New York coal plants headed for the dust bin of history

The Sierra Club can see something of an historic end in sight – the end of coal-fired power plants located in the state of New York.

In a Dec. 11 statement, the club celebrated the fact that Dynegy (NYSE: DYN) announced on Dec. 10 that its bankrupt affiliates would sell the Danskammer coal-fired capacity to ICS NY Holdings, which has plans to demolish the currently-shut facility.

“This is great news for families in New York who can now breathe easier without more pollution from the Danskammer coal plant. Now it’s up to ICS NY Holdings to ensure a responsible transition for the workers and community, including working with the union for a fair deal and conducting a safe and healthy clean-up of the site,” said Bruce Nilles, Senior Campaign Director for the Sierra Club’s Beyond Coal Campaign.

The Danskammer plant had various problems, including a recent lawsuit over regional haze pollution filed by Earthjustice on behalf of the Sierra Club and National Parks Conservation Association, the release of modeling showing how the plant contributed to violations of federal air quality standards for SO2, workers on strike and recent flooding damage from Superstorm Sandy, the club noted.

“This helps bring New York energy generation into the 21st century,” said Charles McPhedran, an attorney with Earthjustice. “Air pollution from aging coal plants makes people sick. This closure helps clear the air, and will open the door to cleaner energy for New York’s future.”

Following this Dynegy announcement there are only four remaining coal plants operating in New York – Somerset, Huntley and Dunkirk in Western New York and Cayuga near Ithaca, the club pointed out. Both Somerset and Cayuga have been in bankruptcy, it added.

“This should be a signal that it’s time to move New York beyond coal and plan for a cleaner energy future. Investing instead in renewable energy like wind and solar will mean healthier air, good jobs and reducing our dependence on dirty energy that causes climate disruption and extreme weather events like the devastating Superstorm Sandy,” said Lisa Dix, Senior New York Campaign Representative for the Sierra Club.

“We are witnessing the beginning of the end of New York’s reliance on coal. It also means that the citizens in New York and beyond will breathe cleaner air and the energy we use will generate less carbon pollution,” said Peggy Duxbury, an adviser at Bloomberg Philanthropies which has contributed $50m to the Sierra Club’s Beyond Coal campaign. The Bloomberg in that name is Michael Bloomberg, the billionaire mayor of New York City.

Coal-fired plants shut, about to be shut, or re-fueled

The club’s boasting about the end of coal-fired power in New York has a strong basis in fact. For example, a federal bankruptcy judge on Oct. 11 issued an order approving the sale by AES Eastern Energy LP of four shut coal-fired power plants, basically for scrap. Those plants are Hickling, Jennison, Westover and Greenidge.

In December 2011, facing significant constraints on liquidity, AES Eastern and related companies commenced Chapter 11 cases, which were later combined into one case, at the U.S. Bankruptcy Court for the District of Delaware. Since then, AES Eastern has sold its two operating coal-fired plants – Somerset and Cayuga – in New York. On Oct. 11, Judge Kevin Carey signed an order approving the sale of Jennison, Hickling, Greenidge and Westover to demolition expert GMMM Holdings Corp.

Cayuga Operating Co. filed a notice in July with the New York Public Service Commission saying that it intends to mothball two Cayuga coal units, located in Lansing, N.Y., by Jan. 16, 2013. It has since then been working through unit shutdown issues related to regional transmission reliability.

On June 29, the New York PSC approved the sale of Somerset and Cayuga to the bondholders of AES Eastern for about $240m. The AES bondholders have formed a new company, Upstate New York Power Producers, to take ownership and maintain operations at the Cayuga and Somerset plants. That company filed a proposal earlier this year with the state under its Energy Highway program, which is a process of identifying New York’s future power supplies and needed transmission infrastructure.

The bondholder plan for Cayuga and Somerset is in contrast to a plan offered by NRG Energy (NYSE: NRG) to the New York Power Authority for adding new natural gas-fired capability at the Dunkirk and Huntley coal plants, potentially backing out future coal use at both of those plants.

Somerset is a 675-MW pulverized coal-fired plant located in Barker, N.Y., on the southern shore of Lake Ontario, and began commercial operations in 1984. Cayuga is a 306-MW pulverized coal-fired plant located in Lansing, N.Y., on the eastern shore of Cayuga Lake. The facility has two operating units: Unit 1 was commissioned in 1955 and is comprised of a 150-MW steam turbine. Unit 2 was commissioned in 1958 and has a 156-MW steam turbine generator.

NRG plans to repower the coal-fired Dunkirk power plant with natural gas, NRG told the New York Power Authority in project proposals under the Energy Highway 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.”

Dunkirk currently consists of four units with a total nameplate rating of 635 MW net. Units 1 and 2 are identical 100 MW units that began commercial operation in 1950. Units 3 and 4 are identical 218 MW units that went into commercial operation in 1959 and 1960, respectively. All Dunkirk units use low-sulfur Powder River Basin coal.

NRG also offered to build natural gas infrastructure to its existing Huntley plant in Tonawanda, N.Y., to provide it with dual fuel and co-firing capabilities. Modifying Huntley as a dual fuel unit would be a cost-effective way to diversify the Western New York generating portfolio and support the reliability of the regional electrical system, NRG noted. The existing Huntley plant has been continually modernized and comprises 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. NRG said it can achieve the Huntley project by summer 2013.

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. On March 14, Dunkirk Power 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.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.