Sen. Charles E. Schumer threw his political weight behind NRG Energy’s $506 million plan to convert its coal-fired power plant in Dunkirk to natural gas, arguing Tuesday that it would be better for the environment and give a big boost to the Chautauqua County economy.
Schumer, appearing at an event on the Dunkirk waterfront, said converting the Dunkirk plant from coal to natural gas would be a better choice than the other option the State Public Service Commission is considering: a National Grid proposal to spend $63 million on five transmission system upgrade projects that the utility said would maintain reliability without the Dunkirk plant’s power.
“The repowering fix is clearly the most long-term, cost-effective solution for the City of Dunkirk and Chautauqua County,” Schumer said.
“Repowering to natural gas ensures the plant’s economic viability, is better for the environment, provides an efficient and cleaner form of energy, and protects the plant’s tax contribution” to local municipalities and school districts, said Schumer, D-N.Y.
While the transmission system upgrades are considerably less expensive than revamping the power plant, Schumer noted that National Grid has estimated the improvements the utility has proposed could cost upwards of $160 million, if final costs come in at the high end of the forecasted costs of the transmission project.
Critics of the transmission system upgrade also said it would force New York utilities to import more costly electricity generated by higher-polluting coal-fired plants in Pennsylvania and Ohio to make up for the loss of the Dunkirk plant’s generating capacity.
“Upgrading the transmission lines is simply an investment in dirty, out-of-state production and does not solve the underlying financial concerns that have put the NRG plant on the chopping block,” Schumer said.
Schumer also said the shutdown of the Dunkirk plant would have a devastating impact on the Chautauqua County economy by eliminating a key source of tax revenue. The NRG plant now provides about a quarter of the City of Dunkirk’s tax revenue, and Schumer warned that losing that tax money would lead to an estimated 47 percent increase in property taxes within the Dunkirk City School District and a 42 percent jump in Dunkirk’s city taxes.
Supporters of the Dunkirk plant’s conversion argue that the project would bring tremendous economic benefits to Chautauqua County, including hundreds of construction jobs and the survival of the 82 jobs that remain at its already scaled-back operations. An NRG Energy study this spring said the plant could create 3,000 to 3,500 jobs over a 10-year period, mainly through an anticipated reduction of wholesale electricity costs in Western New York of as much as 5 percent.
But a study issued in May by National Grid, which operates the electricity transmission system in the Dunkirk area, said it would be much cheaper – and better for customers in the long run – to let the Dunkirk plant close and invest in proposed upgrades to the region’s power grid.
The National Grid study forecasts far smaller job gains than NRG did. The utility’s study also predicted that, rather than lowering electricity costs as NRG forecasted, power prices would rise under all of the options under consideration, although the increase would be smallest with the transmission system upgrades, ranging from an increase of 0.5 percent for residential customers with the power grid improvements to 3.6 percent for the most costly natural gas conversion proposal.