Schumer Announces Support of Repowering Dunkirk NRG Plant from Coal to Natural Gas - Urges PSC to Swiftly Approve Repowering Plan, Which is the Cleaner Energy Option, Protects Taxpayers, Creates Construction Jobs
Press Release
Standing at the Pier in Dunkirk, U.S. Senator Charles E. Schumer today urged the Public Service Commission (PSC) to adopt a plan to repower the aging coal-fired Dunkirk NRG Plant into a natural gas-powered plant, which is the cleaner energy option, protects taxpayers and will create hundreds of construction jobs. Currently, the PSC is evaluating two proposals regarding the future of the Dunkirk NRG Plant: an upgrade to transmission and delivery systems that would result in the plant coming offline or a complete repowering of the plant to burn natural gas instead of coal. Schumer argued that the plan for transmission upgrades is a short-term fix that would likely only resolve the reliability needs for a few years and would leave the local community in deep financial distress. Schumer explained that repowering the Dunkirk NRG plant is a more cost effective and environmentally cleaner solution that would ensure the plant's viability over a much longer period and hence protect its tax contributions to the city, county, and school district, and prevent a much larger tax hike for Dunkirk-area homeowners, predicted to be around $1,000 each. Furthermore, the repowering plan is projected to create 500 construction jobs over the next 3 years. If the NRG Plant closes, city taxes are expected to double and county taxes would rise significantly. Schumer therefore urged the PSC to swiftly approve the repowering plan at its upcoming approval meetings.
"After looking at all the facts, the repowering fix is clearly the most long-term, cost-effective solution for the city of Dunkirk and Chautauqua County. Repowering to natural gas ensures the plant's economic viability, is better for the environment, provides and efficient and cleaner form of energy, and protects the plant's tax contribution," said Senator Schumer. "Upgrading the transmission lines is simply an investment in dirty out-of-state production and does not solve the underlying financial concerns that have put the NRG plant on the chopping block. For residents who face a steep tax hike if the plant were to be unplugged, that provides inadequate relief. We have the power to create a brighter future for the NRG power plant and the residents of Dunkirk if we make the investment today to repower the facility for the future."
Schumer added, in his letter to the PSC, that, "The positive impact on long term reduction of household energy costs that a dual-cycle gas turbine generator can have over importing energy from a 50-year old coal plant in Pennsylvania or Ohio would lead to tremendous savings for ratepayers."
Schumer was joined by State Senator Catharine Young; Assemblyman Andy Goodell; County Executive Greg Edwards; Dunkirk Mayor AJ Dolce; Todd Tranum, President and CEO of the Chautauqua County Chamber of Commerce; Doug Stock, President Dunkirk AFL-CIO and other local elected officials and leaders.
"It is wonderful that Senator Schumer is standing with us in support of repowering NRG Dunkirk. With the Senator's support, government leaders from the local to the federal level are united in backing the repowering plan. Thousands of local residents, from senior citizens to teachers to small business owners, have spoken out about how crucial it is that the Dunkirk plant is repowered. Closing NRG would result in deep cuts to services, massive layoffs, and huge tax increases, while repowering would create up to 500 new jobs, stabilize our tax base, and generate clean and reliable energy. Senator Schumer understands that repowering is a positive solution all the way around," said State Senator Catharine Young.
"We are extremely pleased that Senator Schumer has thrown his support behind the NRG repowering project, recognizing that this project will result in over One-Half Billion Dollars of private investment in Dunkirk, the creation of about 500 construction jobs over three years, and the retention of several high-paid permanent jobs. This investment will also result in a tremendous reduction in air emissions, millions of dollars of ratepayer savings, and a substantial investment in the local tax base. We deeply appreciate the strong and unequivocal support of Senator Schumer for this win-win project," said Assemblyman Andy Goodell.
"Senator Schumer's visit sends a very strong message about the importance of the NRG plant," said Chautauqua County Executive Greg Edwards. "By having our Senior Senator from New York State personally come here as one of our County's highest representatives and call upon the Public Service Commission to support the repowering of NRG, it speaks volumes of the need to repower the Dunkirk plant to support our communities and the continued growth of our region."
"It is with great pleasure that I welcome Senator Schumer back to the Dunkirk Pier for this exciting announcement. The Senator's appearance and support behind this most crucial issue is welcomed. It gives further credence to the notion that the repowering of NRG is truly a bi-partisan effort and one that is extremely vital for the economic well-being of not only the City of Dunkirk, but all of Chautauqua County," said Dunkirk Mayor AJ Dolce.
"The 500 construction jobs this plan represents could help hundreds of out of work Western New Yorkers return to the job market. Getting our members back to work not only helps them support their families but also helps grow our regional economy -- which is why I am so pleased that Senator Schumer has chosen to lend his support to this important effort," said Dave Wilkinson, Business Manager for IBEW Local 106.
The Public Service Commission is currently facing two proposals in light of the reliability issues that were found in the mothballing of the NRG plant, and will approve one of the two plans and the corresponding rate increase to pay for the plan in the next few months. They can either approve a Transmission & Delivery (T&D) fix or a Repowering fix. The T&D fix, proposed by the utility company National Grid, is reported to cost $160M, but National Grid acknowledged that it could be much higher than that, and some experts have commented that National Grid vastly deflated the costs of their proposal. The fix involves upgrades to a transformer station in Cattaraugus County, upgrades to power lines, and buying more expensive, dirtier, coal-produced power from Pennsylvania. This proposal could lead to the closure of the NRG plant in Dunkirk which would have a devastating impact on the local community. NRG annually contributes an average of $40 million to the community and has invested $227 million on plant upgrades. The money that flows from NRG provided nearly 25% of Dunkirk city's revenue in 2012 and helps pay the cost of schools and public works, all of which is at risk if the plant is forced to close.
Schumer highlighted that upgrading the transmission and delivery of power is a short-term fix that doesn't address the underlying problem--the weakness of coal-fired energy in the developing energy market. T&D upgrades are only budgeted until 2021, when new action and new costs would likely be required. Moreover, the T&D fix relies on the viability of coal power plants in Pennsylvania, which will come under increased pressure to close as new environmental regulations go into effect in 2015.
Schumer today announced his support for the second alternative being considered by the PSC, repowering the facility to burn natural gas, which ensures NRG's continued presence in the community and solves the issue of sustainable energy development. If revamped, the power plant would be more environmentally-friendly and bring 500 construction jobs to the area. The $550 million plan invests in long-term energy development in New York State, rather than in Pennsylvania, by creating a state-of-the-art natural gas energy facility in Western New York. In addition to protecting the Chautauqua County tax base, and creating jobs in New York State, the repowering fix would also ensure the long-term viability of available power in Western New York, rather than relying on the unpredictable Pennsylvania coal plants. The repowering fix has wide support from the local community, and elected officials.
A copy of Senator Schumer's letter to the PSC appears below:
Dear Chairman Brown,
I write to urge the Public Service Commission to approve the $550 million plan to repower the aging coal-fired Dunkirk NRG power plant into a cleaner-burning, more efficient natural gas-powered plant. As the Public Service Commission considers various proposals to address local electric reliability needs presented by the proposed mothballing of NRG Energy's Dunkirk coal fired unit, I believe that repowering the plant is the best available option for the residents of Dunkirk and Chautauqua County and for New York. Repowering the plant would reduce harmful greenhouse gas emissions by shifting from coal to natural gas, protect taxpayers from severe local tax hikes, and ensure long term viability and supply.
In the next couple of months, you will meet to approve on of two proposals to address the closure of the Dunkirk NRG coal fired unit, a Transmission and Delivery (T&D) upgrade or a full repowering of the plant. The T&D plan proposed by National Grid would cost approximately $160 million and involve upgrades to a transformer station in Cattaraugus County, upgrades to power lines, and the import of coal produced power from Pennsylvania. I have significant concerns with the lack of clarity on how this will offer a long-term solution for the community's power needs and the potentially devastating effect it could have on the local tax base. Eliminating the existing power plant would lead to some severe tax increases for Dunkirk area homeowners due to the loss in revenue generated by the plant. Property taxes would increase 47% for the school district and city taxes would go up 42%, leading to a tax increase of up to a $1,000 per person. This plan only budgets for transmission and delivery upgrades through 2021, which goes directly against the PSC's requirement for showing reliability for 10 years or greater. Further challenging the long-term viability of the T&D plan is the weakness and lack of guaranteed delivery associated with having to import dirtier, coal-fired electricity from out-of-state power plants that are between 40 to 60 years old. The viability of existing coal fired plants that are highly pollutant will be increasingly challenged by emissions regulations that will soon be issued by the U.S. Environmental Protection Agency and the increased abundance of cheaper, cleaner natural gas.
The $550 million plan put forth by NRG to repower the Dunkirk facility, so that it burns natural gas instead of coal, would address issues of reliability and sustainable energy development, stabilize the local tax base, and bring 500 construction jobs to the area. Though this option presents slightly greater upfront costs in the short-term, such a significant investment in a state-of-the-art natural gas-generating facility in Western New York would lead to significant immediate- and long-term multiplier benefits.
First, the positive impact on long term reduction of household energy costs that a dual-cycle gas turbine generator can have over importing energy from a 50-year old coal plant in Pennsylvania or Ohio would lead to tremendous savings for ratepayers. Repowering Dunkirk could reduce wholesale electric charges by $142 million a year on average over a 10 year period, leading to back end savings of $1.4 billion. It is widely acknowledged that a newer, more efficient combined-cycle unit that could utilize lower cast natural gas can generate more energy at a cheaper price than an outdated coal-fired unit, which leads to savings for ratepayers. Second, the environmental benefits of repowering locally to natural gas can have a tremendous reduction of harmful greenhouse gas emissions, leading to much cleaner air. Studies show that greenhouse gases would be reduced by 73%, sulfur dioxide would be reduced by 99%, and nitrogen oxides will be reduced by 98%. By contrast, the transmission upgrades proposed by National Grid would result in an increase in air pollution because the power from the Dunkirk plant would be replied by coal power produced in Pennsylvania and/or Ohio. Neither of these states are part of the Regional Greenhouse Gas Initiative (RGGI) and it is likely that National Grid would import power from the Homer City coal-burning unit just outside of Pittsburgh, which has one of the worst environmental records in the nation.
Further highlighting the benefits of the repowering plan, is the impact closure would have on the local economy. NRG Energy annually contributes an average of $40 million to the local community and has invested $227 million on plant upgrades. The money that flows from NRG provided nearly 25% of the City of Dunkirk's revenue in 2012, which helps pay the cost of schools and public works, all of which is at risk if the plant is forced to close. Based on 2012 property tax levies, the closure of NRG would cause the loss of $3.4 million to the City of Dunkirk (41.83% of the entire City of Dunkirk local budget) and $4.1 million to the Dunkirk School District (30% of the entire local share of the local school district budget). The County of Chautauqua would lose $1.5 million. Repowering would not only preserve these sizable contributions to the local tax base, but boost the local economy by creating 500 construction jobs in 3 years. With unemployment remaining high, we cannot afford to not move with this investment.
When comparing these two options and they would have on the residents of the City of Dunkirk, Chautauqua County, and the Environment; the choice is clear. Repowering protects ratepayers, protects our children from breathing harmful emissions, and gives the local economy a jolt by investing over half a billion dollars. The residents of Western New York deserve a new state of the art facility that burns cleaner, cheaper natural gas, and I urge you and the members of the Public Service Commission to approve the proposed repowering of the Dunkirk plant. Thank you for your attention to this matter, please don't hesitate to contact me with any questions you may have.
Sincerely,
Charles E. Schumer
U.S. Senator
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