Municipal Leaders Express Concern about State Importation of Electricity, Job Losses after Proposed Closure of Huntley
Officials Raise Pointed Questions to NYS Public Service Commission
ERIE COUNTY, NY – December 22, 2015 – (RealEstateRama) — Local officials from Erie County, the Town of Tonawanda, the Kenmore-Tonawanda Union Free School District, and the Erie County Industrial Development Agency (“ECIDA”) gathered today to discuss their efforts concerning the potential closure of the Huntley Generating Station (“Huntley”) in the Town of Tonawanda. In August 2015 Huntley owner-operator NRG Energy announced that on March 1, 2016, the Princeton, NJ-based company would shutter the plant, resulting in the layoff of approximately 70 employees and the likely loss of revenue to local taxing jurisdictions of over $6 million annually. Officials co-authored a letter to the New York Public Service Commission (“PSC”), the state regulator of utilities, framing a series of questions and concerns regarding NRG’s action and a related decision by the New York Independent System Operator (“ISO”) allowing NRG to close Huntley.
“I am bothered by the ISO decision,” said Erie County Executive Mark C. Poloncarz. “The ISO appears to be acknowledging that Huntley’s power is actually needed for reliability of the grid by recommending and acknowledging that after the closure, the state will need to import power from Canada and Pennsylvania. This is wrong and the PSC should consider the totality of its action, including the potential to re-power the plant using alternative fuels, before allowing NRG to close the plant and lay off its employees.”
On October 30, 2015, the ISO informed the PSC that NRG could be permitted to close Huntley, stating that “reliability power” generated for the state electrical grid at Huntley was no longer needed. Local officials question this decision, however, as the ISO action recommending closure of Huntley is premised on the importation of electricity from a coal-fired power plant in Pennsylvania (also operated by NRG) and from Ontario. Another area of concern is the potential re-use or re-powering of Huntley, which must be explored under state law prior to a plant closing but has not occurred in this case; potential options for re-powering could include using natural gas or biomass as a fuel source for generation. The International Brotherhood of Electrical Workers (“IBEW”), which represents Huntley employees, also points to the upgraded transmission lines necessary to carry imported out-of-state electricity as a significant expense.
Poloncarz was joined by Town of Tonawanda Supervisor Anthony Caruana and Supervisor-elect Joseph Emminger, Superintendent of the Kenmore Tonawanda Union Free School District Dawn Mirand, ECIDA Vice President John Cappellino, and representatives of the IBEW at the Friday event. The four local governments have been collaborating for over three years to address the future of Huntley and the potential for the closure or reduction in generation at the plant – which would create immediate budgetary issues, job losses, and longer-term concerns for the community. NYS Senator Marc Panepinto (60th District) and NYS Assemblyman Robin Schimminger (140th District) have expressed their support for the local efforts concerning Huntley.
Officials also sent copies of the letter to state officials at the New York Power Authority (“NYPA”) and Empire State Development Corporation to begin a dialogue on the prospects for NYPA becoming involved at Huntley.
Town of Tonawanda Supervisor Anthony Caruana said, “Given the issues associated with transmitting electricity from central New York to downstate, it seems that a discussion with the power authority on retaining Huntley or re-powering Huntley with an alternative fuel may be appropriate.”
For a number of years, Huntley has operated off of the tax rolls and under a payment-in-lieu-of-taxes (“PILOT”) agreement with the ECIDA. Under the PILOT, the Kenmore Tonawanda Union Free School District is slated to receive $3 million in revenue, the Town of Tonawanda, $2.2 million and Erie County just under $800,000. That revenue would likely be lost or severely reduced if Huntley is closed.
Kenmore Tonawanda Union Free School District Superintendent Dawn Mirand stated, “We are concerned about the impact of the potential closure on the school district, due to the loss of revenue. The Ken-Ton school district has already taken dramatic steps to reduce costs, close school buildings, and adjust staffing, and the closure of Huntley without a supplemental source of revenue would be financially devastating to the district, its students and its residents.”
Officials expressed further concern about the future of the Huntley property, which is adjacent to the Niagara River and has a number of environmental and hazardous issues that would need to be addressed. The ECIDA works closely with the Erie County Department of Environment and Planning to repurpose brownfields across Erie County and transform them into viable business centers such as recently-opened North Youngmann Commerce Center in Tonawanda and is aware of the issues at the Huntley site.
ECIDA Executive Vice-President John Cappellino said, “We need to consider the long-term environmental and planning consequences of a large brownfield site like Huntley lying dormant along the Niagara River and continue to work diligently and proactively to address this site.”
Another potential funding option being explored is a new state pool of $19 million made available via state legislation in June 2015 to local governments that lose revenue when a power generating facility closes. However, that pool is also being investigated by other communities facing similar closures. Local officials have met with members of the WNY delegation including Senator Panepinto and Assemblyman Schimminger, who have pledged their support to research additional legislation and potential future funding over a longer term basis.
Click here to view the local officials’ letter to the PSC.
