- By Dan Veaner
- Opinions
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As the Cayuga Power plant continued to lose over $100 million in value it surprised many local residents when a new buyer came forward, just before the PSC denied a plan to repower the plant with natural gas. Supporters of the plant, including Tompkins County Legislator Mike Sigler (Lansing) tried to remain optimistic, saying the new owners must have something in mind for its future, or they wouldn't have bought it, would they?
Wednesday's announcement that Cayuga Operating Company plans the second largest solar farm in the state may have answered that question. What value could a coal-powered plant have in today's market and an environment in which it is increasingly harder to gain support for fossil-fuel powered plants? Quite a lot, as it turns out.
"We closed on the aquisition of Cayuga a little over a year ago," said Beowulf Energy LLC Executive Vice president Nazar Kahn. "We had a vision to maintain Cayuga s a critical part of the state's energy grid. What we saw here was not just an old coal plant, but the opportunity to create something more. The grid is in a state of transition. We recognize that change, but we also recognize that sites like this are critical to maintaining that reliability. We have a 430 acre site here that's fully attached to the grid. So as we think about the full value chain of not just the generation of power, but also the transmssion and distribution of it, that transision should be happening on sites like this. Whether it's solar today, energy storage tomorrow, fuel cells in the future, whatever oother technology may come out five, ten, or twenty years from now, this is a place where that condition should occur. That's our real vision for the Cayuga Operating Company. It has been a critical part of the state's energy grid, it will be a critical part of the state's energy grid, and the solar project is the first step in that process."
Company officials are holding their plans for the existing plant close to the vest. A press release says they hope to create an energy park that will include repowering the existing coal-plant with natural gas. But even if it is inevitable that the plant will close, the benefits of buying it at close to an all-time low value became evident Wednesday.
Aside from subsidies and credits that would be available to any large solar farm, the Cayuga site offers unique advantages. Zoning and land use already favor a power plant, and a solar farm is a power plant, though a different kind. But it is not different in one way -- you need a hook-up to the grid, and this site has had one for years. It is on a property that the company already controls, and except for changing the source of the power, everything is largely the same. This company had a lot of experience providing power.
18 megawatts is only a fraction of the coal plant's capacity of just over 300 MW, but it's a start. Solar plants take considerably fewer people to operate, and don't have moving parts. Solar panels are known for operational reliability over decades with little maintenance. They don't have a byproduct that requires maintaining a landfill. Renewable Energy Credits make producing solar energy more economical.
One thing that is not widely understood is that the company owns about 434 acres in its north-western Lansing site, but the part that has been in the news for the pas half dozen or more years is only a small part of that lot. While the PILOT value that has been declining only applies to a portion, including the site of the coal-powered plant. The rest is valued as vacant land. Any time you build on vacant land the taxable value rises. That land would be more valuable if all you built were log cabins with no heat or electricity. A 75 acre solar farm is likely to bring that value up.
Will it be enough to make up for lost tax revenues from the plant's demise? Certainly not. But it's a start, and if the value of the land is truly its prime location that is already hooked into the power grid, we'll be seeing more renewable power generating development there in the future.
In hindsight it was never particularly smart municipal budget planning to rely on such a large portion of tax revenue from one source. Local governments should have been promoting new developments of various sorts more aggressively, and treating the power plant revenue, at least in part, as 'gravy' - not the meat of budget planning as past school boards apparently did.
The plant was a good neighbor for many years, and it should be remembered that when the PILOT was first negotiated the intention was that the negotiated taxable value would rise, not fall.
Tompkins County should, and says it wants to partner with the Town and Village of Lansing to do everything it its power to boost development, refilling that basket with smaller and varied eggs so the municipalities will never again face the financial threat to property owners that has emerged with the cracking of its single giant egg.
If this solar plant works out for the plant owners, it also works out for the Lansings. It wasn't the plant operators' fault that the market for coal-fueled electricity tanked as fast as it did. It's not like you can take an eraser to a coal plant and instantly draw a new renewable plant on the same piece of paper. If this all works out, it could be that the new owners were prescient when they purchased what looked like a doomed plant. Time will tell.
A downside is that eventually this kind of power generation will mean fewer local jobs if the existing power plant can't remain open. There will be a surge in construction jobs at first, but it takes far fewer people to maintain a solar plant than a coal, hydroelectric, natural gas, or nuclear powered plant. If the initial solar farm is successful, though, it may mean more construction and operating and maintenance jobs down the line. And there is a possibility that such a large solar farm could contribute to local tourism, as well as a near certainty that it will be used in conjunction with local schools for educational purposes.
What is almost guaranteed is that more tax revenue will come to the Lansings, the school district, and Tompkins County as a result of this building project. It won't likely make up for that $100 million in value any time soon, but its a start. With other new developments around the town, it may lead to a healthier revenue stream for Lansing's taxing authorities.
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