NYSEG Requests New Eight Month Repowering Extension

Mar282014
cpp_powerlines120People on both sides of the Cayuga Power Plant repowering controversy expected a final decision next week on whether the plant would be repowered with natural gas or closed.  Cayuga Operating Company LLC (COC) and NYSEG are reaching the deadline to come up with a mutually agreeable plan for delivering reliable power to the region after being granted three extensions.  But a new request for an extension was filed Monday by an attorney for NYSEG (New York State Electric & Gas). 

"Cayuga and NYSEG continue to work diligently in an attempt to develop a mutually-agreeable revised proposal, but to date, have been unable to do so," wrote attorney Jeffrey A. Rosenbloom. "NYSEG and Cayuga are willing to continue discussions to explore whether a mutually agreeable proposal can be reached. Accordingly, to avoid the need for filing further extension requests, Cayuga and NYSEG respectfully request that the Commission extend the deadline for filing a joint proposal or separate recommendations until December 1, 2014."

COC attorney John T. McManus filed a letter with the PSC the same day.  In it they supported the NYSEG request and assured PSC officials that an extension to December 1st will not delay the plant's ability to complete its repowering project by January 2017.

"As set forth in NYSEG’s correspondence of today, Cayuga supports NYSEG’s request that the Commission extend the deadline for filing a joint proposal or separate recommendations until December 1, 2014, and consents to it being considered a joint request by the parties," he wrote.  "Ultimately, a more-considered revised repowering proposal or recommendations will promote the orderly and efficient conduct of this Proceeding and provide for more thorough Commission review."

Originally NYSEG opposed repowering the plant, favoring a plan to upgrade the power delivery grid to more reliably serve Auburn and its largest power user, NUCOR Steel.  COC argued for keeping its plant open by repowering the coal plant with natural gas.  To date the Public Service Commission had granted three extensions, the most recent giving NYSEG and COC until March 31st to devise a mutually agreeable plan.  Plant officials said they had been working with NYSEG to develop a proposal they could both agree to, and was reviewing the term sheet between National Grid and Dunkirk Power LLC to see if anything in that filing could be used to arrive at a final filing here.

Even if the plant is forced to close, it will remain open for at least three more years.  In January it was announced that the PSC had extended COC's Reliability Support Services Agreement (RSSA) until June 30, 2017.

Meanwhile activists on both sides have rallied.  In February Tompkins County Legislator Mike Sigler initiated a petition to show support for repowering the plant.  The petition is being distributed door to door, at local events, and a copy is available for signing at the Lansing Town Hall.  In addition a Web-based version of the petition has garnered 510 signatures as of this writing with many signatories leaving comments in favor of repowering.

Sierra Club attorney Joshua Berman and EarthJustice attorney Christopher Amato filed a joint letter opposing a new extension.  They argued that NYSEG and COC's inability to come up with an agreement by now illustrates the futility that they will ever be able to do so.

"Continued delay of the transmission upgrades risks saddling ratepayers with even more unnecessary RSS subsidies for avoidable continued operation of the Cayuga plant and needlessly risks further delaying the necessary transmission upgrades," they wrote. "Each month of delay in completing transmission upgrades equates to approximately $4 million in out-of-market subsidies to the Cayuga plant when capital expenditures are include. These costs are borne entirely by ratepayers."

Rosenbloom says the companies have been working diligently to craft a proposal and an eight month extension will avoid a steady trickle of extension requests.  He said that if the decision is made to close the plant, NYSEG's transmission upgrade project may not be impacted by the further delay.

"Delay in deciding whether repowering is in the public interest will not necessarily jeopardize NYSEG’s ability to implement a transmission solution," he wrote.  "NYSEG continues to pursue a transmission solution in the event repowering is found not to be in the public interest. In the Auburn Transmission Project proceeding (Case 13-T-0235), NYSEG informed Department of Public Service Staff that a Certificate of Environmental Compatibility and Public Need for Phase 1 and Phase 2 of the Project (“Certificate”) needs to be granted in July 2014 to enable NYSEG to meet the Project in-service dates. Assuming that the Certificate is granted in a timely manner, a delay for a Commission decision on repowering until after December 1 will not detrimentally impact the schedule for implementation of the transmission solution."

It took eight days after the last extension request was filed for the PSC to rule on whether they would grant it.  As of this writing there has been no decision.

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