The New York State Public Service Commission told the Federal Energy Regulatory Commission on Dec. 28 that an effort by an NRG Energy (NYSE: NRG) subsidiary to win FERC approval for a reliability deal for the coal-fired Huntley power plant should be rejected.
On Dec. 7, Huntley Power LLC submitted to FERC a revised, unexecuted cost-of-service (COS) agreement for reliability must run (RMR) service. The Dec. 7 filing presents a revised version of an Oct. 15 filing.
Huntley is a wholly-owned subsidiary of NRG Energy that owns and operates the Huntley generating facility in Western New York. NRG notified the NYPSC on Aug. 25, 2015, that the facility would cease operations and be retired on March 1, 2016. NRG explained that Huntley cannot be operated economically under current market conditions in New York, and the facility is not expected to regain profitability in the future.
New York State Department of Public Service Staff subsequently asked the New York Independent System Operator (NYISO) and Niagara Mohawk Power d/b/a National Grid to conduct a coordinated assessment of the potential reliability impacts of the retirement on local and bulk system reliability.
On Oct. 15, Huntley filed the Initial RMR Proposal with the federal commission. In that filing, Huntley asserted its expectation that the NYISO and National Grid reliability study would find that the facility would be needed for system reliability beyond March 1, 2016. The basis for this assertion was a finding embedded in an outdated system reliability study that National Grid conducted in 2011.
Huntley explained that, based on the assumption that Units 67 and 68 would be needed for transmission system reliability, it developed a COS rate and a draft, unexecuted RMR Agreement to be discussed with the NYISO and National Grid.
But since then, the NYISO and National Grid each reported that there would be no system reliability impacts from shutting Huntley. Here, Huntley is seeking out-of-market compensation to continue operating beyond the proposed March 1, 2016 retirement date based on its assumption that the Facility would be needed for transmission system reliability,” said the New York PSC. “As detailed above, Huntley may retire the Facility as proposed on March 1, 2016 without implicating any local or bulk transmission system reliability issue. The NYISO confirmed that the bulk transmission system can be maintained within all applicable reliability criteria upon Huntley retirement when the relay setting modifications are implemented, whether or not Dunkirk is available.”
Dunirk is another New York coal plant that NRG plans to shut.
The PSC added: “National Grid similarly concluded that the non-bulk transmission system can be maintained within all applicable reliability criteria upon Huntley retirement when the relay setting modifications are implemented. National Grid asserted that the relay setting modifications will be completed by December 31, 2015. The conclusion that the Facility will not be needed beyond the proposed retirement date holds regardless of whether any Dunkirk unit is operating, and regardless of whether the capacitor banks are installed by June 1, 2016.”
NRG Energy said in its Nov. 4 Form 10-Q quarterly report that it has taken impairment losses related to plans it recently communicated to the New York PSC to shut the coal-fired Huntley and Dunkirk plants.
Huntley Units 67 and 68 are coal-fired units, with 218 MW of nameplate capacity apiece, that began operating in 1957 and 1958, respectively. The units are located in Tonawanda, N.Y., and are interconnected to the National Grid system in NYISO’s Zone A.
NRG’s Dunkirk Power LLC owns and operates a coal-fired station in Dunkirk, New York, made up of a (nameplate) 100-MW Unit 1, a 100-MW Unit 2, a 217.6-MW Unit 3, and a 217.6-MW Unit 4.