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Repowering Extension Granted Until December 1

Apr042014
cpp_powerlines120The New York State Public Service Commission (PSC) issued an order last Friday granting an eight month extension to New York State Electric & Gas Corporation (NYSEG) and Cayuga Operating Company, L.L.C. (COC) in their effort to come up with a mutually agreeable repowering proposal for repowering the Cayuga plant with natural gas.  The new deadline gives the companies until December 1 to craft a plan that will include repowering the plant in order to provide reliable power to the region.  The order came in response to a request last week from NYSEG, with a supporting letter from COC.

"There are many aspects to this project. We’re closer on some than others, but we’re proceeding to work through the issues with our colleagues at NYSEG," says Upstate New York Power Producers CEO Jerry Goodenough.  "The current focus is on repowering the facility, but we are mindful of NYSEG’s identified transmission needs and are working with them and the PSC to ensure that the repowering discussion does not preclude any important transmission upgrades."

Attorneys for Sierra Club, EarthJustice and Multiple Intervenors (an association of over 55 large industrial, commercial and institutional energy consumers in New York State) filed letters opposing the extension, arguing that the extension would cause delays in transmission line upgrades and incur unnecessary costs that ratepayers would ultimately pay.  Multiple Intervenors attorney Michael B. Mager wrote a letter asking the PSC to deny the extension.  He said that the group he represents believes that COC and NYSEG have not credibly justified a new extension, and that NYSEG ratepayers are paying for an expensive Reliability Support contract.  He added that Multiple Intervenors has little confidence in NYSEG's assertions that the extension will not delay transmission line upgrades, and said the group would only support an extension if it is limited to one month and on the condition that it be the last extension granted.

"The fact that NYSEG and Cayuga now claim to need an additional eight months for further negotiations indicates that no agreement is imminent or even foreseeable at this point," he wrote.

But PSC Chair Audrey Zibelman dismissed the objections, saying "The facts do not support a contention that this extension will cause a delay in implementation of NYSEG’s transmission facilities or will result in unnecessarily prolonged Reliability Support Services payments to Cayuga. Similarly, there is no basis to conclude that NYSEG is incurring unnecessary costs in pursuing its identified transmission upgrades at this time. NYSEG is responsible for ensuring reliability and should continue to pursue the necessary approvals for the transmission solution it recommends pending its filing of a joint proposal or recommendations."

Goodenough says COC's negotiations with NYSEG are promising, and the company continues to work closely with NYSEG in an attempt to iron out their differences.  He adds that COC is in constant contact with the PSC.  He does not rule out further extension requests.

"We are committed to continuing our dialogue with NYSEG," he says.  "However, at this time it’s too early to tell.  The previous extensions were necessary in this process as is this current request. I’m confident that a repowering agreement we reach with NYSEG will be given appropriate consideration by the Commission."

On January 18, 2013 the PSC issued an order to COC and NYSEG to 'examine the relative costs and benefits of repowering the [Cayuga generating facility], and to compare those costs and benefits to the costs and benefits of alternative transmission upgrades over the long term'.  The plant submitted its proposal for repowering on March 26, and NYSEG turned in an alternate proposal on May 17 that would upgrade transmission lines and close the plant.  In September the PSC requested the two companies file a revised proposal that would meet the region's reliability needs and provide economic and environmental benefits at the least cost to ratepayers.  Since then a handful of extensions have been granted, the last of which would have expired Monday (March 31).

Most support for repowering the plant comes from within the Town of Lansing, while opposition comes from elsewhere in Tompkins County and New York State.  Goodenough insists that repowering the plant is important in an overall picture of providing reliable energy to the region while preserving and creating jobs in the region while enhancing the economic picture in the region, including millions of dollars in annual spending and maintaining or increasing the assessed property tax value of the plant.

"Folks in the community understand there is a need for power in the area, and the repowered plant can fulfill that need while maintaining the jobs, support for the local economy and the tax base," he says.  "There’s broad support in the community – the vast majority of the naysayers are outsiders trying to impose their world view on our community."

Lansing officials are planning a trip to Albany to lobby for keeping the plant open, and Tompkins County Legislator Mike Sigler initiated a petition to show broad support for repowering the plant

"While I wish the PSC would just come out with support for repowering, an extension is good news," Sigler says.  "It gives us more time to solidify support and let the PSC know the community is behind this plant.  We'll continue to collect signatures and rally support as we try and get this plant repowered."

Goodenough says that he encourages supporters' initiatives that show Albany they want the plant to remain open.

"Any and all efforts made to let folks in Albany know that the plant is a vital entity for this community area are important and appreciated," he says.  "The community has regularly demonstrated its support for the repowering project and we are most appreciative of their efforts."

The official ruling says:
  1. The request of New York State Electric & Gas Corporation and Cayuga Operating Company, L.L.C. for an extension until December 1, 2014, is granted.
  2. The Secretary may, in her sole discretion, extend the deadlines set forth in this order. Any request for an extension must be in writing, must include a justification for the extension, and must be filed at least one day prior to the affected deadline.
  3. This proceeding is continued.

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