Dunkirk Power LLC on March 6 went to the Federal Energy Regulatory Commission for a needed waiver related to its plan for a coal-to-gas switch of the fuels at its Dunkirk power plant in New York.
Dunkirk, which is a unit of NRG Energy (NYSE: NRG), wants a 12-month extension to retain its existing interconnection rights for Dunkirk Units 3 and 4 as it reactivates those two units with gas as the new fuel. “Granting these two requests will provide Dunkirk assurance that its existing interconnection rights can be retained as it reactivates (and brings natural gas to) the Dunkirk facility as a nominal 435 MW natural gas facility (hereinafter referred to as the ‘Dunkirk Gas Project’) under a long-term contract (the ‘Dunkirk National Grid Agreement’) with Niagara Mohawk Power Corporation d/b/a National Grid (‘National Grid’),” the application said.
A waiver would allow Dunkirk to complete the reactivation process without risk of losing its existing interconnection rights (or spending as much as $10m to reactivate on coal just to retain its existing interconnection rights). This concrete issue needs commission resolution by July 2, the company added.
The Dunkirk facility has existing interconnection rights at the 115 kV (Units 1 and 2) and 230 kV (Units 3 and 4) transmission system of National Grid in NYISO Zone A. Dunkirk Unit 3 and Unit 4 were deactivated in August 2012. Under the applicable tariff, Dunkirk Units 3 and 4 must reactivate by Aug. 31, 2015 – three years from the date of deactivation of Units 3 and 4 – or lose their existing interconnection rights and reenter the interconnection process.
By July 2, if the commission does not grant the waiver and extension, then Dunkirk will need to, in order to ensure that its interconnection rights will be retained, either (1) determine that it will be able to complete the reactivation of its facility as a natural gas facility by Aug. 31, 2015, or (2) if it determines that reactivation cannot be complete by Aug. 31, 2015, begin efforts to reactivate the facility as a coal burning facility (the existing fuel) by Aug. 31, 2015, but at a cost of as much as $10m.
The company noted that reactivation efforts could not begin until a new long-term arrangement was negotiated with National Grid. The basic parameters of that arrangement were only announced on Dec. 15, 2013.
Dunkirk Unit 1 was deactivated on May 31, 2013. Unit 1 will not be part of the Dunkirk Gas Project and thus its interconnection rights are not part of this request. Dunkirk Unit 2 remains in operation under a Reliability Support Services Agreement (RSSA) with National Grid which continues until May 31, 2015, after which the unit will add natural gas burning capabilities to continue operations along with Unit 3 and 4 pursuant to the Dunkirk National Grid Agreement. Because Unit 2 continues to operate, it does not need a waiver to retain its interconnection rights as part of the Dunkirk Gas Project.