Years of ups, downs lead to new low point
Dunkirk’s roller-coaster regarding the future of NRG Energy Inc. has been more herky-jerky over the past six years than a carnival ride. For residents, as well as county, city and school leaders, it also has been downright exhausting.
Consider the timeline of events on this nail-biting whirl:
¯ March 2012 — NRG officials announce they have plans to mothball the facility.
Horrible anxiety as the journey begins.
¯ July 2013 — A Public Service Commission hearing at the Williams Center on the State University of New York at Fredonia is standing-room only, with more than 2,000 in attendance.
We’ve reached the peak with confidence and uncertainty.
¯ Dec-ember 2013 — State Gov. Andrew Cuomo comes to Dunkirk to announce a repowering with 500 in attendance at the Clarion Hotel Marina and Conference Center on a Sunday morning.
Arms and cheers as we head downward.
¯ August 2015 — A lawsuit by Entergy Entities Corp. names the state and the Dunkirk plant. Repowering is put on hold.
Tremendous angst as we round tight corners.
¯ Earlier this spring — With suit settled in 2016, there’s word NRG officials are checking on city plant and preparing to make conversion from coal to natural gas.
Great exhilaration and screams as we near the finish.
¯ Wednesday — An unexpected cost of $114 million for transmission and no plant operation until 2024, according to NRG officials.
Is this the end of the ride? This latest information is definitely a bombshell.
Ironically, local elected leaders had been upbeat about the plant in recent days, including at the Common Council meeting. Word on the street was all NRG needed was permits before moving forward with the conversion of the plant from coal to natural gas.
Apparently, it is much more complicated and costly. Earlier this week, Theodore Skerpon, president of the International Brotherhood and Electrical Workers union Local 97, warned in a letter to the OBSERVER about the “bizarre transmission upgrade costs” being factored into the project. That’s the $114 million from the Independent System Operator — or the ISO.
“While the original project did not have any interconnection costs, NRG has continued to press on even when it became apparent they could be as much as $15 million,” Skerpon writes in the letter in our commentary section. “The disparity between these two solutions is huge both in terms of cost — $114 million far exceeds the cost of the overall project, timing, and certainty. This is the difference between the project proceeding and the project being killed.”
That appears to be bad news on two fronts. First — and most obvious — is the payment in lieu of taxes agreement. Before the plant was shut down, NRG paid more than $8 million to the three government entities of the city of Dunkirk, its school and Chautauqua County. With the plant not operating, NRG’s payment is now a total of $420,000 to all three.
Skerpon also noted one more negative. During the Memorial Day heat wave, Western New York residents are paying four times more than the rest of the state for the delivery of power due to the Huntley in Tonawanda and Dunkirk plants being out of operation. Our cost is $155 per megawatt while other regions paid between $30 and $40 per MW.
“While these episodes of price spikes can come and go with the weather, under the current configuration, a long hot summer will translate into significant increases in (Western state region) power costs,” he said.
Skerpon’s point: our county is paying one way or another — and in both cases it is going to be excessive. Cuomo realized this in 2016 when he came to Dunkirk to announce the Athenex project. With the NRG project in question then, the north county needed something to be energized about.
While we can be confident that the dirt is being moved at the Athenex site, the future is not as bright for our behemoth power plant. Thanks to the enormous fees from the ISO, it may be lights out.
John D’Agostino is the OBSERVER publisher. Send comments to email@example.com or call 366-3000, ext. 401.