Danskammer wins New York PSC approval; battles Entergy at FERC

Danskammer Energy LLC, which is reviving a power plant in New York state that has been shut since late 2012, told the Federal Energy Regulatory Commission on June 30 that Entergy Nuclear Power Marketing LLC (ENPM) has no valid complaints in a matter pending before FERC.

On June 2, Danskammer Energy filed a petition asking that its proposed market-based rate tariff be accepted for filing with a July 10 effective date. ENPM filed a motion to intervene and comments on June 23.

“ENPM’s comments are immaterial and beyond the scope of this proceeding,” Danskammer Energy wrote. “The Petition neither seeks approval of the transfer of the Danskammer Generating Facility and related interconnection (the ‘Facility’), nor a jurisdictional determination of the nature of the Facility. Instead, the Petition seeks a grant of market-based rate authorization for Danskammer Energy under section 205 of the [Federal Power Act]. As noted in the Petition, following approval by the New York Public Service Commission (‘NYPSC’), which was granted on June 27, 2014, Danskammer Energy will have the right to operate and, ultimately, own the controlling interest in the Facility for purposes of re-starting the generating station.”

The company added: “As has been set out in the Petition, the Facility is non-operational and includes a non-operational station having a capacity rating of approximately 537 MW (nameplate), located in the New York Independent System Operator, Inc. (‘NYISO’) Lower Hudson Valley capacity zone, which was damaged in Superstorm Sandy, in October 2012.”

Danskammer Energy said that ENPM has no real interest in this market-based rate authorization proceeding except as a competitor. “As noted to the NYPSC in response to challenges filed by Entergy regarding the NYPSC Application, the specific interest of certain Entergy entities like ENPM is to reduce competition in the new NYISO capacity zone for the Lower Hudson Valley,” it said. “ENPM’s comments regarding Danskammer Energy’s request for market-market rate authority is nothing more than an attempt to delay and confuse the process, with the ultimate objective being to prevent operation of the Facility.”

Noted the June 27 New York PSC transfer approval order: “In a petition filed on April 1, 2014, [Helios Power Capital LLC] and a partner it has engaged, Mercuria Energy America, Inc. (Mercuria), opt to pursue the resumption of operations at the Danskammer facility instead of retiring it. They ask for the approval of transactions whereby Helios will transfer its interests in the Danskammer facility to Danskammer Energy LLC (DEL) (together with Helios and Mercuria, the Petitioners). Mercuria will then acquire a majority of the ownership interests in DEL. Following those transactions, DEL, as majority-owned and indirectly managed by Mercuria, will seek to return the Danskammer facility to operation.”

Coal is falling off the table even as a back-up fuel option

All four generation units at the Danskammer facility are capable of using natural gas, and that fuel will be used at all times when available. During periods of high demand, however, gas supplies into the Danskammer facility may be constrained. So the companies originally planned that at those times, Units 1 and 2 will run on fuel oil as a back-up fuel, while the back-up fuel for Units 3 and 4 is coal. To comply with certain requirements, the facility would run less than 900 hours per year when fueled with coal.

In a supplemental filing dated May 19, the owning companies reported to the New York commission that they have selected Consolidated Asset Management Services LLC (CAMS) as the operator of the Danskammer facility. CAMS has extensive experience in operating generation facilities, having furnished operational management services to approximately 30 power plant projects in North America, and is also experienced in all aspects of generation facility development, construction, engineering, and maintenance, and in information technology.

The power plant owners also believe that constraints on Central Hudson Gas and Electric’s gas delivery system can be surmounted, and that, because gas transportation service upstream from Central Hudson’s system is not constrained, making arrangements for that capability should be feasible as well. They believe it will be unnecessary to use coal as a back-up fuel at Units 3 and 4, and they state they have no intention of doing so. In another supplemental filing dated May 27, they pointed out that if Units 3 and 4 can be fueled entirely with gas, the 900 hour annual run-time limitation will be mooted because coal would no longer be used as a fuel.

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.