NRG Power Plant in Dunkirk

DUNKIRK – The effort to repower Chautauqua County’s largest property taxpayer appears to be over for good.

That’s according to the Jamestown Post-Journal, which reports Wednesday that county officials were made aware Monday of NRG’s decision to back off from the plant’s conversion from coal to a cleaner alternative in natural gas.

The plan was to convert the 530 megawatt coal burning facility to 450 megawatt gas burning facility and it appeared to be on track to take place earlier this year. However, concerns arose last month from NRG over the unanticipated cost of interconnecting the plant to the regional electrical power system and the schedule to get it done.

NRG says it was informed by the New York Independent System Operator that the cost to re-interconnect the plant would cost in excess of $100 million. An NRG spokesman had said that originally no interconnection costs were forecast.

The State System Operator, however, is reported to say that NRG’s decision to keep the facility out of service longer than originally stated meant the original interconnection rights had expired. If NRG had reactivated the facility within three years following the company’s decision to deactivate the plant, it could have avoided the need for system upgrades.

A little over six years has passed since NRG officials initially planned to mothball the facility.

The facility is the county’s largest property tax payer and was paying a significant portion of property taxes to both the city of Dunkirk and the Dunkirk School District. Those tax payments were adjusted when the facility was mothballed, though NY state had provided some aid to help offset the loss. A payment in lieu of tax arrangement was also revised by the Chautauqua County Industrial Development Agency in February 2017.

The IDA could now decide whether to continue or cancel the PILOT. If the arrangement was canceled, NRG would be forced to pay property taxes based on the current value of the plant. Without an NRG tax payment, city and school taxes in the Dunkirk area could increase by more than 42 percent.  For the average homeowner, this could raise property taxes by about $1,000 a year.

When operation, the power plant employed over 100 people, with 50 more jobs being projected once the full conversion took place.

NRG Power Plant in Dunkirk

DUNKIRK – It appears the fate of the county’s largest property tax payer is once again in jeopardy.

The Dunkirk Observer is reporting that the repowering of the NRG generating plant in Dunkirk from coal to natural gas is once again facing uncertainty.

In 2013, Gov. Andrew Cuomo announced that the Dunkirk-based power plant would repower and be converted from a coal burning facility to a natural gas facility.

But lawsuits and other delays have halted the conversion, and the plant has remained shuddered the past several years.  However, it was expected to come back online eventually, but that now seems doubtful.

Due to the unanticipated cost of interconnecting the plant to the regional electrical power system and the schedule in getting it done, NRG officials say it may be too costly to reconnect the plant to the power grid once it is converted.

The New York Independent System Operator manages the state’s electrical grid and its competitive wholesale markets. It recently said that the cost of the interconnection could exceed $100 million. The entire repowering project is estimated to be about $15 million.

In response, Sen. Cathy Young stated that the repowering of NRG has been a high priority with a lot of work taking place between state and local officials and stakeholders throughout the community. She said it was outrageous that the system operator has put the entire project at risk with the estimate cost of interconnecting, especially with the conversion process moving into its final phases.

Young said she will continue working with NRG officials to ensure the project comes to fruition.

Prior to being shuddered, the plant was the county’s largest property tax payer and it also made significant tax payments to both the city of Dunkirk and Dunkirk School District. It continues to make PILOT payments as it proceeds through the conversion process and New York State has also offered funding to help offset the loss of local tax dollars due to the plant being mothballed.

The Chautauqua County Industrial Development Agency Board of Directors and staff during the monthly meeting on Feb. 28, 2017 in Jamestown.

NOTE: Updated March 2, 2017 to include a correction in the ninth graph on the scheduled PILOT agreement for NRG when the plant was mothballed, along with a quote from NRG Spokesman David Gaier, who provided WRFA with the correction.

JAMESTOWN – The Chautauqua County Industrial Development Agency met on Tuesday and gave its approval to a renegotiated tax abatement agreement for the NRG power plant in Dunkirk.

Under the revised agreement, NRG – which was the largest tax payer in the county before the power plant was mothballed in 2015 – will make a total annual payment in lieu of taxes (PILOT) of $420,000, which will be split between the county, the Dunkirk School District, and the city of Dunkirk. That payment will continue for the next two to three years, depending on when the power plant repowering project – which involves converting the facility from a coal burning one to natural gas – will be completed.

Chautauqua County IDA Finance Director Richard Dixon said the renegotiation was needed to accommodate for the time it will take for the power plant to resume operation, but once it’s running, they original PILOT schedule will resume.

“It’s going to be a great project, repowering and moving forward,” Dixon said. “As we discussed, it’s going from 530 megawatts to 450, but they’re still going to make their full PILOT payments that they promised to make once the facility is up and running, so it’s a win-win for everybody.”

NRG Power Plant in Dunkirk

A public hearing on the renegotiation took place last week in Dunkirk, with some residents voicing concern that the city was not invited to be part of the renegotiation process and also were disappointed that the NRG plant will not have as many employees working once the conversation is complete. As with most tax abatement deals, the number of employees a project will yield is one of the factors typically considered.

However, North County Legislator and IDA board member George Borrello (R-Irving) said that all parties were represented in the process.

“All the stakeholders, the taxing entities, were a part of this process,” Borrello said. “And when you think of where we were a year ago, when repowering wasn’t even on the table at that point, to where we are now with the lawsuit behind us and NRG ready to move forward, this is a huge step in the right direction and I think that is an important point. The bottom line is this PILOT agreement gets them to agree to pay at a higher rate, even though they are not going to be producing as much electricity, is a huge boon and a big win for Dunkirk, the North County, the School District, and everyone else involved.”

Once the power plant is back on line, NRG will again follow the original PILOT schedule that was agreed to in 2008, which goes up to over $10 million in the last year, despite a power capacity reduction from 530 megawatts to 450 megawatts.

The renegotiated PILOT payment is still about 85 percent less than what would have been paid had the NRG plant not been mothballed by the company. According to NRG spokesman David Gaier, the company actually had the option to not make any PILOT, but still opted to move forward with a payment.

“To provide some tax relief and certainty at this time, we’ve agreed to pay $420,000 annually until the first Dunkirk unit returns to service on natural gas. In addition, NRG paid $13.9 million more than we were required to – purely out of goodwill to the community rather than obligation – for tax years 2014 and 2015,” Gaier told WRFA, adding, “NRG continues to work on advancing the Dunkirk natural gas project, assuming that all other stakeholders continue to meet their previous commitments to the project.”

The loss in revenue due to the mothballing of the facility and also during the time it will take to convert the plant and get it back online will likely be offset by state mitigation aid, which Sen. Cathy Young and Assemblyman Andy Goodell have both said they are committed to bringing to Dunkirk in the upcoming state budget.

In other news, the IDA Board also approved an amendment to the subordination agreement with the Stannard Group, which involves changing financial positioning in regard to where the IDA falls in line when it comes to the group repaying on an Al Tech loan.

The IDA board also approved the creation of a Transactions Committee, which will allow the IDA to move forward with preliminary actions without the need to meet as a full board. The committee will be comprised of the board chair, the executive director, the finance director, and the project manager.

And the board approved a preliminary resolution to begin the process of negotiating a tax abatement deal with Great Lakes Cold Storage, as an incentive to get the company to build a 110,000 square-foot storage freezer warehouse at a location in Dunkirk to help assist the Fieldbrook Foods plant. Officials say if the warehouse is built, 27 new jobs would be created and there cold also be the potential for a 100,000 square-foot expansion. However, the company is also considering building a warehouse at a location in Pennsylvania, so officials want to move forward with drawing up a proposal and seeing if it will be enough to convince the company to build in Chautauqua County.

The board is expected to consider the proposed PILOT agreement for Great Lakes Storage during the March board meeting, which will also be when the full board reviews the 2016 audit.

NRG Power Plant in Dunkirk

DUNKIRK – The mothballed NRG power plant in Dunkirk could have a chance of reopening.

NRG Energy, the plant’s owner, said it will look to revive its original plan to convert the coal-burning power plant to run on natural gas. The announcement comes after another energy company – Entergy Corporation – announced it was dropping its lawsuit against NRG, which had blocked the project and led to the facility’s mothballing at the start of this year.

NRG announced in March 2012 that it would mothball the Dunkirk plant because it no longer was economically viable, but it agreed to keep operating the facility through 2015 to maintain the reliability of the region’s power grid after receiving more than $110 million in payments from National Grid ratepayers.

Senator Cathy Young (R-Olean) sent out a release on Monday, calling it news that Dunkirk has been praying for.

The plant was mothballed in early January, creating a massive hole in Dunkirk’s tax base. The state had stepped forward an offered emergency funding to offset the lost PILOT payments NRG had pulled from the county, city of Dunkirk, and Dunkirk School District – but that emergency funding was only temporary and didn’t provide long-term aid.

An NRG official told the Buffalo News the company is willing to move forward with its conversion plans, provided that other companies and agencies that were involved in the project still are interested in making the same commitments that they were before it was put on hold. National Fuel Gas Co., for instance, was preparing to build a pipeline to carry natural gas to the plant, but that agreement was terminated in May 2016. The state Public Service Commission also must back the project.

The NRG Power Plant is the largest taxpayer in Chautauqua County and employs over 100 people, with 50 more jobs expected once the full conversion takes place.

NRG Power Plant in Dunkirk

WASHINGTON – Congressman Tom Reed (R-Corning) and State Sen. Cathy Young (R-Olean) are expressing their concern and disappointment with the New York State Public Service Commission (PSC) after learning it plans to terminate a contract involving the repowering of the NRG Power Plant in Dunkirk.

Reed and Young both made a statement on Tuesday regarding the expected cancellation of the 10-year agreement that was made in 2014 between NRG and National Grid. Under the terms of the 2014 contract, the NRG coal-burning power plant would have be converted to a natural gas-burning power plant. The move would have allowed the plant to remain operational, preserving dozens of jobs in the north county while also maintaining property tax payments for the city of Dunkirk, the Dunkirk School District, and Chautauqua County.

However, the PSC now plans to terminate the agreement and is seeking public input on the matter.

According to the PSC, the likely termination is based on NRG’s decision to mothball the facility rather than meet the required September 2015 deadline to add natural gas-firing capabilities to the plant. The PSC also cites the decision by NRG to go with other transmission upgrades that would make the conversion of the plant in Dunkirk obsolete. Moreover, the PSC has cited an April 19, 2016 Supreme Court decision (Hughes v. Talen Energy Marketing, LLC) that could be used to nullify any state-ordered contract for the sale of electric generation capacity – including the one that was approved in 2014 between NRG and National Grid.

• READ THE PSC’S LETTER SEEKING PUBLIC COMMENT [PDF]

Because of the reasons provided, the PSC is now requesting public comment on the impending contract termination, with a deadline set for June 3, 2016. Any filings should refer to “Case 12-E-0577.”

The power plant was mothballed by NRG as it worked to fight a lawsuit challenging the conversion, as well as focus on other projects not involving the Dunkirk facility.

REED, YOUNG BLAME STATE’S ‘ANTI-NATURAL GAS AGENDA’

Rep. Tom Reed (R-Corning)

On Tuesday Congressman Reed politicized the PSC decision by putting the blame on Gov. Andrew Cuomo and other state lawmakers who’ve pushed for a an energy policy that focuses more on renewable sources, rather than those from fossil fuels.

“It’s very frustrating that this NRG plant will close due to the extreme anti-natural gas agenda in Albany,” Reed stated. “The result is jobs lost, higher electric rates, and higher property taxes – directly harming our community. Our entire region will suffer the negative consequences of a weaker economy – all because of extremists in Albany who are opposed to natural gas telling those of us in places like Dunkirk and Chautauqua County that they know better than we do.”

Senator Young also released a statement on Tuesday, which also pointed the finger at state policy for failing to keep the conversion from moving forward, instead supporting out-of-state interests.

“I condemn the state’s new found policy to destroy our power generators, and thus our jobs and tax base, by relying on importing power from Canada and dirty coal plants in neighboring states, including Pennsylvania and Ohio,” Young said. “Most notably, the PSC previously approved a huge transmission project so that National Grid now draws power into Western New York from Pennsylvania’s Homer City, one of the hugest, filthiest coal plants in the country. The substation that was completed last December has a 345,000 volt line coming from Homer City into a substation in Cattaraugus County, reducing the voltage to 115,000 volts, the same voltage that was generated by Dunkirk NRG’s power station. There also is transmission construction south of Dunkirk by Pennsylvania’s First Energy power company, which also is replacing Western New York’s power generators.

Senator Catherine Young (R-Olean)

“These out-of-state imports have replaced NRG’s power that is needed to maintain system reliability,” Young continued. “Pennsylvania’s grid power has triple the greenhouse gas emissions than New York State power sources, and Pennsylvania does not belong to the Regional Greenhouse Gas Initiative (RGGI). All of those toxic pollutants spewing from these neighboring coal plants and the acid rain generated by them drifts into New York State, negatively impacting our people’s health and our environment.”

Despite the latest developments and the odds being staked against the Dunkirk plant, Sen. Young said she would still fight to keep the project moving forward.

“As long as the contract between NRG and National Grid is in place, there is hope to repower the NRG plant into a clean, efficient natural gas facility that would provide jobs and stabilize the tax base,” Young said. “Now the PSC is pushing to discontinue the contract based on the fact that NRG has failed to begin the construction, the PSC and the Independent System Operator (ISO) have instituted policies to make New York State dependent on out-of-state generators and transmission, and the fact that there is a Supreme Court decision which holds that state regulators cannot interfere with wholesale interstate power markets.

“Killing New York jobs and taking away our power generation hurts our economy, and dooms Western New York’s ability to expand manufacturing opportunities… The PSC and ISO policy of exporting our jobs and power generation is a catastrophe.” Young added. “New York State government should be held accountable for these terrible decisions.  The madness of wiping out our power generation has to end… That is why I am introducing legislation to require an analysis of imported power, a comparison of pollution from out-of-state generation to our power plants, and an analysis of its effect on our state’s power industry.”

While a contract termination by the PSC could spell major economic problems for Dunkirk and even the entire county, Young also reminded residents that there will be financial assistance during the short-term.

“Our regional taxpayers will not be hurt because we successfully fought to include the power plant mitigation fund in this year’s state budget, so the tax loss from the NRG pilot payment will be offset to the Dunkirk School District, the City of Dunkirk, and Chautauqua County,” Young said. “But we need long term solutions. If the PSC does discontinue the contract between NRG and National Grid, I will work as hard as I can to effectuate alternate solutions that will grow jobs, the economy, and the tax base.”

Congressman Reed said he will also work to find alternative solutions, should the contract termination take place.

“Our office will continue working with them and other local leaders to ensure that we can bring quality, family-sustaining jobs our region. We will continue exploring new options to obtain federal help for communities directly impacted by coal plant closures and to encourage use of our domestic energy resources such as wind, solar, natural gas and clean coal rather than depending on Middle East oil.”

NRG Power Plant in Dunkirk

DUNKIRK – The owners of the largest tax payer in the county wants to slash its Payment in Lieu of taxes agreement with the county, City of Dunkirk, and Dunkirk School district by 85 percent.

That’s according to Senator Cathy Young, who said NRG, which runs the large Power Plant in Dunkirk, filed a letter of intent with the state on Monday. If the reduction were to go into effect, it would result in a total loss of $7.1 million in tax revenue.

Young, who’s worked the past several years to ensure the NRG plant would not close down but instead by converted from a coal plant to one powered by natural gas, said the move is extremely disappointing, especially since our community has stood so soundly behind the company.

She also pledged to bring financial relief by outlining a plan of action which includes both short term and long term solutions.

Young said that if NRG refuses to restore the cut, in the short term she will fight to restore the PILOT amount to the city, school and county in this year’s state budget.  Last year, the State Senate added a $19 million line item to provide assistance to communities across the state affected by the loss of power plants. Young said if necessary, she will push to access this fund to provide financial relief to the city, school, county and our taxpayers

In the Long term, she said it’s crucial that NRG not delay construction any longer on its RePowering project and get the work underway to convert the coal plant into a natural gas plant that she says will stabilize the tax base, provide jobs, and ensure that Western New York has a baseload power generator to grow manufacturing and other economic opportunities.

NRG Power Plant in Dunkirk

ALBANY – It’s not looking good for the future of the NRG power plant in Dunkirk.

A recently released  study shows the NRG plant, along with another in Tonawanda, can be shut down without affecting energy reliability to the region’s businesses, homes and other customers.

The report by the New York Independent System Operator, done with National Grid, would appear to all but seal the closure of the Huntley Station power plant in the Town of Tonawanda. According to the report, the Huntley power plant can be replaced by transmission system upgrades. That key finding could pave the way for the plant to be shuttered by March, as NRG announced would happen.

The report also found the NRG plant in Dunkirk could be mothballed as early as January after some transmission updates, despite the state committing millions of dollars in investment to help convert the plant from a coal burning facility to one that uses natural gas.

“Based upon the expectation of the timely completion of the National Grid upgrades and that no other changes occur to the current and planned status of the New York electric system, reliability will be maintained through at least the year 2020 if Dunkirk is mothballed January 1, 2016, and Huntley is retired March 1, 2016,” wrote Richard Dewey, executive vice president of NYISO.

Huntley is considered by environmentalists to be the state’s most polluting power plant. In general, coal plants cause the most air pollution. Nationwide, a number have closed or will in the next few years.

Supporters of the two power plants say the logic behind the study is flawed because it is based on an assumption that National Grid will bring into New York additional power from coal-burning Pennsylvania plants – which they say is far more hazardous to the environment than the NRG plant in Dunkirk. They add that the state sponsored study encourages an energy policy that helps out-of-state jobs and utilities at the expense of New York energy industry workers and local tax revenues.

Senator Catherine Young (R-Olean)

“This news is extremely disappointing but there are other factors to consider in addition to reliability,” Said Senator Cathy Young (R-Olean), who’s spearheaded the effort to keep the NRG plant in Dunkirk open. “Jobs, economic impact, emissions reductions and tax revenue are required under law to be determining elements in a solution.”

Both facilities have been important drivers of tax revenues for their host municipalities, with the NRG plant generating $1.5 million in tax revenue just for Chautauqua County, with large payments also made to the city of Dunkirk and Dunkirk school district.

“My highest concern is for the well-being of the community. I am going to do everything I can to ensure the economic vitality of the region,” Young said.

A recent lawsuit against the conversion of the NRG plan has halted the transition from coal to natural gas, although Senator Young said the repowering agreement is still in place and NRG still can go ahead with the project in spite of the lawsuit.

“Our people have been very clear on the need to repower and I have been fighting for this project for three years.  I am going to continue to fight for it because the decision for repowering was made for all the right reasons,” Young said. “There also are congestion problems on the electricity grid that need to be resolved. NRG can be part of that solution.”

Critics have said Dunkirk should be allowed to close, as NRG originally proposed, because it is both uneconomical and that the money required to shift its operations from coal to natural gas can be better spent improving the state’s troubled and aging electric transmission system.

Rep. Tom Reed (R-Corning)

DUNKIRK – A rally to show support for continuing the NRG Repowering project will help to show officials in Albany how important the project is to Chautauqua County  and Western New York.

That’s according to Congressman Tom Reed (R-Corning, NY-23), who said he’s been following the NRG Repower process, along with the news earlier this year that a lawsuit has been filed by competitor Entergy Corporation (which operates Indian Point Nuclear Power Plant in the Hudson Valley) in hopes of stopping the conversion from moving forward.

In response to the lawsuit, NRG announced in August that the Dunkirk plant will have all four units shutdown by the start of 2016, meaning the Repower project will have to put on hold. The NRG Repower Project involves converting the plant from being a coal-only power generating plant to a natural gas generating facility.

Earlier this month, State Senator Cathy Young (R-Olean) announced that a rally would be taking place this Saturday, Oct. 17 at 10:30 a.m. at the Dunkirk Pier, with both state, county and local leaders coming out to show support for the Repower project.

Congressman Reed said that while he may not be able to attend the rally, he’s still providing help.

NRG Power Plant in Dunkirk

“We are working hand-in-hand with Senator Young as well as with different parties that are at the table,” Reed said during a conference call with regional reporters on Monday. “One of the issues that has developed is this lawsuit… so I think that bringing the governor into the equation is something that is critical going forward so we’ve been putting pressure on all the parties and telling local and state officials that we are here, we want to stand with them and I am confident that we’re going to have a successful outcome and NRG will go forward.”

The NRG Power Plant is the largest taxpayer in Chautauqua County and employs over 100 people, with 50 more jobs expected once the full conversion takes place.

NRG Power Plant in Dunkirk

DUNKIRK – State and local officials will converge in Dunkirk later this month to take part in a rally to show support for the NRG power plant.

“A huge turnout is needed one more time to send a loud and clear message — the community continues to resoundingly support repowering the NRG plant,” said Senator Catharine Young (R-Olean). “We’ve done it before and we need to do it again. People’s voices got us this far, and now we need to get over the finish line. Our future depends on it.”

Senator Young will lead a united coalition of community members, Assemblyman Andy Goodell (R-Chautauqua), local and federal officials, businesses, labor organizations and Dunkirk City School representatives in a public rally on Saturday, October 17, at 10:30 a.m. on the Dunkirk Boardwalk.

Senator Catherine Young (R-Olean)

“All of the powers that be in Albany and Washington, D.C. need to understand how urgent repowering is for our taxpayers, workers, school children and the community. NRG by far provides the largest tax revenues to the school district, city, and county. It provides jobs, and is key to our economic future. If the plant shuts down, it’s devastating,” the senator said in a media release sent out on Thursday.

“Our rallies have produced remarkable results. On the hottest day of the year in July of 2013, thousands of concerned citizens showed up to a Public Service Commission (PSC) hearing at SUNY Fredonia to vocalize their support of NRG’s Dunkirk facility. On one of the coldest days of the year, more than 1,000 community members rallied again on December 7 on the Dunkirk pier. Nine days later, the community was overjoyed when Governor Cuomo came to Dunkirk to announce a natural gas retrofitting of the facility and a ten year contract with National Grid,” Senator Young said.

Since that announcement, competitor Entergy has filed a lawsuit in federal court in Syracuse against the PSC to attempt to block the project.

“Shutting down NRG would limit supply so competitors can make enormous profits. Consumers will be doubly hurt by high prices and lack of reliability on the grid,” Senator Young said.

Currently, the state’s Independent System Operator (ISO) has been directed by the PSC to conduct two studies to evaluate reliability and congestion concerns in Western New York.

​The Power Up Western New York Coalition is joining Senator Young to show their support and urge continued progress on the repowering project. Concerned citizens are encouraged to visit the site, www.PowerUpWNY.org to help spread the word about the event and the importance of the plant to the community.

“I know our community is passionate about this project and I look forward to seeing everyone at the pier, rain or shine,” said Senator Young.