The Federal Energy Regulatory Commission on May 27 approved a waiver for the Dunkirk Power LLC unit of NRG Energy (NYSE: NRG) related to a planned coal-to-gas conversion of the Dunkirk power plant in upstate New York.
On March 6, Dunkirk Power requested a waiver and an extension of time related to section 184.108.40.206 of Attachment S of the Open Access Transmission Tariff (OATT or Tariff) of the New York Independent System Operator (NYISO). Dunkirk wanted a waiver of the requirement that a facility be reactivated within three years in order to maintain its Capacity Resource Interconnection Service status and a twelve-month extension of the deadline to reactivate the facility.
The commission said in the May 27 approval order that it finds good cause to grant the requested waiver and one-year extension for Dunkirk’s Units 3 and 4.
Dunkirk’s facility consists of four coal-fired units located in Dunkirk, New York. In August 2012, Dunkirk deactivated Units 3 and 4, which are coal-burning units that are interconnected to the 230-kV transmission system of Niagara Mohawk Power d/b/a/National Grid in NYISO Zone A.
In December 2013, an agreement was reached between Dunkirk and Niagara Mohawk under which the Dunkirk Units 3 and 4 would be repowered as a part of a new natural gas-fired facility. Dunkirk Units 3 and 4, together with another Dunkirk coal unit that is not at issue in this proceeding, will form a nominal 435-MW natural gas facility. The target date for completing the reactivation is Sept. 1, 2015, only one day after the three-year Tariff deadline lapses. Thus, the need for the waiver. Dunkirk explained that the basic parameters of the new long-term agreement with Niagara Mohawk were only announced in December 2013, fifteen and a half months into the three-year window for reactivation, thus leaving only twenty and a half months to complete the reactivation within three years.
Dunkirk explained that, if waiver is not granted and it appears that the Aug. 31, 2015, deadline cannot be met for reactivating the Dunkirk Units 3 and 4 as natural gas facilities, it will need to begin efforts to reactivate the facilities temporarily as coal-burning facilities in order to retain its Capacity Resource Interconnection Service status. Dunkirk estimates that it may cost as much as $10m for the Dunkirk Units 3 and 4 to be temporarily reactivated as coal-fired units.
FERC on May 27 granted a one-year deadline extension, to Aug. 31, 2016. “Dunkirk’s request remedies a concrete problem since granting the waiver will avoid the undesirable consequences of Dunkirk either losing its existing interconnection rights or spending potentially as much as ten million dollars to temporarily reactivate the Dunkirk Units 3 and 4 as coal-fired units,” FERC ruled. “Granting this waiver will not harm third parties, since no generator in the existing interconnection queue is seeking to use the physical points of interconnection at the Dunkirk Units 3 and 4. Finally, we note that neither NYISO, nor any other entity, opposes this waiver and extension request.”