Sierra Club Files Request for Accounting with PSC #Electricity #Coal #Insolvency

On November 1st, the Sierra Club and Ratepayers and Community Intervenors filed a Request for Accounting with the New York Public Service Commission (PSC) to shed light on ongoing and anticipated ratepayer subsidies for the Cayuga coal-fired power plant. The plant has received approximately $4 million a month from ratepayers since January 2013, including $42 million in facility upgrades, resulting from claims that the plant was uneconomical to operate but necessary for local electric reliability. Despite the plant’s purported continuing insolvency, it was recently purchased by a subsidiary of the Blackstone Group, which claims that it intends to continue operating the plant after 2017 when transmission upgrades fully resolve local reliability needs and ratepayer subsidies end. However, ratepayers lack critical information about whether the plant’s longer-term operations are being enabled by upgrades ratepayers are unwittingly underwriting and, if not, why the plant continues to receive $40 million a year in subsidies.“The public deserves to know exactly what is going on at the plant. New York’s electric customers have a right to know if they are paying for upgrades that are truly necessary to keep the plant operating until 2017,” Lisa Dix Senior New York Representative for the Sierra Club said. “We don’t know what our money is paying for and whether continued subsidies are truly needed. Without this information, we simply cannot know if we are getting a fair deal; if not, we need to get our money back.”

The plant faces several potentially costly long-term environmental upgrades, and recently experienced two major fires that took entire coal-burning units offline for months at a time. Despite their role in bankrolling the plant, New York electric customers currently have no ability to determine whether they are on the hook to pay for these environmental upgrades, or for the repairs undertaken to bring the units online again after the fires.

The fires are cause for particular concern, because despite half of the plant being non-operational during the months that followed each fire, electric customers were still obligated to pay the full $4 million per month of the reliability contract. Worryingly, public reports do not indicate the extent of the damage caused by either fire, to what extent additional expenditures were incurred as a result of the fires, and to what extent electric customers are now having to pay to fix the damage from the fire.

The Sierra Club and Ratepayer and Community Intervenors are calling on the PSC to examine what seems to be a troubling contradiction: if Blackstone can claim that they need $4 million a month to keep the uneconomic plant open today, how can the plant then be profitable on its own when the subsidies end in 2017?

“The PSC must investigate the economic viability of the Cayuga coal plant and must seriously reassess the subsidy the plant is receiving from the pockets of hard working New Yorkers, especially if, as the new owners argue, the plant will be economical and could survive without subsidies,” Irene Weiser on behalf of Ratepayers and Community Intervenors said. “Governor Cuomo committed to transitioning the state away from coal-fired power to renewable energy by 2020, but Blackstone doesn’t seem to think the State’s coal phase out commitment includes them. The PSC needs to take a hard look at this dirty, old and obsolete coal plant before one more dime of ratepayer dollars continues to prop up this polluting plant now and in the future.”