By GIB SNYDER
OBSERVER City Editor
The future of NRG Dunkirk Power LLC is a source of concern for many in Northern Chautauqua County. The scheduled Sept. 11 mothballing of the two largest generators, which make up 70 percent of the plant's available output, is the outcome of a process which started in March when NRG filed a mothball notice with the state's Public Service Commission.
David Gaier, manager, Communications Northeast Region for NRG, explained what's happened so far.
"On August 16 the New York Public Service Commission approved a binding term sheet between NRG and National Grid for two of Dunkirk's units, the 100 megawatt units, to run from Sept. 1 through May 31, 2013. On Aug. 27, NRG and National Grid executed a bilateral contract for those two units and filed it with the Public Service Commission," Gaier stated. "A National Grid filing earlier, on July 20, noted the reliability need for two Dunkirk units lasting through May. The filing also identified an additional need for one of the Dunkirk units or an equivalent that would be required through May of 2015. This means that National Grid has noted a reliability need for two additional years beyond the contract. In the August 16th order, the Public Service Commission directed National Grid to consult with the Department of Public Service to propose a schedule and process to solicit for alternative solutions for any remaining reliability needs beyond May 31.
"We expect to find out before the end of this year if any of the Dunkirk units are needed beyond May of 2013, and Grid needs to let us know that by January 1, 2013. If Grid notifies us before that date, the agreement can be extended 90 days. As we've previously announced, we'll start mothballing our remaining Units, 3 and 4, on September 11 and we'll do this using NRG employees."
There will be an affect on employees at the plant.
In July, Lee Davis, NRG Northeast region president, said there would be a reduction of 63 employees in Dunkirk.
"In terms of headcount reductions, we're working with IBEW Local 97 to establish release dates for employees who are taking part in a voluntary separation program. A number of employees have opted to voluntarily separate and we're working with Local 97 to establish a date for those separations," Gaier explained. "We have no layoffs in the works at this time. The second thing we're doing is reassigning a number of employees to the Huntley Plant who are currently working in Dunkirk, also further reducing the numbers at Dunkirk.
"It's our intention to avoid layoffs if at all possible. Beyond the steps we're taking - voluntary separations and reassignments back to Huntley - NRG will provide as many opportunities as possible for any other affected Dunkirk employees to work elsewhere within NRG."
Gaier said the company's plan to convert to natural gas-fired generation instead of coal-fired is still on the table.
"We're still optimistic about it. We're not sure when the Energy Highway Task Force is going to announce its choices," he said. "We still believe it's a very solid and positive proposal."
Ted Skerpon is the President and Business Manager of IBEW Local 97. He was asked if he had any comment on the employees in Dunkirk and how they will be affected.
"It is unfortunate that the process did not conclude with the need to keep more of the generators operational," Skerpon relied. "While employees will either retire or hopefully be reassigned, they are proud of the contribution that the power plant and their employment makes to the region, and are profoundly disappointed with the conclusion of the agreement."
Skerpon was asked if cooperation between the union and the company has been productive, other than the loss of jobs.
"We have worked closely with NRG to minimize impacts on employees and are optimistic that the unfortunate workforce reductions can be met through voluntary retirements and/or reassignments," was the reply.
The union president was asked if enough skilled labor was available if the plant should have to ramp up to full production.
"There is no guarantee that once the folks who operate the 230 KV side of the plant walk out the door, that there will be an ability to replace them quickly, and I emphasize quickly, because there could be an emergency need to ramp up," he stated. "Several times this past summer, the units to be mothballed were called upon to run by the New York Independent Systems Operators (NYISO) due to demand and reliability, meaning the lights would likely have gone out in the extreme demand on hot days without them. We are concerned and confused that it seems like a risky conclusion was not questioned by the New York State Public Service Commission.
"It will take several months to return these units from mothballed status - if at all. They are designed to run and most reliable when they do. Long-term storage is not healthy for their mechanical lifespan. If there is an immediate need next summer to draw power from these units - say in a hot day in July, they might be waiting until January to restore them from their mothballed state, if they can be powered up at all. If mothballing the units theoretically saves ratepayers pennies a month, how wise is that investment in the face of potential blackouts? The risk/reward is just not there," Skerpon said.
Along with everyone else, the IBEW is waiting for results from the Energy Highway Task Force.
"We understand the conversion plan was well received, but the Governor's Energy Task Force has been silent through their process. We are hopeful for conclusions to their process by early fall," Skerpon explained.
State Sen. Catharine Young and area Assemblyman Andrew Goodell have been leading local efforts in Albany to keep NRG Dunkirk viable. Goodell was asked about the mothballing plan.
"During the summer, it's my understanding, that the electric turbines were actually needed to meet power needs. If that is the case then clearly you want to make sure they're available as part of the system reliability," he replied.
Goodell was asked the status of proposed transmission line upgrades to get power from Western New York to New York City - a project that would benefit the Dunkirk plant.
"It's all part of the Energy Highway initiative, so there's multiple transmission issues that are involved. National Grid is talking about transmission upgrades that will enable them to bypass the NRG plant and still have enough capacity to meet reliability needs," he replied. "We think the more efficient long-term proposal is the upgrade at the NRG plant. The second transmission issue is the system wide that enables power from Western New York to be sold downstate. There's a consortium of upstate companies that put a proposal to the Energy Highway that would address and solve those transmission issues. That's what we support, with NRG, to strengthen the market."
Goodell added he is opposed to the proposal to build a powerline from Quebec to New York City.
"If that proposal were to go through New York City residents would be sending about $1 billion a year to Canada. We think the state's economy will be stronger throughout the state if that money is used to purchase power from upstate. That's part of what we're working on as well," he said. "From the state's perspective the advantage is the state strengthens its own energy infrastructure and solves some of the bottlenecks that would strengthen the upstate Western New York economy, instead of sending money to Canada. We're getting power from western New York in addition to strengthening the economy."
Goodell was asked about the status of NRG's natural gas conversion plan.
"They're supposed to announce in the next couple months and Senator Young and I, and the mayor of course, have been urging the governor's staff, along with the governor, to put this project at the top," he replied. "It would have a strong environmental impact."
The PSC documents covering the NRG Dunkirk - National Grid dealing are available at:
documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?MatterSeq=39463.
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