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Helios bids to restart Danskammer

April 2nd, 2014

The Danskammer Power Plant, left for dead just six months ago, is springing back to life with a vengeance.

Last Thursday, Helios Power Capital, purchaser of the decommissioned Danskammer plant from Dynegy this past October, received the go-ahead from the New York State Public Service Commission (PSC) to pursue permission to restart the plant.

Helios was given until yesterday to file additional documents with the PSC, which will then decide whether the restarting of Danskammer is in the best interests of the public. Whether Tuesday’s deadline was met or terms accepted by the PSC were unclear at press time.

The coal-fired Danskammer plant, considered one of the dirtiest in the country, had been crippled by 2012’s Superstorm Sandy, causing more than $3 million in damage and shuttering the plant.

Helios’ entry into the energy production business was not entirely unexpected. While Helios’ background is in demolition, it negotiated last-minute terms in its $3.5 million winning bid for the plant allowing for its eventual restart under acceptable conditions. U.S. Bankruptcy Court Judge Cecelia Morris approved the changes and the sale was concluded.

The switch in intentions by Helios was met by stiff opposition from the purchaser of Danskammer’s sister plant, Roseton. Castleton Commodities International, a Connecticut energy investment company, objected in court papers to Helios’ plans and went so far as to make a counter offer to Dynegy to purchase Danskammer if the Helios deal fell through.

Central Hudson Gas & Electric, a former owner of Danskammer, reportedly has an offer on the table with Helios that would provide electricity to Central Hudson for $28 million a year for four years. Central Hudson would also pay $6 million for capital upgrades at Danskammer.

Central Hudson isn’t the only party rooting for the retooling of the power plant.

The Town of Newburgh, the Marlboro School District, Orange County and other taxing entities took serious and, in the case of the school district, crushing blows when Dynegy declared bankruptcy and shuttered Roseton and Danskammer. The resulting shockwaves are still being felt all the way to Albany.

Town of Newburgh Interim Supervisor Gil Piaquadio expressed surprise Monday when asked to comment on PSC action on the Helios’ request.

“I’m hoping they do [get approval to] restart Danskammer,” Piaquadio said, adding that he feared it might take a year or two before anything concrete would result from a Danskammer retooling.

He said he plans to contact the Town of Newburgh’s special legal counsel on power plant issues to see if there are new developments.

Assemblyman Frank Skartados, whose district encompasses the Marlboro school district, the town and a portion of Ulster County, said he has heard that the power plant could reopen as early as July 1.

“I have very mixed feelings about it,” he said.

Assemblyman Skartados said that the State Legislature has approved two bills totaling $4 million to help the Marlboro School District cope with the loss of income from the power plants, which previously made up 80 percent of the district’s tax base.

The restart of Danskammer is very much connected with the Federal Energy Regulatory Commission’s (FERC) approval of a new capacity zone in the Hudson Valley. The new capacity zone would impose a $230 million increase in energy costs for the region in the first year and nearly $500 million in increased costs over a three-year period.

The prediction is that energy costs for Hudson Valley customers will rise 10 to 15 percent if the capacity zone decision is allowed to stand.

“People are not eager to see energy prices go up [along] with the rough winter we’ve had,” Skartados said, adding that he is also concerned with possible health hazards resulting from Danskammer air pollution.

Central Hudson spokesman John Maserjian said that although terms for the purchase of power from Helios haven’t been finalized, the $28 million figure quoted per year for four years is fairly accurate, as is the $6 million for upgrades.

“Once the new owners of the Danskammer generating facility became interested in returning the plant to service, Central Hudson saw an opportunity to potentially purchase capacity on behalf of our customers to mitigate the price impacts of the federally mandated capacity zone,” he said.

Maserjian estimated that returning Danskammer to production could reduce the capacity zone impact to Central Hudson customers by as much as $25 million a year.

Riverkeeper spokesperson Tina Posterli, responding to a request for comment from the Mid Hudson Times, said:

“Riverkeeper has serious concerns about the proposed restart of this aging, polluting, coal-fired power plant. Operating this plant is not consistent with New York’s goals of increasing reliance on renewable energy and expanding energy efficiency to reduce demand, and most importantly, it’s not needed.

“Restarting Danskammer would be a step backwards, and would only benefit Helios and burden local communities.”

By ALLAN GAUL
agaul@tcnewspapers.com

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