|
|
|
|
|
Irony: Generators Say NRG Long-Term Repowering Contract With NY Utility Distorting Capacity Market
The Independent Power Producers of New York have amended their pending complaint at FERC alleging impermissible price suppression from purported buyer-side market power in the New York ISO capacity market.
The Reason?
NRG Energy's contract with National Grid to repower NRG's Dunkirk generation station, under which captive ratepayers would fund the repowering.
Story Continues Below...
ADVERTISEMENT NRG has fervently been arguing for a Texas capacity market as the mechanism to get new capacity built, not long-term contracts with regulated utilities with captive customers.
"The new development prompting this amendment is a recently executed term sheet (the 'Term Sheet') between Niagara Mohawk Power Corporation d/b/a National Grid ('National Grid') and Dunkirk Power, LLC ('Dunkirk') that contemplates over $215 million in out-of-market payments to Dunkirk for repowering the otherwise uneconomic coal-fired Units 2, 3 and 4 at the Dunkirk Generating Station ('Dunkirk 2-4') by adding natural gas-fired capability and making the energy and capacity from those units available for 10 years thereafter," IPPNY said.
According to IPPNY, "[u]nder the Term Sheet, as filed with the NYPSC in February, National Grid and Dunkirk are to enter into a definitive agreement (the 'DNG Agreement') pursuant to which Dunkirk will repower Dunkirk 2-4 in exchange for annual payments of $20,410,000 from National Grid over a 10-year term, commencing on the commercial operation date of the first gas addition, which is anticipated to occur on September 1, 2015.26 In addition to these payments, the Term Sheet also indicates that Dunkirk is to receive $15 million in 'assistance' from an 'appropriate agency' to make its units available."
IPPNY says that, "Dunkirk had sought to mothball all three of these units – and had mothballed two of them (Units 3 and 4) – because market revenues were insufficient to cover their costs. These units are only going to remain in – and Units 3 and 4 are only going to re-enter – the market as a result of the out-of-market payments that Dunkirk will receive under the DNG Agreement."
Although in stark contrast to the market design espoused in Texas, the fact that NRG would use ratepayer-backed contracts used to repower Dunkirk are hardly surprising, since NRG Energy CEO David Crane himself said last summer that merchant generation development was "nearly impossible" in any market, even those without capacity markets, and that "state sponsored long-term off-take agreement[s]" (ratepayer backed) are needed for new build, which begged the question of why Texas would want to implement a capacity market if it's even acknowledged by supporters as failing to do its job in other markets (click here for prior story)
ADVERTISEMENT Search for more retail energy careers: Copyright 2010-
March 26, 2014
Email This Story
Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
Comment on this story at RetailEnergyX.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Analyst, Trading and Supply Operations -- Retail Supplier -- Houston
• NEW! -- Analyst - Energy & Operations -- Retail Supplier -- New York
• NEW! -- Vice President Risk Management -- Retail Supplier -- New York
• NEW! -- Business Development Manager, Broker Sales -- Retail Provider -- Houston
• NEW! -- Manager, Channel Sales -- Retail Provider
• Regional Sales Manager, Texas -- Retail Supplier -- Houston
• Regional Sales Manager -- Retail Provider -- PA, NY, IL, Various
• Operations Specialist – Market Transactions -- Houston
RetailEnergyJobs.com
|
|
|
|