PSC agenda lists NRG repowering

The final approval of a plan to repower the NRG Energy Dunkirk plant from coal to natural gas may be at hand.

On Thursday, the state Public Service Commission will meet in Albany at 10:30 a.m. with just one item on its regular agenda under the power category. That would be item 301; 12-E-0577 Proceeding on Motion of the Commi-sion to Examine Repow-ering Alternatives to Util-ity Transmission Rein-forcements.

The process to repower the Dunkirk plant began with NRG’s announcement in March 2012 that it would mothball the facility. At that time the PSC and the New York Independent System Operator were tasked with conducting a reliability analysis to determine if any of Dunkirk’s units were needed for the reliability of the system. That process led to Dunkirk currently operating with just one of the two smaller of its four coal-fired generators.

After a long process that included a PSC public hearing at SUNY Fredonia in July that had record attendance and a Dec. 7 rally at the Boardwalk Market in Dunkirk, Gov. Andrew Cuomo came to the city Dec. 15 to announce that the repowering would be done and tasked the PSC staff with finding a way to make it work.

After reaching an agreement with NRG, on Feb. 13, National Grid filed a “Term Sheet” with the PSC to provide for the addition of natural gas capability and ensure the availability at the Dunkirk generating facility for 10 years and requested PSC’s approval. Grid’s proposal provided that the company pay NRG Dunkirk $20.41 million per year for 10 years, while Dunkirk would add approximately 435 megawatts of gas-fired capability from Units 2, 3, and 4 of the Dunkirk generating facility, with a Sept. 1, 2015 startup.

The PSC staff report issued May 16 detailed the staff’s reasoning in supporting the repowering of the Dunkirk facility, concluding; “In sum, there are significant potential benefits to the Dunkirk Proposal. Notwithstanding that many of these benefits can only be described qualitatively, the quantifiable benefits alone outweigh the costs. Accordingly, Staff recommends that the Commission approve the cost allocation and recovery associated with the Dunkirk Proposal.”

Area state Senator Cathy Young likely spoke for the rest of the supporters of the repowering when asked for a reaction to the PSC agenda.

“I am thrilled that our project finally will get considered. It is wonderful that the Department of Public Service staff determined that repowering NRG is positive for the ratepayers. It is encouraging that the Federal Energy Regulatory Commission (FERC) agreed,” Young replied. “We are hopeful that the Public Service Commissioners vote yes so that we can finally move ahead on this project that is vital to our future.”

While local officials and taxpayers would be happy with a repowering of the plant, not everyone else feels the same way.

The PSC has received numerous filings on the issue from the Sierra Club and Earthjustice, on behalf of the Ratepayer and Community Intervenors, Citizens Campaign for the Environment, and Environmental Advocates of New York.

“The record demonstrates that the Agreement is not just and reasonable for ratepayers, as proposed transmission reinforcements present a lower cost and more effective option for addressing the reliability impacts that would result from the retirement of the uneconomic Dunkirk plant. As such, the proposed Agreement should be rejected or, at a minimum, an adjudicatory hearing presided over by an administrative law judge should be held so that the rate, environmental, and other costs and benefits of the Agreement can be adequately scrutinized and measured,” a May 27 filing stated in part.

“The Staff Report also attempts to justify the Agreement as consistent with state law that declares the development of “clean energy generation” to be “in the public interest.” But with no enforceable limitation on the refueled facility’s ability to burn coal, the Agreement clearly fails to provide one of the most basic claimed benefits – improving the environment and protecting public health. Under no circumstance should the Commission approve a repowering proposal that allows the Dunkirk plant to continue burning coal or, at a minimum, fails to enforceably limit such coal burning to situations where it is required as an emergency backup fuel due to the unavailability of natural gas.”

Proposed draft orders for Regular Agenda items or discussion items will be posted for public viewing, if feasible, by 5 p.m. the day before a Commission meeting. The draft orders will be made available at: www.dps.ny.gov/DraftDocuments.html.

The posted drafts will be removed by 5 p.m. on the day of the Commission meeting. The proposed order is not the final Commission action, rather, the final determination is the issued order, posted by the Secretary, and available at www.dps.ny.gov, click on “Search” then search the appropriate PSC case number.

In addition, the meeting will be broadcast live on the Internet. The Internet broadcast can be viewed by accessing www.dps.ny.gov/Webcasts.html.

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