Cayuga Power Plant and NYSEG fail to agree on plant's future
The future of the Cayuga coal-fired power plant in Tompkins County remains up-in-the-air, almost three years after plans to close the plant were announced.
The local utility, NYSEG, opposes a proposed conversion to natural gas and wants to invest in their transmission system instead. Either way, the cost will be added to ratepayers’ bills.
Any time a power plant wants to shut down in New York, the state’s Public Service Commission decides whether the grid can withstand the loss. The PSC rejected Cayuga’s request to shut down in 2012 and ordered a repowering plan to get the plant off of coal and onto natural gas.
The plant’s initial plan, with a price tag of up to 370 million dollars, was rejected. In 2013, the state ordered NYSEG and Cayuga Operating Company to come up with a repowering plan they could both agree to. Those negotiations failed. Cayuga is now proposing a plan that would power the plant with either coal or natural gas, depending on prices. They want 49.5 million dollars up front for construction and 9.6 million dollars per year for ten years from NYSEG.
From Cayuga Operating Company's proposal to the PSC:
After the repowering is complete, Units 1 and 2 will remain capable of generating approximately 300 MW in total. Notably, Unit 1 will retain its existing capabilities and will employ a highly-flexible design, such that the fuel source can be switched back and forth between natural gas and coal within 24 hours and, in most cases, while the unit is operating. This responsive dual-fuel capability provides added reliability during times when natural gas supplies are either limited, too costly, or both. Cayuga anticipates that repowering can be completed and commercial operation commenced on or about January 1, 2017.
In their response, NYSEG maintained that the upgrades to power transmission were the more cost-effective path forward:
NYSEG estimates that customer payments under a Cayuga Facility repowering are expected to be approximately $452.3 million on a NPV basis. NYSEG has estimated market revenues from sales by a repowered Cayuga Facility of $263.7 million on a NPV basis, resulting in a net cost to customers of $188.6 million for repowering.
The PSC will now have to choose between the two plans. There is no timeline for a final decision.