Plug pulled on $500M HV power plant project

Danskammer Energy, LLC has confirmed to the Business Journal and notified the New York State Department of Environmental Conservation (DEC) that it is withdrawing its application to construct a new natural gas fired combined cycle power generation facility at the Danskammer Energy Center in the Town of Newburgh. The project had an estimated cost of $500 million.

Thomas M. Gray, president and CFO of the company, confirmed the withdrawal of the Title V air permit application for the Danskammer Energy Center.

“The proposed repowering efforts will not move forward,” Gray told the Business Journal. “Danskammer’s existing operations will continue as usual, serving as a reliability peaking resource serving New York state.”

Attorneys Patricia D. Naughton and Brenda C. Colella, who represent Danskammer, in a letter dated June 17 that was emailed to DEC Administrative Law Judge Michael S. Caruso, said that Danskammer was withdrawing its application for a Title V permit and was separately withdrawing its application that was filed under Article 10 of the state’s Public Service Law.

The DEC in 2021 had denied an air quality permit for the project and Danskammer had been challenging the rejection. In June of last year, it asked the DEC to pause the proceedings for one year and the DEC agreed to do so.

The original Danskammer Point generating facility burned coal to produce steam to turn electric generators. The plant changed hands several times over the years and was converted to burn natural gas with oil as a backup. In recent years it served as a peaker plant, operating only when there was a very high demand for electricity.

Danskammer Energy LCC had wanted to build a new facility alongside the existing plant that could generate 536 megawatts of electricity. A megawatt is one million watts of electricity. Danskammer said the new plant would result in 450 construction jobs and produce $50 million in new tax revenue for local governments and schools in the next 15 to 20 years. The company said the upgraded power plant would have lowered electricity bills for customers in the Hudson Valley by $50 million a year.

Scenic Hudson was among the Hudson Valley environmental groups that had opposed the new plant. It said that at a time when New York is committed to combating climate change; this plant will accelerate it and that renewable sources of supply can meet projected demand.