The head of the New York Senate Energy and Telecommunications Committee said Sept. 26 that the state needs to take some new directions to fix the problems of aging power generation and transmission systems.
The committee held a Sept. 25 public hearing where it heard from witnesses about how aging infrastructure, state environmental policies and proposals to import foreign power are endangering jobs, threatening the tax base of local communities and undermining grid reliability.
“We are at a cross roads in terms of our energy generation and transmission future, and it is critical that we choose the right path,” said Sen. George Maziarz, committee chairman. “We must adopt policies that incentivize older plants to repower and at the same time update our transmission infrastructure so that power rich areas upstate can supply power to consumers downstate. New York is fortunate to have the resources to be the master of its own energy future. We don’t need an extension cord from Canada what we need instead is an investment in New York jobs and support for our local communities.”
The committee heard from witnesses representing coal plants in Dunkirk and Somerset; Gavin Donohue, the CEO of Independent Power Producers of New York; Dan Engert, Supervisor of the Town of Somerset; Ken Pokalsky representing the Business Council of New York State; Tom Rumsey and Rick Gonzalez from the New York ISO; and Phil Wilcox and Michael Lutz representing the International Brotherhood of Electrical Workers (IBEW). Senators also heard from Paul Haering, who represents NYTRANSCO, a coalition of public and private utility companies who have proposed a multi-billion dollar investment in the state’s transmission infrastructure, and Donald Jessome, representing Transmission Developers Inc.
Maziarz laid out his own plan aimed at building a sustainable and lasting energy generation and transmission system that includes:
- Support for NYTRANSCO with its focus on in-state transmission and jobs and opposition to by-passing upstate generation and jobs through the “risky importation” called the Champlain-Hudson Power Express.
- Supporting generation jobs through allowing power plants to access Excelsior Jobs credits.
- Creating a “Clean Fuel Repowering Tax Credit” to allow any power plant that is willing to meet the stringent environmental standards established in the 2011 Power New York Act, to take at least a 12.5% as right tax credit on necessary improvements.
- Creating a “NY Clean Energy Innovation Fund” that will be paid for through the sale of NYPA peaker plants in New York City. This is expected to produce $300m-$700m and will be used to assist plants with repowering and communities with diminishing tax bases due to retiring plants.
- Allowing repowering projects that meet strict environmental standards to access low-interest debt financing though the state of New York.
- Leveling the playing field for all power producers by examining and analyzing the full gamut of environmental regulations and exemptions and their practical application including applying RGGI charges to any power imported from outside the state or country.
- Allow plants to commit to repowering, utilizing cleaner burning fuel technologies or adding elements of renewable energy to “bank” RGGI credits to assist in paying for these upgrades.
There are lots of endangered coal plants to repower
Much of the repowering help would be aimed at coal-fired power plants. Bankrupt AES Eastern Energy LP, for example, is currently pursuing a bankruptcy court approval to sell four coal plants – two of them permanently shut years ago and two of them now being permanently shut – to a company that would scrap them. The plants are Hickling, Jennison, Westover and Greenidge.
Another example is that NRG Energy (NYSE: NRG) plans to repower the coal-fired Dunkirk power plant with natural gas. NRG made that pitch to the New York Power Authority (NYPA) in recent project proposals lodged under the New York Energy Highway Task Force Project.
NRG said it plans to build, own, and operate the Dunkirk Gas Turbines, a new, natural gas combined cycle gas turbine (CCGT) power plant located in the New York ISO Zone A. “NRG proposes to convert its Dunkirk coal facility to a combined cycle unit with generating capacity between 450 and 600 MW,” the proposal said. “The site can accommodate either a one-on-one or a two-on-one CCGT unit, with final design dictated by customer needs. NRG will build gas infrastructure to its existing Dunkirk coal units to enable them to co-fire with both coal and natural gas. Concurrently with this build-out, NRG will construct the combined cycle facility, which will ultimately use the pre-built gas infrastructure and take the place of the existing coal units once it is commissioned for commercial operations.”
NRG is also offering under the Energy Highway program to build natural gas infrastructure to its existing Huntley plant in Tonawanda, N.Y., to provide it with dual fuel and co-firing capabilities. The existing Huntley plant has two coal units with a total nominal rating of 380 MW net. NRG pointed out many of the same benefits for the Huntley project as it did for the Dunkirk repowering.