Dunkirk Power LLC told FERC on Aug. 21 that there has been a delay in nailing down final approval of the reliability must-run (RMR) agreement that will keep coal-fired capacity at the Dunkirk plant going beyond a previously-planned shutdown time.
Dunkirk Power, part of NRG Energy (NYSE: NRG), asked FERC to postpone indefinitely the date for commission action on FERC Electric Rate Schedule No. 1, which is applicable to the provision of RMR service from Dunkirk Units 1 and 2 to Niagara Mohawk Power Corp. d/b/a National Grid. Dunkirk and National Grid had entered into a bilateral agreement covering reliability services from the two Dunkirk units and a FERC application was filed on that basis. On Aug. 1, Dunkirk requested that the commission hold this proceeding in abeyance until Aug. 25 to provide the New York State Public Service Commission time to review the term sheet of the agreement and allow the costs incurred due to the settlement to be passed through to National Grid’s retail customers. As a result, the commission established Aug. 22 as the deadline for comments.
Now, to alleviate pressure for interested parties to comment by Aug. 22 and to provide time for execution of a final contract and any NYSPSC order to become final, Dunkirk wants FERC to extend indefinitely the date for commission action. Dunkirk said it renews its request for a Sept. 11 effective date for Rate Schedule 1.
Dunkirk owns and operates a coal-fired generating station in Dunkirk, N.Y., made up of four units. The units have a nameplate capacity of roughly 100 MW for Unit 1, 100 MW for Unit 2, 218 MW for Unit 3 and 218 MW for Unit 4.
On March 14, Dunkirk submitted a notification to the New York commission that it plans to mothball all units at the Dunkirk station and cease providing service effective Sept. 10, 2012. National Grid conducted reliability studies on the planned deactivation of Dunkirk Units 1-4, and concluded that the RMR units (Units 1-2) were needed to maintain the reliability of the local transmission system beyond the planned shutdown date and until at least June 1, 2015. At all times when National Grid only needs a single RMR unit, Dunkirk has the right to select between Unit 1 and Unit 2.
The aging coal plants in New York are something of an endangered species. For example, Cayuga Operating Co. LLC filed a July 20 notice with the New York commission that it intends to mothball its Cayuga plant in Lansing, N.Y., which is comprised of two coal-fired units, by Jan. 16, 2013. Unit 1 has a net capacity of 154 MW and Unit 2 159 MW. Unit 1 was placed in service in 1955 and Unit 2 was placed in service in 1958 and both have been supplying energy, capacity and ancillary services in New York.
“The current and forecasted wholesale electric prices in New York are inadequate for the Cayuga Facility to operate economically and, therefore, Cayuga Operating Company intends to place the Cayuga Facility in protective lay-up to limit the costs that are incurred at the facility,” said the notice filed at the New York commission. “Cayuga Operating Company intends to take all steps within its control to avoid permanently retiring the facility by continuing to explore any and all alternatives with its suppliers and other parties, including reductions in its variable and fixed costs.”