A new report on the coal-fired Huntley Station power plant in the Town of Tonawanda, while reflecting the bias of its anti-coal authors, should still be must reading in Erie County.
The report, commissioned by the Clean Air Coalition of Western New York and prepared by an Ohio energy consulting firm set on reducing the nation’s dependence on coal-generated electricity, paints a dim future for the power plant, owned by New Jersey-based NRG Energy.
Perhaps the company should seek out another study, this one by the more industry-friendly American Coalition for Clean Coal Electricity or Edison Electric Institute. It would be easier, though, to just take a look at the Somerset coal-fired plant in Barker, which fell into bankruptcy in late 2011 and was taken over by its bondholders.
According to the Ohio consultants, the Huntley plant is losing money and is at risk of being shut down. That alone should send shudders up and down the spines of officials in the town, school district and county. After all, they depend on the power plant for $6 million a year in tax revenue. Half of that goes to the Kenmore-Tonawanda School District, amounting to 3 percent of its budget. Ken-Ton Superintendent Mark Mondanaro said the loss of revenue if the plant shuts down would make things tougher in an already difficult financial environment.
The Institute for Energy Economics and Financial Analysis in Cleveland estimated that the Huntley plant has lost money during three of the past five years, and those losses are likely to widen in the future as coal prices rise and natural gas prices remain low.
It’s hard to ignore the pressure being put on the plant from renewable power sources and from capacity being added locally generated by natural gas. That includes a coal-fired plant in Dunkirk owned by NRG that is being converted into a 360-megawatt gas-fired plant.
State officials turned down a proposal to convert the Huntley plant to run on natural gas.
To top it off, the Huntley plant is running at only about a quarter of its capacity, according to the report. None of this engenders deep faith about its future and the jobs of its 85 workers.
The report indicates million-dollar losses at the Huntley plant in both 2011 and 2012, and that’s without including such costs as property tax payments and interest expenses. The losses are predicted to grow over time.
Working in the plant’s favor is the fact that NRG has spent $150 million to reduce emissions from the plant. The company would not want to walk away from that investment.
While NRG weighs its options, the local entities that have become dependent upon the plant must prepare for the financial shock of life without it.