NRG Considers Mothballing N.Y. Coal Plant on Concerns It Is “Uneconomic”

NRG Energy last week filed a notice of intent with the New York Public Service Commission (PSC) to mothball Units 1, 2, 3, and 4 of its 635-MW Dunkirk coal-fired power plant near Buffalo, N.Y., by September this year until market conditions improve.

The New Jersey-based company also asked the commission to waive the 180-day notice requirement to allow it to stop operations at the plant before the date filed in the notice.

Current and wholesale electric prices in Western New York that had been lowered by a nationwide natural gas glut aren’t enough to cover the underlying cost of operating the Dunkirk facility, the company said. "Thus, because the facility is not currently economic and is not expected to be economic, NRG intends to mothball the units until such time as market conditions improve," Bradley Kranz, NRG director of regulatory and market affairs, wrote.

“We don’t take this action lightly, but market conditions in Western New York made this decision necessary,” said Lee Davis, NRG’s regional president, in a statement. "During the reliability review period, we will seek an offtake contract with a counterparty that would keep as many units as possible running at the station, if it’s determined there’s a reliability need."

“This is really our avenue to preserve the facility, and not close it,” he added. “We’re extremely confident we’re going to be in that position.”

Dunkirk station’s Unit 1 and 2, each 100-MW units, have been running since 1950. The two other 217.6-MW units went into service in 1959 and 1960. The plant was known as the Niagara Mohawk Power Plant until its sale in the late 1990s.

NRG in 2009 completed a $275 million retrofit of air quality control systems at the Dunkirk station and a similar project at its nearby 400-MW Huntley Generating Station at Tonawanda, N.Y.

In January, AES Corp. subsidiary AES Eastern Energy, an entity that owns more than 1,000 MW of coal-fired capacity at six facilities in New York, filed for Chapter 11 bankruptcy protection, citing falling power prices and heightened costs from compliance with environmental regulations.

Sources: POWERnews, NRG, NYPSC