- By Dan Veaner
- News
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The battle that will determine the fate of Lansing's Cayuga Power Plant continued this week as NYSEG and Cayuga Operating Company (COC) filed opposing arguments with the New york State Public Service Commission (PSC). The arguments boiled down to the cost to ratepayers, with NYSEG saying the most economical solution is to update its transmission lines, while COC says repowering the plant will result in savings to ratepayers. Additionally, the fallout from the pending closing of two power plants near Buffalo may be a factor in whether or not the PSC approves the repowering plan. But both New York Independent System Operator, Inc. and National Grid NY told the PSC this week that they would not be able to provide their analysis by the September 24 deadline PSC had requested.NYSEG submitted a new letter last Friday arguing again that the Cayuga Power Plant should be closed. NYSEG argued against plant owner assertions that Phase 2 of a plan to upgrade the Auburn power transmission lines is unnecessary. To simplify the arguments, Power Plant officials claim that savings from a Reliability Support Services Agreement" during the construction phase of the plant repowering project would save ratepayers money, while NYSEG claims that ratepayers will pay more if the plant is repowered.
An attorney for the Power Plant wrote in a September 18 letter, "RSSA payments for the period July 2017 through at least April 2018. RSS savings during this period would total almost $30 million, assuming the payments remained substantially similar to those in RSSA2." They asserted that savings realized between July 2017 through at least April 2018 would total $30 million. According to a revised estimate by power plant officials, the quantified benefits of repowering would be $175 million. If you subtract the cost of $102 million in NYSEG payments to repower the plant, the net benefit would be $73 million in savings to ratepayers.
But NYSEG's attorneys argued that it is highly unlikely the repowering project could be completed on that timeline, asserting that delays would bring up costs. The NYSEG letter also said that the upcoming sale of the plant would further delay any upgrades.
Cayuga Operating Company (COC) is in the process negotiating its purchase by Riesling Power LLC. COC owns the 300 megawatt Cayuga Power Plant in Lansing and a 675 megawatt coal-fired power plant in Somerset, NY. As of a month ago the deal had received COC board and shareholder approval. It must receive regulatory approval before it can be finalized.
In a new letter posted Wednesday John McManus of Harris Beach, PLLC, an attorney for COC, refuted NYSEG claims, saying that the issue of Phase 2 has yet to be determined, and noting that an independent study the company submitted showed that Phase 2 of the transmission lines upgrade is not necessary. He further argued that the pending sale is a separate issue from the repowering plan, and will have no bearing on it.
"Finally, NYSEG engages in pure speculation in its criticism of Cayuga’s projected in- service date for a repowered Facility," McManus argues. "Specifically, NYSEG states that it is “highly unrealistic” that Cayuga could complete the necessary infrastructure improvements to begin natural gas-fired generation by June 2017. NYSEG provides no support for this contention. NYSEG also notes that Upstate New York Power Producers, Inc., Cayuga’s upstream owner, recently filed a joint petition under Section 70 of the Public Service Law seeking Commission authorization to transfer 100% of its interests in Cayuga and another subsidiary to Riesling Power LLC. From this ministerial filing, NYSEG speculates that 'such a sale and the resulting transfer of ownership can reasonably be expected to delay and negatively impact the ability of Cayuga to repower the Facility.' Again, NYSEG provides no support for this contention. Regardless, the possible transfer of ownership should have no bearing on the Commission’s decisions concerning the Cayuga Facility and the ATP."
In December 2013 the New York State Public Service Commission (PSC) approved a $140 million plan to repower NRG Energy's 592 MW coal burning power plant to a combination of coal and natural gas. But at the end of August the company announced that it would be shuttering the plant indefinitely, as well as closing down it's 380mw Huntley coal-burning power plant. Both plants are near Buffalo, NY. The closings could have a significant impact on the future of the Cayuga Power Plant here in Lansing, and local officials are particularly frustrated by the silence from Albany.
On August 28th the PSC charged New York Independent System Operator, Inc. and National Grid NY with providing a new reliability impact study by September 24. The request came in response to news that NRG Energy will be shuttering its 380mw Huntley coal-burning power plant and shuttering its Dunkirk plant for the foreseeable future. Last year the Dunkirk plant was given the PSC's blessing to embark on a $140 million project that would convert the plant from coal-only to both coal and natural gas.
Both New York Independent System Operator, Inc. and National Grid responded on the 24th that they would need more time for a coordinated review, and promised a response by October 30th. New york Independent System Operator Executive Vice President Richard Dewey also said the PSC staff would be kept up to date as key findings become available.
"This coordinated analysis will include consideration and evaluation of operating procedures and modifications to system configurations. The NYISO will also assess the resource adequacy of the overall system with the Huntley and Dunkirk units removed for the ensuing five years," Dewey wrote.
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