By Jessica DiNapoli
Published: 2:00 AM - 07/03/14
Last updated: 9:27 AM - 07/03/14
The pieces are falling into place for the Danskammer power plant to resume operations, providing some relief to Hudson Valley ratepayers whose bills have been inflated by a recently instituted pricing zone.
The New York State Public Service Commission issued an order last week that paves the way for Danskammer to be repowered.
The PSC approved the transfer of the power plant to a new entity that will be majority-owned by Mercuria Energy America, which plans to return the plant to operation.
The PSC said the transfer and the potential repowering do not cause a significant environmental impact and do not need further review under the State Environmental Quality Review Act. Mercuria plans to run Danskammer on natural gas instead of coal, a benefit to the environment, according to the PSC.
The Federal Energy Regulatory Commission must also approve the plant's repowering, said Central Hudson spokesman John Maserjian in an email.
Four-year contract reached
Last week, Central Hudson inked a four-year contract with Mercuria for purchases of capacity from the Danskammer plant, Maserjian said. The terms of the contract are shielded by a confidentiality agreement, he said.
Unlike a purchase power agreement, where a utility buys actual kilowatt-hours of electricity, capacity is only the ability of plants to produce power if needed in unforeseen circumstances, Maserjian said.
Utility bills will rise 3%
Repowering Danskammer will help mitigate the effects of a new electricity pricing zone, Maserjian said. Residential utility bills will spike by only 3 percent, instead of 6 percent, with Danskammer repowered, he said.
It will also create additional jobs, Maserjian said. Dynegy, Danskammer's former owner, laid off 70 union workers when it closed the plant.
The PSC states that Mercuria is responsible for obtaining any other local permits or other approvals it needs to turn on the plant, such as permits from the state Department of Environmental Conservation.
Stanley Widger, an attorney for Mercuria, said the company is working with the DEC on potential modifications to the permits, to the extent that they are needed at all.
Widger added that work is underway to refire the plant. Danskammer must be tested before it can go into commercial operation, he said.
Helios Power Capital, Danskammer's current owner, partnered with Mercuria after it purchased Danskammer from Dynegy in bankruptcy court.