IT’S OFFICIAL: NRG pulling plug on repowering
Following years of highs and lows, repowering NRG’s Dunkirk power plant is a no-go.
Top elected officials were reportedly made aware Monday of NRG’s decision to back off from the plant’s conversion from coal to a cleaner alternative in natural gas. A call to NRG regarding the matter wasn’t returned. Local officials also haven’t responded to reports.
Concerns arose last month from NRG over the unanticipated cost of interconnecting the plant to the regional electrical power system and the schedule to get it done.
NRG says it was informed by the New York Independent System Operator, an organization responsible for operating the state’s bulk electric system, that the cost to re-interconnect the plant would cost in excess of $100 million. David Gaier, NRG spokesman, said in a interview with the OBSERVER last month that originally no interconnection costs were forecast.
NYISO’s President and Chief Executive Officer Brad Jones issued a letter roughly a week later. Jones in his statements noted that NRG made the business decision to keep the facility out of service to the point where their original interconnection rights expired. Jones went on to note that had NRG reactivated the facility within three years following the company’s decision to deactivate the plant, it would have been treated as a new facility and could have avoided the need for system upgrades.
In addition, Jones said NYISO estimated costs to interconnect the facility could be as low as $5 million or as high as $45 million.
Calls were also made to NYISO regarding the repowering. They also weren’t returned.
A little over six years have passed since NRG officials initially planned to mothball the facility. Meetings, rallies, a visit by Gov. Andrew Cuomo to announce the repowering and a lawsuit that halted it were some of the events that followed.
Budget impacts on the city, county and city school district will be minimal if not zero in the short term due in part to state funding secured by State Assemblyman Andy Goodell and state Sen. Cathy Young for a 10-year period to offset the property tax loss.
The long term is a different tale, however. State aid received by the school district, city and county goes down 10 percent each year. In 2017, the city school district received $2.7 million, the city obtained $1.7 million and the county retrieved $1 million.
A payment in lieu of tax arrangement was revised for the NRG repowering by the Chautauqua County Industrial Development Agency’s Board of Directors in March 2017. The agreement detailed an annual payment of $420,000 disbursed between the school district, city and county. The payment under the arrangement would go until the conversion project is complete or the school district’s 2022-23 fiscal year and the city and county’s 2023 fiscal year. Payments would ramp up as power generation units kick back in.
With NRG reportedly backing off from the project, the county could decide whether to continue or cancel the PILOT. If the arrangement was canceled, NRG would be forced to pay property taxes based on the current value of the plant.