National Grid plans to pour $1.6 billion over three years in infrastructure upgrades across upstate New York, its Chief Executive Officer Steve Holliday announced Tuesday.
About $500 million of that will be spent on improvements at the western end of the state.
"The vast majority of that is going to modernizing and replacing old assets totally," such as towers, cables, substations and switch gear, he said during a speech to the Buffalo Niagara Partnership.
The U.K.-based National Grid will align its spending strategy with where new businesses are going, Holliday said. "Where would you put your bucks for the biggest bang right now? Where is reliability and resilience and quality most important, and let's make sure we hit off those places first and foremost."
The British transmission giant became a local household name after acquiring Niagara Mohawk in 2002 for $8.9 billion. Today, National Grid has about 3.4 million electricity customers in the Northeast, and an equal number of natural gas customers.
Holliday described the three-year, $1.6 billion spending plan in the former NiMo territory as "the right rate going into the future, actually. We're not sort of massively going to turn the system from old to new overnight, but it's the right rate of replacement of assets to maintain the reliability that we've been delivering."
National Grid's U.S. operations were formed through acquiring five companies, the largest of which was Niagara Mohawk, representing 26 percent of National Grid's U.S. assets.
Holliday said energy has become a prominent topic tied into everything from climate change and sustainability, to affordability and reliability.
Holliday touched on some other topics:
-- On the debate over whether to convert an NRG power plant in Dunkirk from coal to natural gas, he said National Grid's role was to analyze the situation, not to decide the plant's future. "It looks when you do a fundamental piece of analysis that ... the cheapest answer for customers is a transmission investment and bringing power into the area. But ... there are other decisions that are made and considerations that go into making those decisions."
-- The London-based Holliday visits Buffalo once a year. "The great privilege of coming to a place once a year is you can really see whether things are changing for the worse or for the better. I am very pleased to give you my scorecard that today that things are definitely changing for the better, in my opinion. Upstate New York is changing for the better, as well, which is hugely important for our business."
-- The United States is the "envy of Europe," because of the size of deposits, propensity and cost to extract shale gas, he said.
Holliday was the first speaker in a new Partnership series that will feature top-level executives of companies with operations in Western New York whose headquarters are elsewhere. Other speakers in the series are yet to be announced, said Dottie Gallagher-Cohen, the Partnership's president and chief executive officer.
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