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Cayuga Power Plant

The New York Power Authority (NYPA) granted 2MW ReCharge NY low-cost hydropower to the Lansing site of what is to become one of two Empire State Data Center locations.  The allotment is a portion of 23 megawatts of ReCharge NY power and low-cost hydropower to 11 enterprises across New York State.  The allotment fell far short of the 25MW Heorot Power Holdings had requested for the site.  But the allotment makes Cayuga Operating Company (COC) a NYPA customer, which starts the process of obtaining enough power allotment to begin building the new data center.  The plan is to repurpose the Lansing coal-fired power plant into what company officials hope will eventually be a 100 megawatt data center at its north-west Lansing site.

COC had applied for an initial allotment of 25MW, and while the 2MW is not enough to begin work on the data center, it is considered a positive first step.  While it is only 8% of the company's request, it is just over 8% of the entire state-wide allotment in this round of NYPA allocations, a respectable piece of the pie considering the allotment is shared by 11 enterprises across New York State.  Company officials declined to make a statement, but indicated that they are working with NYPA on the next steps for obtaining the power allotment they need for the project.  As of now there is no immediate timeline.

On September 26th Governor Andrew M. Cuomo announced the low-cost power allocations will support more than 4,100 jobs and $231 million in capital investment commitments statewide. The Lansing location is expected to account for 20 of those jobs and $25 million in capital investments.

The September announcement came on the heels of the company's Somerset Plant getting a 10MW hydropower allotment last August.  Heorot plans a 500 megawatt data center at the location of its closed coal-fired power plant in Somerset, about 55 miles west of Rochester.  While the Somerset allotment was only 10% of what Somerset asked for, company officials said they viewed it as an encouraging first step for eventually procuring additional allotments.

ReCharge NY is currently providing power to nearly 740 businesses and not-for-profit organizations.  The program provides lower energy costs in return for companies remaining in the state, growing employment and expanding its operations and making significant investments in their local businesses.  Heorot Power Holdings officials have said they expect to invest $650 million into their two sites, and generate 200 full time equivalent jobs with average salaries between $40,000 and $60,000, as well as approximately 100 construction jobs.

As the Cayuga Power Plant is being permanently shuttered company officials have reopened negotiations with the Tompkins County Industrial Development Agency (IDA) to determine the next phase of its PILOT (Payment In Lieu Of Taxes) agreement, which determines the tax valuation of the property.

Local officials are carefully watching the process of these negotiations, as they will impact tax revenue for the Town of Lansing and the Lansing Central School District.  At the September 25th Board of Education meeting School Business Administrator Kate Heath alerted the school board that negotiations were reopening, and said she would be able to share information with board members as it becomes available.

Transition funds may be available for Lansing taxing authorities to help adjust to the declining tax revenue from the plant.  State Assemblywoman Barbara Lifton and State Senator Pam Helming advocated state transition aid for communities like Lansing that lose large tax contributors.  ButLansing has not been eligible for such funding, because one of the requirements would be that the plant be entirely closed.  The plant closing clears the way for local officials to pursue transition funding.

With the plant closed the assessment is likely to decline again, but Town officials have been cautiously optimistic that once the data center comes online the assessment of the property will begin to rise, although officials do not expect it to reach the $160 million high in the 2009-10 school year.  The current value, determined by the PILOT currently in place, is $20 million.

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