Published: July 16, 2008 09:47 pm            

TOWN OF TONAWANDA: NYPA scraps Huntley project

After 18 months of work, costs still not low enough to make the plant competitive

After a year and a half of work from state agencies and NRG Energy, the proposed clean coal plant at the Huntley Station has gone up in smoke.

The New York Power Authority, which entered into a memorandum of understanding with NRG in January 2007 to purchase power from the new plant if costs could be reduced, pulled its support from the project Wednesday. Despite dedicated work on both sides, the cost of the carbon sequestration technology to substantially reduce emissions resulted in too large a price gap to make the energy produced affordable, said NYPA spokeswoman Christine Pritchard.

“The economic, technical and regulatory obstacles are too great to warrant further efforts at this time,” Pritchard said.

Town Supervisor Anthony Caruana said while the more than $400 million price gap was something Caruana knew about, he said he still thought the project was making progress.

The plant was officially granted a conditional award of a power-purchase agreement in December 2006 for the $1 billion plant under then-Gov. George Pataki’s Clean Coal Initiative.

According to a memo between NYPA President and CEO Timothy Carey and the trustees, Somerset’s AES Corp. and NRG proposals were the top-rated among all of the bids. Both companies were invited again to present their final offers and show their projects, and the board deemed NRG’s plan the “highest evaluated proposal” of all of the bids because it would have the highest efficiency, lowest emissions, minimal water use and a plan for addressing community concerns.

But after 18 months of back and forth, the $430 million gap couldn’t be resolved before the July deadline, even with millions in NYPA grants and Empire Zone tax credits and refunds.

Sen. George Maziarz, R-Newfane, said he was hopeful that the project would work despite his support of AES Somerset’s bid to build the clean coal facility. Now that the NRG project has been scrapped, Maziarz said he’s hopeful the governor and NYPA will take another look at AES to keep the jobs in the area.

“As I said 18 months ago, Western New York needs the jobs and the massive investment this project entails,” Maziarz said.

Jon Reimann of AES Somerset said the plant would be very interested in the clean coal plant project. AES submitted a bid for the project in October 2006, but lost to the NRG proposal. Reimann said AES still believes it has a good site for a clean coal plant and offers affordable energy.

“We continue to stand behind our bid,” he said. “We have had no contact with the Power Authority, but if NYPA were to ask, we would certainly be interested.”

        

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