NYSEG Liberty Area
NWA RFP
A summer-peak deferral initiative for the Hilldale and Swan Lake substations serving ~4,000 customers in Sullivan County, NY.
1. Project Overview
NYSEG is soliciting Non-Wires Alternative (NWA) proposals to defer costly infrastructure upgrades at two substations — Hilldale and Swan Lake — located in the Liberty division of Sullivan County, New York. Both substations are identical in raw capacity: each comprises three single-phase 3.5 MVA transformers for a combined bank of 10.5 MVA per site.
The root cause of the constraint is highly specific and seasonal: the region experiences a dramatic surge in electrical demand on Friday evenings from the July 4th holiday through Labor Day. This is a classic summer-resort load profile driven by the Catskills vacation economy — homes, hotels, and rental properties filling up each weekend. Over the next decade, NYSEG's forecasts project this peak window to expand from a few hours on Friday evenings to potentially spanning entire days, from morning through late night.
This is an unusually narrow demand problem: the grid stress is real, but it only occurs roughly 10 weeks per year, concentrated on summer weekends. That's what makes a Non-Wires Alternative so sensible here — building a $35M substation upgrade to handle ~10 Friday nights per year is economically wasteful. A battery or demand response contract that can absorb that peak load is almost certainly cheaper for ratepayers.
Both the Hilldale and Swan Lake substations serve the Town of Fallsburg and Town of Liberty respectively, and the proposal allows bidders to respond to one or both sites, independently or through collaboration with other bidders.
2. Hilldale Substation — Technical Profile
Hilldale is located in the Hamlet of Hurleyville, Town of Fallsburg. Its transformer bank exceeded nameplate capacity every year from 2019 through 2023; emergency load transfers in 2024 and 2025 have provided temporary relief. However, loading is projected to breach the 90% threshold again by 2030 and exceed full nameplate capacity by 2031. All three transformers are currently rated in "very good" condition — asset failure risk is low. Notably, the existing circuit breaker has been flagged in "very poor" condition, though addressing that is outside the scope of this NWA RFP.
Utilities don't wait until a transformer hits 100% before acting — they target a safe ceiling of 90% of nameplate rating. Think of it like driving: you don't drive until the gas gauge hits empty. The "NWA need" numbers in the tables below represent the megawatts that need to be shaved off the peak to stay below that 90% ceiling. A bidder providing 1 MW of battery dispatch or demand curtailment during a summer Friday evening is directly satisfying this gap.
The traditional wires solution would upgrade the existing transformer to a new three-phase 22.4 MVA unit at 34.5/12.47 kV, add a circuit breaker, and build a second distribution circuit out of the substation. All nearby load transfer options have been exhausted and the transmission infrastructure cannot accommodate a larger transformer without this full rebuild.
The Hilldale circuit has two different wire gauges heading out from the substation. The northern mainline uses 1/0AL and 4/0AL conductors, which limits how much power a generator can inject before the wire gets overloaded (1.7 MW and 3.8 MW caps, respectively). The southern mainline uses larger 477AL wire (7.7 MW cap). In plain terms: if a BESS developer wants to site a battery on the north side, they're limited to ~1.7–3.8 MW unless NYSEG reconductors the line — which NYSEG says it will pay for, but it adds cost to the BCA. South-side siting is far less constrained. Bidders should note this in site selection.
Table 1 — Hilldale Forecasted NWA Need by Year
| Year | NWA Need (MVA) | NWA Need (MWh) | Peak Window |
|---|---|---|---|
| 2026 | 0.00 | 0.00 | — |
| 2027 | 0.00 | 0.00 | — |
| 2028 | 0.18 | 0.53 | Jul–Sep · 4–7 PM |
| 2029 | 1.04 | 3.81 | Jul–Sep · 3–8 PM |
| 2030 | 1.95 | 8.62 | Jul–Sep · 2–8 PM |
| 2031 | 2.92 | 15.2 | Jul–Sep · 11 AM–8 PM |
| 2032 | 3.95 | 23.9 | Jul–Sep · 10 AM–8 PM |
| 2033 | 5.06 | 35.2 | Jul–Sep · 8 AM–9 PM |
| 2034 | 6.24 | 47.9 | Jul–Sep · 8 AM–9 PM |
| 2035 | 6.68 | 52.7 | Jul–Sep · 8 AM–9 PM |
Notice how the 2028 need is tiny (0.18 MVA / 0.53 MWh) but by 2035 it grows to 6.68 MVA / 52.7 MWh. This is a classic "slow boil" demand growth curve amplified by EV adoption and solar queue dynamics. A bidder contracting today must size their solution for the 2035 peak, not the 2028 need — otherwise they'll be out-of-compliance mid-contract. This is also why the contract term is 10 years: NYSEG needs a vendor committed through the full demand ramp, not just the easy early years.
NYSEG has also disclosed that 2.18 MW of solar PV is currently operating on the Hilldale circuit, with an additional 10 MW in the interconnection queue. This existing generation is factored into load forecasts; bidders using solar as part of their solution must account for this to avoid double-counting.
Available Land: NYSEG owns a mostly-wooded 17.57-acre parcel adjacent to the Hilldale substation, available for sale or lease. Timeline to finalize is estimated at 5–9 months. Any land costs are included in the BCA.
3. Swan Lake Substation — Technical Profile
The Swan Lake Substation, located in the Town of Liberty, operates on a lower distribution voltage (4.8 kV) and feeds two separately voltage-regulated circuits. Unlike Hilldale, Swan Lake has been running above 90% capacity continuously since 2023, and its overload problem is already present — not a future projection. The bank is forecast to exceed full nameplate capacity by 2032.
Swan Lake operates at 4.8 kilovolts — an older, lower-voltage distribution standard. Modern systems run at 12.47 kV or higher because higher voltage means lower current for the same power, which means less heat and less loss. The traditional solution here isn't just a transformer swap — it involves converting two circuits to 12.47 kV via a new bus at the nearby Ferndale Substation. That's a substantially larger civil and electrical engineering effort, which is part of why the combined project cost is $35.6M.
NYSEG plans two load transfers to partially relieve Swan Lake — one in 2026 and one in 2029 — which create slight dips in the NWA need profile (visible in Table 2 below). However, these transfers alone are insufficient: the bank will still exceed 90% capacity after both. All circuit breakers and voltage regulators at Swan Lake are in excellent condition (recent replacements), minimizing unplanned outage risk during the deferral period.
For Hilldale, NYSEG can simply upgrade the transformer. For Swan Lake, upgrading the transformer alone won't solve the individual circuit loading — you'd also need to rework how the two circuits are fed. The preferred traditional solution runs through Ferndale Substation, which is a separate piece of grid infrastructure. This interdependency is why the NWA path is particularly compelling here: a BESS or demand response program can buy time while the utility works through what is genuinely a complex infrastructure redesign.
Table 2 — Swan Lake Forecasted NWA Need by Year
| Year | NWA Need (MVA) | NWA Need (MWh) | Peak Window |
|---|---|---|---|
| 2026 | 2.50 | 11.9 | Jul–Sep · 1–9 PM |
| 2027 | 2.93 | 15.8 | Jul–Sep · 10 AM–10 PM |
| 2028 | 3.37 | 20.2 | Jul–Sep · 10 AM–10 PM |
| 2029 | 1.64 | 6.61 | Jul–Sep · 3–9 PM (load transfer relief) |
| 2030 | 2.04 | 8.99 | Jul–Sep · 2–9 PM |
| 2031 | 2.47 | 11.7 | Jul–Sep · 1–9 PM |
| 2032 | 2.94 | 16.0 | Jul–Sep · 10 AM–10 PM |
| 2033 | 3.44 | 21.0 | Jul–Sep · 9 AM–10 PM |
| 2034 | 3.97 | 26.8 | Jul–Sep · 9 AM–11 PM |
| 2035 | 4.53 | 33.1 | Jul–Sep · 9 AM–11 PM |
Available Land: NYSEG owns a ~1.4-acre parcel north of Swan Lake substation, parallel to NYSEG Transmission Line 33. Available for sale or lease; estimated 5–9 months to finalize. Note that NYPA owns adjacent property to the northeast with a parallel transmission line — a factor for siting any interconnected generation.
Solar context: There is currently 2,052 kW solar on Circuit 1 and 13 kW on Circuit 2, already accounted for in the load forecast. All 3-phase mainlines outside the substation are 477AL conductor, providing a 3.8 MVA DER hosting capacity limit for locations within approximately 1–2 miles of the substation.
4. Eligible Resources & Scope of Work
NYSEG will consider any combination of the following resource types, provided they can demonstrably reduce peak loading at the relevant substation transformer bank below 90% of nameplate:
Battery Energy Storage Systems (BESS) that charge during off-peak hours and discharge during the summer evening peak window. Charging must occur outside peak periods. Bidders must address how charging costs are handled and whether additional NYISO value streams (e.g., frequency regulation) are monetized.
Voluntary reduction of electricity consumption by customers during peak periods, typically in exchange for bill credits or incentive payments. Works especially well in this load profile given its narrow, predictable peak window.
Solar PV, combined heat and power (CHP), or other on-site generation that directly reduces net load during peak periods. Clean power supply and fuel availability are explicit evaluation criteria for DG/CHP proposals.
Permanent load reduction through building upgrades, appliance replacement, or operational changes. Durable but typically slower to deploy; more commonly combined with storage or DR as a package.
A winning bidder is essentially being hired as a turnkey infrastructure developer. They must: (1) identify or secure a site within the relevant circuit geography, (2) navigate NYSEG's interconnection process (the SIR process — Standardized Interconnection Requirements), (3) obtain all environmental and operating permits, (4) build or procure the DER assets, (5) integrate with NYSEG's Flexible Interconnection software platform, (6) operate and maintain the assets for 10 years, and (7) demonstrate performance during every summer peak event. This is not just an equipment sale — it's a long-term service contract with performance obligations.
All resources must comply with NERC (North American Electric Reliability Corporation) cybersecurity and site security standards, NYISO interconnection requirements, and all applicable tariff provisions. The proposed solution must be compatible with NYSEG's Flexible Interconnection software platform, which is the utility's real-time dispatch and monitoring interface for distributed resources.
NERC is the federal body that sets reliability and cybersecurity standards for the bulk electric system in North America. For a BESS developer, this primarily means the physical site and control systems must meet security standards — fenced perimeter, cybersecurity protocols for the SCADA/control software, and incident reporting requirements. It's not onerous for a typical commercial storage project, but it does add compliance overhead that smaller developers need to budget for.
5. Project Economics & Benefit-Cost Analysis
NYSEG will evaluate each proposal through a Benefit-Cost Analysis (BCA) as mandated by the New York PSC. The key financial parameters are:
This is the most important financial concept in the entire RFP. The traditional project costs $35.6M to build. But the NWA bidder is not competing against $35.6M — they're competing against the deferral value of ~$15M. Why the difference? Because NYSEG isn't permanently avoiding the infrastructure upgrade; they're merely postponing it. The present value of delaying a $35.6M spend by 10 years (at a typical utility discount rate) works out to roughly $15M in net benefit. An NWA proposal must cost less than $15M to pass the BCA threshold. This is the financial ceiling that shapes every bidder's pricing strategy.
The BCA also considers societal costs — including avoided carbon emissions and reduced transmission line losses — which can increase the effective value of clean DER solutions relative to traditional wires projects. Proposals that provide ancillary grid services (such as NYISO frequency regulation) may incorporate those additional revenue streams, provided they are clearly documented and not speculative.
Bidders must submit a detailed pricing structure covering fixed availability payments (the annual capacity charge for keeping assets ready) and variable performance payments (triggered by actual dispatch during peak events). The utility and its ratepayers pay for results.
6. Disadvantaged Community Considerations
This RFP carries a notable equity dimension. Of the 2,430 customers served by the Hilldale distribution circuit, 100% are located within a designated Disadvantaged Community (DAC) under New York's Climate Leadership and Community Protection Act (CLCPA). Approximately 50% of the Swan Lake circuits' customers are in a DAC.
New York State's CLCPA requires that 35% of clean energy investments flow to disadvantaged communities — defined by criteria including income levels, environmental burden, and health outcomes. The DAC designation for Hilldale (100% of customers) means any winning NWA developer can credibly claim community benefit credits, which strengthens the BCA and may unlock additional state incentive programs. It also means bidders must explicitly describe in their proposal how their solution will benefit or not harm DAC residents — this is a scored evaluation criterion, not a checkbox.
7. RFP Procurement Schedule
Swan Lake's NWA need begins in 2026 — yet the target in-service date is 2028. The 2026–2028 gap will be bridged by the emergency load transfers NYSEG has already planned. This is common practice: utilities don't issue NWA RFPs at the last minute. The 2-year buffer accounts for site control, interconnection study (typically 12–18 months), permitting, and construction. Bidders who already have grid-connected sites or prior SIR approvals in the area have a meaningful competitive advantage.
8. Interconnection & Regulatory Standards
All DER assets must comply with New York's Standardized Interconnection Requirements (SIR) administered by NYSEG. This process includes a System Impact Study (SIS) to evaluate the effect of the proposed resource on grid voltage, protection settings, and power quality. Resources connecting at the distribution level must additionally comply with IEEE 1547 (the national standard for distributed energy resource interconnection) and NYSEG's Distribution Operations procedures.
The Standardized Interconnection Requirements (SIR) is New York State's framework for connecting any generator or storage system to the utility distribution grid. Think of it as the permitting process for plugging into the grid. It involves: (1) submitting an application with technical specs, (2) NYSEG running a power flow study to check that your system won't cause voltage swings or protection failures, (3) potentially requiring physical upgrades to the grid if your system stresses it. The process typically takes 6–18 months. For this RFP, the clock matters — a bidder who hasn't started their SIR application by contract award in late 2026 will struggle to hit the 2028 in-service target.
Resources above certain thresholds (typically >2 MW in NY) may also require NYISO interconnection study under the OATT Attachment S process — a federal-level review for resources that impact the bulk transmission system. Additionally, any storage resource that wishes to participate in NYISO wholesale markets (for frequency regulation or capacity) must complete NYISO's separate qualification process.
NYSEG requires all NWA resources to be compatible with its Flexible Interconnection software platform. This is the utility's real-time visibility and control system — essentially a dashboard where NYSEG can see how much power your battery is producing or your demand response is curtailing at any given moment, and can issue dispatch commands. For a BESS developer, this means the project's control system (SCADA) must support two-way communication with NYSEG's platform, likely via DNP3 or IEC 61850 protocol. This is a standard capability for modern grid-scale batteries, but it needs to be confirmed during the design phase and tested before commercial operation.
Technical Glossary
NWA — Non-Wires Alternative
Using distributed energy resources (batteries, solar, demand response) to defer or avoid building new poles, wires, and substations. The "alternative" to traditional capital construction.
MVA — Megavolt-Ampere
The measure of a transformer's capacity, accounting for both real power (MW) and reactive power. For practical purposes in this RFP, treat 1 MVA ≈ 1 MW of load relief needed.
BESS — Battery Energy Storage
A grid-scale battery system (lithium-ion is most common) that charges during low-demand periods and discharges to reduce grid load during peak hours. The most common NWA technology.
BCA — Benefit-Cost Analysis
NY's mandated financial test. An NWA project must score above 1.0 (benefits exceed costs). Benefits include deferred infrastructure cost, reduced carbon, and avoided line losses.
SIR — Standardized Interconnection Requirements
New York's process for connecting a generator or battery to the distribution grid. Includes a System Impact Study (power flow analysis) and can take 6–18 months to complete.
Demand Response (DR)
A program where large customers agree to voluntarily reduce their electricity use during peak events in exchange for payments. Highly effective for narrow, predictable summer peak windows like this one.
DSIP — Distributed System Implementation Plan
NY utilities must publish a roadmap for integrating distributed resources. This NWA RFP is a direct product of NYSEG's DSIP process.
REV — Reforming the Energy Vision
NY's 2015 utility reform framework directing utilities to become "Distributed System Platform Providers" — facilitating, rather than blocking, distributed energy. NWA procurement is a core REV mechanism.
DAC — Disadvantaged Community
Under NY's CLCPA, certain communities get priority for clean energy investment based on income, health burden, and environmental exposure. 100% of Hilldale customers qualify. Bidders must address DAC impact.
NYISO — NY Independent System Operator
The independent body that manages New York's bulk electricity grid and wholesale markets. Larger DER projects must interconnect through NYISO's process and comply with its tariffs.