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Is Danskammer plant the replacement for Indian Point?

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Danskammer Indian Point
A view of the Danskammer plant on the Hudson River in the town of Newburgh.

A proposed $500 million project in the Hudson Valley, which its promoter says will produce approximately 450 construction jobs, 30 long-term jobs and an average of $2.5 million a year in local taxes, is facing increasing opposition.

The project is intended to expand and modernize the Danskammer Generation Station, a power plant on the west bank of the Hudson River in the town of Newburgh. Built in the 1950s by Central Hudson Gas & Electric, the power plant originally burned coal to heat water and turn it into steam for turning the generators that created electricity. Over the years, it was converted to burn gas and fuel oil and changed hands a few times.

The current owner, Danskammer Energy LLC, wants to create the Danskammer Energy Center, modernizing the plant to be more efficient, less polluting and virtually eliminate the use of water from the Hudson River.

To go ahead with the project, the company needs New York state to approve a Certificate of Environmental Compatibility and Public Need as provided in Article 10 of the state’s Public Service Law.

“We hope to finish all the permit reviews by the end of December of this year,” William Reid, CEO of Danskammer Energy, told the Business Journal.

He has a long career in the energy field and is a son of former U.S. Rep. Ogden Reid, who also served as U.S. ambassador to Israel and died earlier this year at his Westchester home.

In 2017, the private equity firm Tiger Infrastructure Partners joined with Agate Power, an independent power company of which Reid was a principal and founder, to acquire Danskammer Energy LLC from the Mercuria Energy Group. While under a previous owner, the plant had been closed after being substantially damaged during Superstorm Sandy in 2012. In 2014, it was reopened and operated as a so-called “peaker plant,” generating electricity on an as-needed basis to supply the grid at times of peak demand.

Reid said after accepting the Article 10 filing as complete, the state Department of Public Service and the Board on Electric Generation Siting and the Environment would have 12 months to decide whether or not they approve of the project.

START CONSTRUCTION
“Hopefully they will approve because of the dramatic improvements we’ll bring to the grid and to the economics of the state. If so, we would start construction in the first quarter of 2021,” he said.

The existing facility would continue generating electricity as needed during the construction period, which is expected to be 2 1/2 years. The new facility could operate to feed the grid on a full-time basis.

Reid said Danskammer Energy has held more than 100 meetings with elected officials, community leaders and business groups to explain the construction and operation plans along with its studies of the impacts on emissions, traffic, the Hudson River and more. “Anyone who has taken the time to sit down across the table from us and hear the numbers and listen to the dramatic improvement that the plan will bring has been in favor and thought it made sense. It is those who haven’t taken the time to sit with us, so that we can explain what actually is coming, is where a lot of the misinformation and confusion about the project comes from,” he said.

Joining the opposition to the project on Oct. 15 was the city of Newburgh, just a few miles from where the power plant is located. The city council passed a resolution opposing construction of the new energy center. The council expressed concern that the plant would use natural gas obtained by fracking, which is the injection of fluids into subterranean rock layers to force the gas to the surface. The Newburgh action was in contrast to what had been done by the Orange County Legislature, which on Oct. 3 voted 12-7 to support the project.

The city of Beacon, just across the Hudson, had previously come out against the project, joining Cold Spring and Philipstown.

In Westchester, the Peekskill Common Council at its Oct. 15 meeting passed a resolution calling on the state to reject the proposal. On Oct. 7, a group of environmentalists opposed to the project rallied outside of a fundraiser held in Yonkers for Gov. Andrew M. Cuomo, hoping to attract his attention. Organizations such as the Hudson River Sloop Clearwater have come out against the proposal.

REPUBLICAN CONTRIBUTOR
Some critics of the power plant plan have brought politics into the mix by pointing out that the CEO and managing partner of owner Tiger Infrastructure Partners, Emil W. Henry Jr., has been a major contributor to Republican campaigns and served as an economic advisor to Mitt Romney’s presidential campaign. In 2005, he was appointed by President George W. Bush as Assistant Secretary of the Treasury. He served for two years. Tiger Infrastructure Partners focuses its investments in North America and Europe in energy, transportation, communications and related fields.

While critics contend that upgrading the plant would be counter to the objective of moving electricity generation away from burning fossil fuels, Reid points out that a new energy center would help reduce current levels of emissions, adding to the more than 50% reduction already achieved by the power-generating industry in the Northeast.

“We think there’s another dramatic step down that’s possible. The industry represents about 15% or 16% of carbon emissions in the state. We’re in fourth place after cars and industry and agriculture. We think it could be 5% and, therefore, a very, very small part of the issue. But to do that we have to use not 1950s technology. We need to use 2020 and 2025 technology,” he said.

Reid said with the current technology in use at the plant, “It takes 11 or 12 hours to warm up before we can generate electricity and we’re about twice as expensive as a more modern plant.”

He said the new plant would be able to be turned on to start generating electricity in a matter of minutes.

Emissions studies, which will be made public when the official Article 10 application is filed in December are expected to show that replacing the old plant will reduce regional carbon dioxide emissions by about 280,000 tons annually, the equivalent of taking 54,000 cars off the road. The studies also are expected to show dramatic reductions in nitrogen oxide and sulfur dioxide emissions.

SOLAR AND WIND
When measured on a megawatt-hour basis, a million watts of electricity generated for one hour, the new plant would produce power with a 40% to 50% reduction in emissions, the company says. It also emphasizes that solar and wind cannot be counted on for continuous generation of electricity. The new plant would be able to generate about 550 megawatts, capable of powering about 500,000 homes.

Reid said the coming shutdown of the Indian Point nuclear power plant is in itself a good reason for moving forward with the project, because the zone of the grid “around Indian Point will be trying to get electricity from upstate New York, from Pennsylvania, West Virginia, wherever it can. The problem with that is it will be more expensive or it may be coal-fired. As it is, about 40% of what comes out of Pennsylvania comes from coal-fired plants,” he said.

Reid, a native of Purchase, told the Business Journal, “Historically, a lot of the power that was generated around Newburgh and Indian Point has found its way south and supported growth in Westchester and growth in (New York) city. We hope to continue doing that. This plant will save New York state taxpayers and consumers over $60 million a year because of the impact of cheaper electricity.”

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1 COMMENT

  1. So let me get this straight, Cuomo and the Democrats don’t know where the replacement electricity will come from when they close Indian Point? And when he does close it, electricity prices will do through the roof?

    And since NY will no longer generate its own electricity, it will be forced to buy expensive coal generated electricity from PA and WV?

    Cuomo really has turned NY into a hellhole if he thinks this is good governance.

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