Niagara Mohawk Power will seek proposals for distributed generation (DG) projects to be in service in 2004 and 2005. Platts Retail Energy reports the utility will release requests for proposals in July of this year and in January 2003. The initiative is part of a plan by the New York Public Service Commission to test DG for relieving distribution congestion. In 2001, the PSC ordered a pilot program, noting that DG can reduce the need for distribution system upgrades by providing power near growing loads instead of running more wires to them. The practice reduces costs by helping utilities avoid distribution upgrades, and minimizes the environmental impact of running more lines or building substations, the PSC noted. It ordered utilities to assess their distribution needs for 2004-2005, and issue solicitations for DG. NiMo, a National Grid subsidiary based in Syracuse, N.Y., is the first utility to move to the solicitation phase, a PSC spokesman said.

Joseph Hipius, NiMo's DG program manager, said the company has identified four areas on its distribution system that could benefit from DG. In two of the spots, 5 to 6 Mw will be required, while the others will need about 20 Mw.

He said DG developers may qualify by delivering power to end-users, thereby relieving demand on the utility grid, or ''they can find a piece of property along our distribution system and connect with us,'' to sell the power to NiMo. In both cases, the utility will make market-based payments, reflecting the amount of power that NiMo receives or avoids delivering.