Sterling Energy explains RPS request for its New York power plant

Sterling Energy Group filed on Dec. 6 additional arguments at the New York State Public Service Commission on why its formerly coal-fired power plant should be counted as a Renewable Portfolio Standard-compliant facility.

Sterling recently purchased all of the ownership interests in Niagara Generation LLC (NiGen) from USRG Finance Co. LLC (USRG) in order to repair, improve and restart a 51-MW circulating fluidized bed (CFB) generating facility owned by NiGen. The company has said it wants the plant to mostly fire biomass in the future, with a little coal mixed in for reliability reasons.

Sterling explained that the New York State Energy Research and Development Authority (NYSERDA) awarded USRG and NiGen a contract under the commission’s Renewable Portfolio Standard (RPS) program in 2005 due t a conversion to firing biomass instead of coal, but that USRG had been unable to successfully operate the facility due to the low level of payments provided under that contract, as well as the difficulties USRG encountered in operating the facility. As a result, USRG retired the facility earlier this year, creating an event of default under the USRG RPS Agreement.

In a petition dated Nov. 14, Sterling requested a ruling from the commission finding and declaring that termination of the USRG RPS Agreement by NYSERDA will not bar Sterling and NiGen from bidding the facility into any future Main Tier RPS solicitation for which it is otherwise qualified, except with respect to the actual MWH of renewable energy attributes provided to and paid for by NYSERDA prior to the termination of the USRG RPS Agreement.

In the Dec. 6 supplement to that petition, Sterling responded to the request of Department of Public Service (DPS) staff for a clear explanation of the “rule” that Sterling is requesting the commission to interpret or apply.

In a 2004 order, the commission adopted a policy goal of obtaining at least 25% of the electricity used in New York State from renewable resources by 2013. To achieve that policy goal, the commission also adopted a Renewable Portfolio Standard.

Among other rules prescribed in the RPS order, the commission established requirements: that only renewable generation facilities that commenced operation after Jan. 1, 2003, would be eligible for RPS incentives outside of the Maintenance Tier; that existing coal-fired facilities converted to co-fire coal and qualifying biomass fuels would be eligible for RPS incentives for the portion of their energy output derived from qualifying biomass fuels; that RPS incentives would be provided through a central procurement model administered by NYSERDA; and that RPS incentives would only be available for energy from qualifying renewable resources delivered into the New York State Transmission System on a monthly matching basis. None of these rules have been modified by the Commission in any rulemaking since the issuance of the 2004 RPS order, Sterling noted.

Sterling seeks a ruling from the commission that the rules adopted in the RPS order and any subsequent rulemakings relating to the commission’s Renewable Portfolio Standard do not preclude Sterling and NiGen from bidding the facility into a future RPS solicitation conducted by NYSERDA for which it would otherwise be eligible under the certification requirements in effect at that time.

Sterling said its facility was converted to co-fire qualifying biomass after Jan. 1, 2003, seeks RPS incentives only for the portion of its energy output powered by qualifying biomass, and is willing both to participate in the central procurement process administered by NYSERDA and to deliver its output into the New York State Transmission System as required by the commission’s Renewable Portfolio Standard.

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.