy goals and economic development and housing needs.
Pressure is mounting from environmentalists and policymakers to shift toward even more electrification, especially in states like New York, where the 2019 Climate Act requires the state to cut greenhouse gas emissions 40% from 1990 levels by 2030 and at least 85% by 2050. That, in turn, led to the Climate Action Council’s recommendations, and last year’s All-Electric Buildings Act, which goes into effect in 2026.
That state law will require that most new buildings of less than seven stories in height use electric heat and appliances, not gas or coal, unless they are commercial or industrial buildings of at least 100,000 square feet. However, the law will take effect for all buildings in 2029, with some exceptions.
In the meantime, developers are trying to understand the impact, and some are getting a head-start. That’s why there are already all-electric or mostly electric construction projects coming online, especially for housing. And the electric power demand in those buildings is 35% to 40% higher than a traditional building that uses gas, Elsenbeck said.
Then there’s the economic development side of attracting new business. About 90% of the production in the semiconductor, battery and other green energy industries still relies on natural gas, said Thomas Kucharski, CEO of Invest Buffalo Niagara, the region’s economic development organization. As that shifts to electricity, it will put even more pressure on the system.
There’s also the growth of high-energy technology fields like crypto-currency and artificial intelligence – including the proposed new artificial intelligence center at Tesla Inc. in South Buffalo.
But the power network isn’t necessarily ready for that. As utilities sort out what the changes will mean for them, regulators are pushing them to invest heavily in power production and distribution to meet the Climate Act goals. That includes integration of new solar and wind power projects, most of which are on “greenfield” sites where land is available – not in the middle of cities where the power is needed.
“We have to make sure that the grid is capable of being able to move that electricity around, because the way that the grid operates today is different than when it was originally envisioned,” Kujawa said.
Over the past two months, National Grid has announced more than $5.8 billion in investments in its electrical network. That includes its $4 billion Upstate Upgrade initiative to rebuild over 1,000 miles of transmission circuit and 45 substations.
And as part of its new rate filing last month, it committed to another $1.8 billion in electric infrastructure upgrades for transmission, distribution and substation work. All that work is a big reason why National Grid rate filing would increase the average residential customer’s monthly bill by 15%.
However, it still doesn’t mean there’s enough power at a particular site where someone wants to build.
“The electric distribution system simply is not ready. It does not have the capacity to go from a fossil-based economy to an electric-based economy,” Elsenbeck said.
So far, Mehaffy said, developers have been able to come up with the extra money they need, including from the state for affordable housing. But he’s worried.
“Buffalo has hit its stride with a lot of really important development projects,” he said. “Now many of those projects are being hit with an unexpected cost. So this is yet another significant complexity that we have for development.”
That’s why Mehaffy, along with Elsenbeck and Kujawa, are urging developers and companies with building projects to contact their electric utility early in the process, so that officials can evaluate the power needs and determine if they can be met – or if costly upgrades will be needed. Such capacity studies – to determine if the existing feeder is adequate – can cost as much as $60,000.
“Each case is going to be unique,” Kujawa said. “The utility companies are going to have to be brought into the process a lot more sooner.”
トピック: Environment-ESG