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Biz Talk: Kenneth Daly is energized about power system's potential

Kenneth D. Daly looked across a construction site in West Seneca and pictured the scene four years from now.

That's when National Grid expects to throw the switch on a $118 million upgrade of its Gardenville power station. "That's how long it takes to do it right," Daly said in his Brooklyn accent. "That's how long it takes to build an asset of this size and scale."

Daly should know: He is National Grid's New York State president. He's also a believer in the value of long-term investments in power infrastructure for homeowners and businesses.

Daly, 50, oversees a vast and vital operation. The company's  New York State business serves 4 million electric and natural gas customers, and employs 8,000 people. Based on revenues, it accounts for 60 percent of National Grid's U.S. business.

He joined a National Grid predecessor in 1988 and has held his current job since 2011, reporting directly to National Grid's U.S. chief executive. Daly talked about the company's local upgrade, its role in economic development and how to bring more renewable energy into the mix.

Q: What is the significance of a station like Gardenville's to National Grid?

A: A site like this is really the backbone of the electric system. It feeds 17 (transmission) lines in this region and helps underpin about 35 percent of the power in this region.

Q: How do manufacturers capitalize on these upgrades?

A: It allows them, when they go back and compete in their markets, to have the assurance that the power company is making investments behind them. So as they bring in new jobs and new opportunities, we can continue to meet their needs from a growth standpoint.

Q: What consequences do homeowners and companies face if a power company doesn't make these improvements?

A: To be sure, for the foreseeable future, this site will continue to have very, very high reliability and will continue to meet the needs of our customers. But in order to do so, it would require more and more maintenance on our part, to keep the older assets going, and it would require more manual intervention.

The benefit now of a new system is threefold. One, it will last for another 80 years, and the old system would not. Secondly, it's much more economic for us to run the plant. We can flow the power through the plant more efficiently, it has more capacity so we can meet new growth without having to expand the plant. We can use the same spare parts here that we use in our other new sites. And (third), it requires less day-to-day maintenance.

Q: National  Grid is in the midst of a five-year, $3 billion modernization plan in upstate New York. Where does all the spending go?

A: It's a combination of replacing our assets, which have served us and our customers well for many years. Either the transmissions -- the big assets you see on our system -- or what we call substations, those central hubs, or in many cases the distribution lines that are going to customers' homes.

Q: What is energy demand like nowadays from residential customers?

A: We're seeing two different phenomena which are, in a healthy way, competing. One is, we are seeing in most homes, higher (energy) loads from new technology: the gadgets, phones, iPads, etc. The flip side, through some of our programs, we're seeing much higher utilization of energy-efficient products: thermostats, lighting, insulation.

Having said that, there's a huge opportunity for much more energy efficiency. If you look at our biggest customers, I think they've been very good at utilizing the energy efficiency tools that we offer. At a residential level, I think there's a significant opportunity for homeowners to lower their bills by using less power.

Q: How about bringing more renewable energy into the mix?

A: When you think of National Grid, we're certainly the local utility. We hope that our customers see us as the energy company. More and more, they should think of us as the clean energy company. We think that in basic terms, we bring the energy to life for our customers. Just in the last two years, we've now connected 10,000 renewable installations to our grid, primarily solar. So as our customers and communities are embracing renewable energy, we need to make sure that our grid has the ability to accept that clean energy on to the system.

The basic challenge is, as well as these [systems] were built a century ago , they basically contemplated one-way power flows. In the new era, with customers in many ways generating their own power, it's now a two-way highway. So we have to make sure that where customers are putting in -- usually it's solar -- any form of what we call distributed generation, that our local network can accommodate that. It requires us, quite often, to make an upgrade on our system, both for the safety but more so from a reliability and capacity standpoint.

Q: The Gardenville project will take four years to complete. What's the economic impact of the construction?

A: For the next four years, there's a specific job lift. A lot of the workers will be National Grid employees, so it sustains our own work force. But we are partnering with O'Connell [Electric], the construction firm. They'll bring in hundreds of workers over the next four years to get this project done.

But the real job engine now is, with a modern electric grid, Western New York can attract new manufacturers to the region. And there's no better place to bring a business now than where you have a modern electric grid, where you have stable power prices. That's where we're hoping you will see thousands of jobs in the future, for having a modern electric grid in place.



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