Newburgh power plant to close

In the wake of its bankruptcy restructuring, Houston-based Dynegy Inc. is closing its coal-powered Danskammer Generating Station in Newburgh, laying off 68 employees.

Dynegy, which generates and sells electricity, sent out a Worker Adjustment and Retraining Notification (WARN) in mid-December announcing the closing of the coal-powered Danskammer set to occur on March 11. Danskammer was rendered inoperable in the wake of Hurricane Sandy, sustaining $3 million in damage to its basement. Adjacent Roseton Generating Station, a gas and oil plant, will continue operations.

Danskammer was a 493-megawatt plant while Roseton is a 1,200-MW plant. One MW is enough to power 800 homes.

During a bankruptcy auction, Dynegy sold Danskammer to ICS New York Holdings L.L.C. for $3.5 million and ICS assumption of liabilities. ICS plans on demolishing the plant and remediating the site.

Roseton was sold to Wilton, Conn.-based Louis Dreyfus Highbridge Energy L.L.C. (LDH Energy) for $19.5 million in cash and LDH paying for $24 million in outstanding tax liabilities to Orange County, the town of Newburgh and Marlboro school district in Ulster County. Dynegy owes $17 million to the Marlboro school district, which had threatened cutbacks and layoffs if the bill was not paid.

The sale of the plants was approved by Judge Cecelia Morris in Bankruptcy Court on Dec. 21, with Dynegy agreeing to pay its overdue tax bills at closing, which will occur within six months.

Employees at both sites returned to work Dec. 17 after a monthlong strike, with disagreements over pensions and retirement benefits. LDH plans to keep the Roseton employees.

Per the sale, the assessed value of the properties will be reduced by 50 percent in Newburgh, resulting in millions of dollars in losses for the taxing entities.

Dynegy is waiting for approvals from the New York Public Service Commission and the Federal Energy Regulatory Commission before officially retiring the plant. Danskammer has operating since 1951, while Roseton began operating in 1974.

On Nov. 7, 2011, Dynegy Holdings and four of its subsidiaries filed for Chapter 11 bankruptcy protection in the Southern District Court of New York in Poughkeepsie. The company, which was $4.2 billion in debt, blamed falling electric prices for the filing.

In July 2012, Dynegy Inc., the parent company, filed for Chapter 11. On Sept. 30, Dynegy Inc. and Dynegy Holdings merged, with Dynegy Inc. being the surviving entity. The company emerged from bankruptcy Oct. 1.

The four subsidiaries, which comprise Dynegy Northeast Subsidiaries ”“ which owned Danskammer and Roseton ”“ remain in bankruptcy.

At its 2001 peak, the company had 6,100 employees and $24.3 billion in assets, and now has 1,200 employees and $8.3 billion in assets. Its revenue has plunged to $1.6 billion in 2011 from $42 billion in 2001.

During a bankruptcy auction, Dynegy sold Danskammer to ICS New York Holdings L.L.C. for $3.5 million and ICS assumption of liabilities. ICS plans on demolishing the plant and remediating the site.