By GIB SNYDER
OBSERVER City Editor
The fate of three coal-fired electricity generating plants in Western New York, including NRG's Dunkirk Power LLC, will likely be determined shortly as the state's budget process winds up.
OBSERVER Photo by Matt Panebianco
State and local leaders are working hard to get the New York Power Authority to buy electricity. NYPA already buys electricity from coal-fired plants in New Jersey.
Sen. Cathy Young's introduction of legislation in the senate's budget requiring the New York Power Authority to purchase enough power from the plants to keep them open in the near term appears to be the best bet for the plant's long-term viability.
While some may balk at NYPA's purchase of this power, the authority not only generates its own power, it purchases power - and is working on a project that will allow if to purchase power from coal-fired plants - in New Jersey.
In April 2011, NYPA's board approved a binding agreement with the project developer, according to NYPA's chief operating officer Gil C. Quinones, who provided an Assembly hearing with the information the following month. The project calls for a private developer to build a seven-mile cable to bring the power from Ridgefield, N.J. to a Consolidated Edison substation in New York City. The route will take the cable under the Hudson River and is scheduled to be completed next year.
Quinones also said at the hearing NYPA will likely lose "tens of millions of dollars" with the losses possibly reaching "the lower hundreds of millions."
There is a loss the nation's electric grid is facing with the Environmental Protection Agency's implementation of pollution rules which will force the closing of coal-fired plants that did not do the environmental work on their facilities like Dunkirk NRG did with its over $200 million upgrade completed a few years ago. Those EPA rules take full effect in 2015 and will cause the closing of power plants in Pennsylvania and Ohio.
With the goal of Young's legislative initiative to gain some breathing room for NRG's Dunkirk and Huntley plants to stay open, along with AES Somerset, a three-year window would lead to 2015 and perhaps an opportunity for the WNY plants to sell their product to markets in neighboring states. The extension of adequate transmission lines to the New York City area, another proposal in the works, could also help in keeping NRG Dunkirk and the others open.
While the price of natural gas for that type of generation is low enough at present to make the coal-fired operators currently non-competitive, the concern is what will happen when the coal-fired generators that are not environmentally compliant come off the grid.
There are some who just want coal use ended, including Walter Simpson, leader of Clean Energy for Jamestown, a coalition of groups opposed to continued coal burning.
"We are facing a climate-change emergency and we need a statewide plan to phase out coal plants in an expeditious manner, not a short-sighted and wasteful scheme to financially prop up old coal plants whose time has finally come," said Walter Simpson, leader of Clean Energy for Jamestown, a coalition of groups opposed to continued coal-burning in Jamestown's power plant run by its Board of Public Utilities. "The plan should humanely address power plant employment and local taxation issues while quickly accelerating the deployment of clean energy resources."
Another south county resident sees the situation in a different light. Bill Daly is the Chautauqua County Director of Planning and Development.
"There's a precedent set for NYPA to buy power and the governor to be directly involved. I hope he's involved to make the right decision for the school district, the county and the city," Daly stated. "Wouldn't it be much better to buy from state-of-the-art coal generating plants in western New York and help support the highly skilled and paid workforce?
"NYPA will be paying to buy power coming off the New Jersey grid after paying to bring that cable across while we're losing jobs in western New York."
Daly noted NRG's two plants burn low sulfur coal and are fully compliant with all pollution laws.
As for that cable, Quinones told the hearing the cable should be in operation for at least 40 years and would eventually pay off by bringing the cost of electricity in New York City closer to the cost west of the Hudson.
"This line is going to be in place for 40 to 60 years," he said. "NYPA expects to more than fully recover our costs."
NRG is looking for some three years of help to keep its local plant viable. Local elected officials, including Daly's boss, Chautauqua County Executive Greg Edwards, have spearheaded an effort by area citizens to make sure Gov. Andrew Cuomo, Assembly Speaker Sheldon Silver and NYPA know of their interest in keeping NRG Dunkirk open.
According to Assmeblyman Andrew Goodell, the efforts are being noticed. Whether they will be enough to provide NRG some time to see what shakes out in this power story remains to be seen.
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