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Source: The Buffalo News

Tonawanda braces for end of Huntley era

Power plant closure plan would affect jobs, revenue


Posted: August 26, 2015
Originally Published: August 25, 2015

The end seems at hand for the Huntley Station power plant in the Town of Tonawanda.

NRG Energy, the plant’s owner, Tuesday submitted a plan to the state Public Service Commission to permanently retire the coal-fired facility March 1, 2016.

The shutdown would mean the loss of 79 jobs and also millions of dollars in revenue to the town and the Kenmore-Town of Tonawanda School District.

The company pays nearly $3 million a year to the school district, $2 million to the town and about $800,000 to Erie County, said Town of Tonawanda Supervisor Anthony F. Caruana.

“It’s probably not totally unexpected,” Caruana said of Tuesday’s announcement. “Unfortunately, it’s very disappointing.”

School Superintendent Dawn F. Mirand called the announcement a “great concern.”

“For decades, the Huntley Generating Station has been a significant source of tax revenue for the Kenmore-Town of Tonawanda School District,” Mirand said. “In recent years, the district has had to absorb significant losses in revenue due to diminished operations at the plant.”

The announcement also signals an end to a plant that ranks as one of Erie County’s biggest polluters. But it was economics – not taxes or the environment – that drove the business decision.

“We don’t foresee any scenario where the plant would be economically viable,” said David Gaier, NRG’s spokesman. “This is a reflection of the economics of power generation.”

Gaier said a trifecta of low prices for natural gas, capacity and energy combined to ring the death knell for the massive century-old Huntley plant that towers above the Niagara River.

The company declined to disclose financial details about Huntley. But a report last year by the Institute for Energy Economics and Financial Analysis estimated Huntley’s pretax earnings dropped by $113 million between 2008 and 2012 and was most recently operating at an annual average loss of $1 million.

NRG disputes the figures, and Gaier called them “inaccurate.” But Cathy Kunkel, the co-author of the report and research fellow at the institute, said Huntley’s move to close the plant Tuesday suggests otherwise.

“I don’t imagine they’re that far off,” Kunkel said. “It’s definitely a national trend.”

‘We just have to recoup’

Local government and school district officials now look at a future without Huntley – and have to find ways to cope. Some of that has already happened, Caruana said.

“We just have to recoup that by recruiting new businesses here,” he said.

Montante Solar, a solar energy installer, and FedEx are operating new facilities at the Riverview Solar Technology Park on Kenmore Avenue, Caruana said.

School officials see help in the form of a late-session bill that passed in the State Legislature in June allocating $19 million for communities impacted by retiring coal-powered plants.

“As we face the limitations of the property tax cap and state aid that is below 2008-09 levels, we hope Gov. Cuomo and the State Legislature will recognize the significant impact the closure of the Huntley Station will have on the Kenmore-Town of Tonawanda School District as we seek to prepare all students for success in college and careers,” Mirand said.

Huntley’s decreased operation – driven largely by public policy favoring natural gas and renewable energy – already translated into lost jobs and revenue.

Originally six coal-fired units strong, two of Huntley’s units were retired in 2005 and then two more in 2007. The remaining two, which produce 190 megawatts of electricity, came online in the late 1950s but have been operating at drastically reduced capacity in recent years. That led to Huntley’s successful challenge of its property tax assessment with Erie County.

What resulted was a drastic drop in payments from Huntley to the school, town and county. Three schools in Ken-Ton were shuttered in recent years and 135 school employees were laid off. Because of the reduced operation, the plant’s staff dwindled from about 125 workers to 79.

“The impact has been felt,” said Richard Lipsitz Jr., president of the Western New York Area Labor Federation.

Environmental effects cited

Then, last September, as a condition to renewing its water pollution permit, the state Department of Environmental Conservation required Huntley to operate at no more than 15 percent of its capacity.

Huntley, like many coal-fired power plants, has been in the crosshairs of environmental groups for years.

The plant is routinely listed among Erie County’s top polluters when the U.S. Environmental Protection Agency publishes its annual Toxics Release Inventory.

In 2013, Huntley generated about 440,000 pounds of pollutants, the inventory showed. The plan collected and transferred most pollutants. But the plant released about 56,000 pounds into the environment, including 34,641 pounds of hydrogen fluoride; 20,514 pounds of hydrochloric acid; 884 pounds of barium compounds, 83 pounds of lead and 17 pounds of mercury.

“The Huntley plant is consistently among Erie County’s top polluters, emitting toxins into the air we breathe and the water we drink,” said Brian Smith, associate executive director at Citizens Campaign for the Environment. “There’s no doubt that Huntley’s closing will mean a cleaner and healthier community.”

Huntley, which upgraded its environmental controls at the plant and operated at decreased capacity, reported significant drops in pollution over the last decade, according to EPA data.

The Just Transition Coalition, made up of members from the Clean Air Coalition of WNY and labor, municipal and school leaders, came together over the last year or two to plot a post-Huntley future along the Tonawanda shoreline.

‘Reliability review’ begins

The coalition’s work included:

• Planning for ways to offset revenue losses, such as through state and federal community assistance programs like the budgeted $19 million.

• Preparing employees for transition into other jobs.

• Sketching ideas for the reuse of upward of 30 acres of waterfront property at the Huntley site.

“I actually feel we’re ahead of the game this time,” said Erin J. Heaney of the Clean Air Coalition. “While the impacts are going to be real, we’re going to be well-positioned.”

Lipsitz added: “We’re way ahead of this thing compared to where we would be today if we’d been getting hysterical phone calls from people saying, ‘What are we going to do now?’ ”

Tuesday’s announcement by NRG launches a 180-day “reliability review.” The state Independent System Operator, National Grid and other affected utilities will study whether Huntley’s shuttering would create lapses in the reliability of the regional electrical grid and consult with the PSC.

“Generators are allowed by law to withdraw from service if reliability is not compromised,” said James Denn, a PSC spokesman. “If there is a reliability concern, Huntley will remain operational until other alternatives are put into service.”

If it’s found that Huntley does not play a role in regional electrical reliability, NRG would “move to retire both units (at Huntley) as of March 1, 2016,” Gaier said.

“NRG does not take these actions lightly,” Gaier said. “We value and appreciate the dedication of our employees in providing safe and reliable generation at the Dunkirk and Huntley stations.”

Plan for Dunkirk ‘on hold’

Gaier characterized the company’s plan to repower the Dunkirk power plant with natural gas as “on hold” following a federal lawsuit filed earlier this year by Entergy Corp., a Louisiana company that operates a nuclear power plant in Oswego. Entergy contends the Federal Energy Regulatory Commission should have approved any repowering at Dunkirk, not the state PSC. NRG was not named as a party to the lawsuit, but intervened in support of the project.

The lawsuit, which Gaier said could “take years” to resolve, forced NRG’s decision, he said.

The company currently operates a 75-megawatt unit at Dunkirk under an electrical reliability agreement that expires at the end of the year. Three other units are already mothballed. As of Jan. 1, 2016, Dunkirk’s remaining unit will also be “on mothballed status,” Gaier said. “We’ll have to start reducing the head count at Dunkirk as well,” he said.

The Dunkirk plant employs about 60 workers.

“Entergy’s litigation is all about getting rid of competition so they can keep prices high and make enormous profits,” said State Sen. Catharine M. Young, R-Olean. “As a result, consumers and our economy will suffer.

“We need NRG Dunkirk repowered and operating for electricity supply reliability and to alleviate congestion on the grid,” she said. “Western New York needs power generation to secure our economic future.”