If the Market becomes too unstable to preform this vital service to society, too corrupt, then government should step in. Here is an old solution. The solution is for NY to build and operate their own power plants.
Put this together with FERC going after the NEISO over the fairness our electric rates.
The system is set up where these guys either collude or sabotage each other, often both at the same...is this called the free market and deregulation serving the greater ends of our nation and society??? Who is it serving?
Cuomo targets power plant that closed after $110M subsidy by National Grid customers
By Tim Knauss | tknauss@syracuse.com
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on February 13, 2016 at 8:50 AM, updated February 13, 2016 at 9:44 AM
SYRACUSE, N.Y. – Gov. Andrew Cuomo has gone to war with the owner of a Western New York power plant that closed in January after National Grid customers paid more than $110 million in surcharges to keep the plant open since 2012.
Cuomo this week ordered the state Public Service
Commission to investigate NRG Energy's decision to close Dunkirk Power Plant near Buffalo and whether "consumers of the state of New York have been defrauded."
NRG mothballed the coal-fired plant last month, abandoning a plan championed by the governor to convert the plant to burn natural gas.
Cuomo wants the PSC to determine "whether NRG should be allowed to continue to operate as an electric corporation in the state,'' according to a letter from the governor to PSC Chair Audrey Zibelman. (See letter below.)
NRG officials say they fulfilled their agreement to keep Dunkirk open while transmission improvements were made to the regional power grid. That agreement ended in December.
NRG backed away from its plan to convert Dunkirk to natural gas largely because of a federal lawsuit filed by Entergy Corp., said David Gaier, speaking for NRG. Entergy, another company that has butted heads with Cuomo, filed a lawsuit last year claiming that a ratepayer-subsidized conversion of the Dunkirk plant would be illegal and discriminatory.
"The Entergy lawsuit created a tremendous amount of uncertainty and risk for NRG in moving forward with the Dunkirk project.'' Gaier wrote in an email. "Under these circumstances, NRG cannot prudently continue to invest tens of millions of dollars while this lawsuit remains unresolved.''
NRG Energy is the nation's largest owner of merchant power plants, with $16 billion in annual revenues and 51,000 megawatts of generating capacity. NRG owns five other power plants in New York besides Dunkirk, including the 1,628-megawatt Oswego generating station, which seldom runs.
Why National Grid customers paid a subsidy
NRG first notified state officials in March 2012 that they intended to close the Dunkirk power plant, which can make a maximum of 635 megawatts. But the Public Service Commission determined that some power from Dunkirk was necessary to keep the power grid stable.
The commission approved a "reliability service agreement'' under which National Grid customers paid a surcharge to subsidize the plant to keep two of its four generating units available. That agreement was later amended to keep just one unit open. The amended contract was extended once, finally ending in December 2015.
Cuomo said reliability payments totaled more than $110 million since 2012. The surcharges were paid by customers throughout National Grid's Upstate territory, including Central New York. Utility officials could not immediately estimate the impact on a typical residential customer.
Separately, Cuomo announced in December 2013 that he had made a deal with NRG to convert the Dunkirk plant to burn natural gas. The Public Service Commission later approved a "repowering agreement'' under which National Grid customers would pay $20.4 million a year for 10 years to subsidize the conversion. Those payments never began because NRG decided to mothball the plant instead.
Cuomo's wrath at NRG appears to stem from the company's decision to back away from the repowering, which was hailed as a "Christmas miracle'' when the governor announced it three years ago. The conversion would have preserved Dunkirk's ability to retain its employees and pay $8 million a year in local property taxes, Cuomo said at the time.
Nuclear plant owner sues
Entergy Corp., the owner of FitzPatrick nuclear plant in Oswego County, sued the Public Service Commission last year in federal court, alleging that the subsidized repowering plan illegally interfered with the state's wholesale energy market.
Unrelated to the Dunkirk case, Cuomo has dueled with Entergy over the pending shutdown of FitzPatrick, which is due to close by early 2017. The governor said the decision to close the plant showed "callous disregard'' for its 600 employees, and he vowed to pursue "every legal and regulatory avenue'' to keep FitzPatrick open.
At the same time, Cuomo has lambasted Entergy's operation of the downstate Indian Point nuclear reactors, which he wants to close because they are too close to New York City.
The uncertainty created by Entergy's lawsuit led NRG to mothball the Dunkirk plant rather than convert it, Gaier said. In the meantime, National Grid has completed a major upgrade to its Western New York transmission system that made it possible to operate without Dunkirk, said Stephen Brady, speaking for the utility.
Cuomo maintains that NRG should have pursued the repowering of Dunkirk, which was originally expected to be done by September 2015.
Cuomo this week directed the PSC to investigate why NRG did not repower Dunkirk and how much that decision cost Upstate consumers. He also wants an investigation into whether NRG should be banned from operating in the state.
"NRG stands behind everything we've done to support the grid and provide ratepayers in New York with reliable power under agreements at the price approved by the state in advance,'' Gaier said. "We look forward to working with the governor and the Public Service Commission to resolve these issues to everyone's satisfaction.''
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