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Report: No Sense in Repowering New York’s Cayuga Plant

August 24, 2015
David Schlissel

We’re out with a report this morning which finds that a proposal to repower the Cayuga coal-fired electricity power plant as a natural-gas-fired plant is economically unviable and would create a long-term drain on ratepayers.

Cayuga Operating Company, a subsidiary of Upstate New York Power Producers, owns the 60-year-old plant, which is just north of Ithaca in Lansing, N.Y. The company is seeking approval from the New York Public Service Commission for its plan to repower the plant under a 10-year ratepayer-subsidized scheme that would begin in 2017.

Our report, “A Losing Proposition: Why the Proposal to Repower the Cayuga Plant Should be Rejected,” includes three core findings:

  • A repowered Cayuga plant would require ongoing ratepayer-supplied subsidies totaling more than $265 million by the end of the 10-year period of the proposal and could require further subsidies beyond 2027.
  • The repowering project would not help the state in its effort to improve grid reliability.
  • There are less expensive and far better ways to achieve electric grid reliability and to maintain the local tax base and jobs and to promote economic development.

The Cayuga repowering proposal is part of a larger pattern of public subsidies for failing coal-fired power plants. They are costing taxpayers a lot more than is necessary. With the increased affordability of renewable energy and an option for transmission system upgrades, there are other, stronger alternatives to bailing out old, uneconomical coal plants like Cayuga.

Our report notes that the plant’s closure would create a fiscal challenge for the Lansing school district, Tompkins County, the Town of Lansing and two service districts amounting to an annual loss of $1.8 million.

But the state has investment mechanisms and resources in place already to fill the void. And while the costs involved with these changes can be borne by local governments, that approach would be unnecessarily narrow and burdensome.

Our report shows that ample state resources exist to help the community and workers weather the transition, and points out that the New York Power Authority (NYPA) has both the financial and energy planning resources to spearhead redevelopment.

David Schlissel is IEEFA’s director of resource planning.

David Schlissel

David Schlissel is an IEEFA analyst with 50 years of experience as an economic and technical consultant on energy and environmental issues. 

He has testified as an expert witness before regulatory commissions in more than 35 states and before the U.S. Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.

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