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Judge Okays New York Natural Gas Power Plant Tests

October 4, 2018

A New York county Supreme Court justice has ruled Competitive Power Ventures can resume startup tests at its new natural gas power plant in Wawayanda, New York.

Against the wishes of New York Gov. Andrew Cuomo and the Department of Environmental Conservation (DEC) he controls, a county Supreme Court justice has ruled Competitive Power Ventures (CPV) can resume startup tests at its new, state-of-the-art, natural gas power plant in Wawayanda, New York, 53 miles north of New York City.

Albany County Acting Supreme Court Justice Roger McDonough’s August 15 decision came two weeks after New York’s DEC informed CPV the plant’s original state-issued air permit had expired July 31, requiring the facility, known as the Valley Energy Center, to obtain a Clean Air Act Title V permit from the U.S. Environmental Protection Agency (EPA) in order to operate. DEC threatened to impose an initial fine of $18,000 plus as much as $15,000 a day if the plant commenced operations without the permit.

Obtaining a Title V permit from EPA would cause a considerable delay in the project, because the agency’s application process is complicated and includes a mandatory 45-day review by EPA air officials.

Maryland-based CPV sued DEC on August 14, arguing the department had engaged in delaying tactics that caused the plant to miss the deadline to begin operating under the state permit. CPV sought and quickly won an injunction from McDonough allowing it to operate the plant while awaiting the resolution of the permit dispute.

Governor’s Fracking Ban

The Valley Energy Center, a $956 million, 630 megawatt power plant, will use natural gas from Millennium Pipeline’s 7.8-mile Valley Lateral Pipeline carrying natural gas from the Marcellus Shale in neighboring Pennsylvania.

The energy-rich Marcellus Shale extends into New York’s Southern Tier, the counties west of the Catskill Mountains along the northern border of Pennsylvania. A fracking ban Cuomo imposed in December 2014 prevents property owners in New York state from developing shale gas reserves on their land.

As a result, despite the presence of abundant natural gas in the Southern Tier, the gas supplying the Valley Energy Center’s New York customers with electricity will come from out of state.

Competing Views of Outcome

The DEC issued a public statement expressing confidence the department would ultimately be vindicated.

“While DEC is disappointed, the order’s expedited briefing process will provide us an opportunity to vigorously litigate this issue and get a ruling on the merits as to whether CPV can continue to operate without a Title V permit,” DEC said in a statement responding to the Court’s ruling. “DEC is confident we will prevail in this matter and that CPV will need to apply for and obtain a Title V permit to continue to operate.”

Tom Rumsey, CPV’s vice president of external affairs, say he is equally confident his side will win.

“We are gratified by the court’s decision and look forward to restarting the commissioning process as soon as possible,” Rumsey said in a statement. “We look forward to working with NYDEC in a productive manner as we work through remaining steps to become fully operational.”

The company doesn’t deny it will need a Title V permit, but it argued in court it believed it had an understanding with DEC it had up to a year after beginning full-scale operation of the plant to apply for the permit.

The plant’s originally scheduled plans to begin commercial operation in February 2018 had to be put on hold when DEC was late in approving the Valley Lateral Pipeline. Further delays arose because the Federal Energy Regulatory Commission took more than three years to approve CPV’s pipeline application.

NY Betting on Renewables

In an effort to boost renewable energy at the expense of fossil fuels, the Cuomo administration set a goal of 50 percent renewable energy by 2030 and loosened state environmental standards to achieve that objective.

As part of that effort, the New York State Energy Research and Development Authority recently issued guidance for municipalities developing solar projects on landfills and brownfields that follows a June DEC rulemaking determining contractors are not required to make formal environmental impact assessments for solar projects on brownfields.

‘Misguided Energy Policies’

New York’s bias against fossil fuels is costing the state’s residents and businesses plenty, says James Taylor, a senior fellow at The Heartland Institute, which publishes Environment & Climate News.

“New York is missing out on an outstanding opportunity to benefit consumers and the state’s economy,” said Taylor. “A power plant using low-cost natural gas produced in New York state would provide multiple layers of economic benefits.

“However, even if the natural gas comes from Pennsylvania, with Pennsylvanians benefitting from the production of that gas, New York consumers will still receive low-cost electricity from the new power plant,” Taylor said. “By contrast, the wind and solar power favored by Gov. Cuomo require consumers to spend much more on electricity bills than would otherwise be the case, an expense coming out of consumers’ budgets for affordable housing, nutrition, health care, better education, and goods and services that enhance people’s quality of life.”

Karen Moreau, executive director of the New York State Petroleum Council, says allowing the Valley Energy Center to operate will help the poorest New Yorkers.

“With the court’s decision, New York’s consumers—including low-income families and seniors—are a step closer to overcoming Gov. Cuomo’s misguided energy policies,” Moreau said. “CVP’s power plant will deliver much-needed supplies of additional affordable electricity to New York, powered by clean natural gas.

“In a state with some of the highest electricity costs in the nation, this is welcome news,” said Moreau.

Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org