The owner of the Cayuga power plant near Ithaca last week filed its second revised proposal to repower the 312-MW facility from coal to natural gas (12-E-0577).

Cayuga Operating Co. had previously sought to mothball the facility in 2012, but the New York Public Service Commission determined the plant was needed to maintain system reliability. The company also has a reliability support services agreement from 2013 with New York State Electric and Gas that runs through June 2017.

Cayuga filed its first repowering proposal in February 2015 after negotiations with NYSEG failed to produce a joint agreement. NYSEG has maintained that a transmission alternative is less costly.

Under the new proposal, Cayuga would have NYSEG contribute $49.5 million toward the plant construction and another $96 million over the next 10 years.

The deal faces opposition from locals and environmentalists, as well as the authors of an economic analysis.

“Not only does a ratepayer-subsidized repowering of the Cayuga plant fail to address long-term reliability or economic development needs, it also would be antithetical to New York State and the commission’s ambitious and groundbreaking effort, Reforming the Energy Vision of New York,” Earthjustice told the PSC.

“If Cayuga’s revised repowering proposal is approved, by the 2027 end of the 10-year repowering period, NYSEG customers will have paid more than $265 million to keep the plant operational. There also is a serious risk that ratepayers will be called upon to provide continued subsidies to the facility even after the 10-year term of the proposal ends,” said the Institute for Energy Economics and Financial Analysis in its report.

Entergy has also filed protests in the Cayuga proceeding, using the same arguments it made against the Dunkirk project, saying subsidized payments interfered with FERC’s jurisdiction over the wholesale market.

— William Opalka