Updated February 11, 2016
In 2013, NRG participated in a competitive process with local utility National Grid, ordered by the NY Public Service Commission (PSC), to determine whether transmission or generation would be the best solution to an identified electrical system reliability need in Western New York. In December of 2013, the PSC selected the NRG Dunkirk natural gas repowering project as the best solution to the need. In June of 2014 after an extensive analysis, the PSC approved the terms of a contract between NRG and National Grid for the project.
As we continue to enhance our generating stations, NRG and our Dunkirk employees have committed considerable time and resources to advance this natural gas project at the Dunkirk plant. However, as NRG was moving the project forward, in February 2015 Entergy Corporation (Entergy) sued the PSC in Federal Court in New York, alleging that its approval of the Dunkirk contract was improper. Currently, we expect that the Entergy lawsuit will go to trial and litigation could take several years to resolve. Unfortunately, the Entergy lawsuit has created too much uncertainty to advance the Dunkirk project at this time and the project remains on hold. On January first of this year, NRG was also forced to mothball the last working unit at the station when the Reliability Support Services (RSS) agreement with National Grid, approved in advance by the PSC, expired.
These are actions NRG hasn’t taken lightly or easily. The electricity business has undergone a fundamental change in a very short time, mostly caused by the historically low price of natural gas and a corresponding massive drop in the price of electricity. No one in the industry anticipated the magnitude of this development. In fact, as recently as 2010, NRG invested more than $200 million to install state-of-the art environmental controls at Dunkirk in anticipation of continued operation for many years to come.
In a continuing effort to find ways to keep the station viable, in December of last year NRG submitted a Dunkirk proposal to the NY State Public Policy Process. Under this process, the New York Independent System Operator (NYISO) solicited both transmission and non-transmission projects for the Public Policy Requirement identified by the NY Public Service Commission (PSC). The next step is for the NYISO to evaluate the proposed projects including Dunkirk, to determine if they’re viable and sufficient to meet the needs identified by the PSC. Our understanding is that NYISO will present its recommendations to stakeholders and the PSC in mid-2016, and we look forward to those recommendations.
NRG’s pursuit of the Dunkirk project remains steadfast, we’re actively defending against the Entergy lawsuit, and we’re seeking solutions to make the project a success.
* * *
For a revised fact sheet on the Dunkirk repowering project, click here.