NRG points to power problems due to Dunkirk coal capacity loss

NRG Energy (NYSE: NRG) on Aug. 16 told the New York State Public Service Commission that the mothballing of its coal-fired Dunkirk power plant caused problems during the recent summer heat wave that hit the region.

NRG, in a docket covering the potential retirement of both the Dunkirk and Cayuga coal plants, on Aug. 16 filed with the PSC supplemental information presented by the New York Independent System Operator (NYISO) to one of its stakeholder groups on Aug. 15.

“The report from the New York Independent System Operator noted that during the July 15-19, 2013 heat wave, the mothballing of 445 megawatts at Dunkirk ‘significantly changed power flows’ and ‘resulted in significant constraints and congestion.’ We believe this information is relevant to the overall benefits associated with the Dunkirk Repowering that is being evaluated in this proceeding and should be included in the comparative assessment among the alternatives under consideration,” NRG said.

Due to a push for clean energy in New York, retaining Dunkirk as a coal plant is basically out of the question. NRG is pushing for a repowering of the plant with natural gas for the future, while other parties want to go with only transmission upgrades to support better power flows to make up for the lost capacity from a shut Dunkirk plant.

Said the Aug. 15 NYISO presentation about Dunkirk: “The Dunkirk generating unit mothballing of 445 MW has significantly changed power flows on the Western NY 230 kV system. This has resulted in significant transmission constraints and congestion. These Western NY 230 kV system constraints have reduced operational flexibility of the Niagara Power Project and the NYISO’s ability to rely on neighboring control area (IESO) to provide assistance during high load conditions.”

Dunkirk now 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, when operating, have used low-sulfur Powder River Basin coal.

NRG on June 5 filed with the New York PSC supplemental comments supporting the repower plan. NRG’s offered options are:

  • Option 1—a new 422 MW combined-cycle gas turbine (CCGT) and refueling the existing 75-MW Dunkirk Unit 2 with natural gas.
  • Option 2—the refueling of the existing Dunkirk Units 2, 3 and 4 with natural gas.
  • Option 3—installation of 285 MW of natural gas-fired peaking units.

National Grid: cheapest option for its ratepayers is transmission upgrades

Niagara Mohawk Power d/b/a National Grid on Aug. 16 also filed comments with the PSC regarding repowering the coal-fired generation at Dunkirk with natural gas. “National Grid is not opposed to repowering—rather, National Grid is opposed to the bill impacts its customers would see if the costs of repowering were forced completely upon them,” said National Grid. “The Company’s May 17, 2013 Report and Recommendations Comparing Repowering of Dunkirk LLC and Transmission System Reinforcements (‘May 17 Report’) found that the repowering options would cost National Grid customers three to seven times more per year than the transmission solutions. This would mean National Grid customers paying $1.74 billion more under Repowering Option 1 over 20 years than they would pay for the Transmission Upgrades. National Grid cannot support requiring its customers to pay so much more to address a reliability need that can be resolved much more cheaply with transmission.”

Although the transmission upgrades are the most economic solution to the reliability issue, National Grid said it recognizes that addressing grid reliability is not the only consideration. Some commenters—including most speakers at a July 15 public hearing in Fredonia—advocated for repowering Dunkirk on public policy grounds, National Grid noted.

“Policy makers certainly could find that public policy considerations warrant repowering Dunkirk,” the wires company said. “However, if repowering Dunkirk is pursued on the basis of broad public policy objectives, it is only fair that the costs of that public policy initiative also be allocated broadly. It would be fundamentally unfair for National Grid’s Upstate New York electric customers to be forced to pay all the costs of an initiative adopted to serve broader public policy goals, particularly when a much more cost-effective solution is available to protect the reliability of service for National Grid customers. Therefore, if repowering is adopted, the costs should be allocated broadly across the state.”

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.