David Giambusso for Politico:
The Cayuga power plant near Ithaca, one of the few remaining coal plants in the state, will not get the approval or the $102 million needed to refuel and keep it viable, the state Public Service Commission ruled Tuesday.
Instead, the state approved a proposal from New York State Electric & Gas and National Grid to upgrade transmission lines in the area, which the utilities have long argued was a better and more economic option to maintain reliability for the region.
Until recently, the Gov. Andrew Cuomo’s administration was unconvinced. In a curious political posture for a governor whose rhetoric on energy is focused on renewable, clean power, his quest to keep the Dunkirk coal plant in Western New York open and his ambivalence on Cayuga brought him into direct conflict with the environmental lobby that has exercised unrelenting pressure on him.
The PSC ruled on three orders as part of its decision: one was to not fund Cayuga’s repowering, another was to approve the transmission upgrades, and the third was to approve the plant’s sale to Riesling Power, a Maryland-based energy company.
Cuomo’s position was complicated by the need to balance jobs and property tax revenue the plants brought to a struggling region against his promises to clean up New York’s energy supply. Riesling is now negotiating a deal to purchase both the Cayuga plant near Ithaca and a large coal plant in Somerset. Riesling has promised to keep staffing at current levels, though with Tuesday’s decision, it is unclear how long that can be continued, especially since Cuomo has promised to phase out coal in New York by 2020.
Cayuga is enjoying a ratepayer funded lifeline through June 30, 2017.
For the time being, the state’s decision has saved utility customers roughly $80 million. The new transmission upgrades will cost $23.3 million; refueling would have run nearly five times that amount, or about $102 million, according to figures provided by the state.
“We are very cognizant of the potential local economic effects of retiring power plants,” PSC chairwoman Audrey Zibelman said in a statement after Tuesday’s vote. “However, in this instance, the power plant itself does not solve our reliability concerns. Moreover, when we considered the combined lack of benefit to the power grid with the significantly higher costs of the refueling option, we determined it would simply be unfair to ask NYSEG consumers to shoulder both the transmission and refueling expense.”