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Barge carries CNY power plant equipment to Pakistan
Saturday, November 08, 2008
By Tim Knauss
The turbines and generators from two Central New York power plants are being shipped overseas this week, less than two decades after the plants were built, a sign of the changing fortunes wrought by policy shifts in New York's electric industry.
A 105-ton turbine and an 80-ton generator from the recently closed Onondaga Cogeneration plant in Solvay were loaded Thursday onto a barge in Onondaga Lake. The barge was scheduled to leave today for Oswego, where it will pick up a second turbine from the Fulton Cogeneration plant, which hasn't produced power in several years.
The cargo will be shipped back down the Oswego River, across Oneida Lake and down the Erie Canal to Albany, where it will be loaded on a ship bound for Pakistan, said Rob Goldman, a co-owner of the shipping company, New York State Marine Highway Transportation Co.
The cogeneration plants in Solvay and Fulton were constructed during the early 1990s, when state and federal policies encouraged new power plants that used clean-burning natural gas to produce power and steam.
Both plants sold power to Niagara Mohawk Power Corp., which was obligated by New York state's Six Cent Law to sign long-term contracts at mandated rates - typically 6 cents or more per kilowatt-hour - well above market value at the time. The law was repealed in 1992, but not before the utility signed dozens of contracts with independent power producers.
In 1998, as New York state turned toward a market-based electric industry, Niagara Mohawk paid $4 billion to buy out 29 of its biggest contracts, including the contracts with Onondaga and Fulton. Since then, the two power plants and others like them have struggled to survive in a competitive power market.
Antonio Zarrella, general manager of Carr Street Generating Station in East Syracuse, said four or five Upstate power plants built during the six-cent era have been shut down and shipped overseas in recent years.
"We're cutting them down like they're worth nothing," Zarrella said. "It's unbelievable."
Carr Street was built for about $133 million in 1991 to produce power for Niagara Mohawk. Its contract, too, was bought out in 1998. Now the plant runs about 3 percent of the time - equivalent to 11 days per year - only at times when power is at greatest demand and prices are highest, Zarrella said.
Natural gas prices are too high for small gas-burning plants to run all the time, the way coal and nuclear plants do, he said.
Power plants like Carr Street fulfill a valuable function, filling in when other plants break down or when power demand peaks, Zarrella said. But it's hard to stay afloat on what the facility is paid, he said.
"These (natural gas) facilities are being forced overseas, and the coal plants in our country continue to make money," he said.
Onondaga Cogeneration, a 91-megawatt power plant, opened in 1994 at a cost of $110 million. The current owner, Atlantic Power Corp., shut the facility last April because it could not make a profit, said William Daniels, director of asset management.
Now Atlantic Power is working with Catalyst Renewables to rebuild the facility to burn wood, a renovation estimated to cost $80 million. Daniels said the companies are seeking construction estimates and talking to potential customers about signing power-purchase agreements.
Atlantic Power sold the two gas-burning turbines from the facility for about $7 million, according to company securities filings.
Fulton Cogeneration, a 49-megawatt facility, opened in 1991 at a cost of roughly $49 million. The plant has not run for several years, and its equipment was recently sold under court order because the owner failed to honor its payment-in-lieu-of-tax agreement.
The turbine and other equipment were sold for $2.5 million, said L. Michael Treadwell, head of the Oswego County Industrial Development Authority, which sued to collect $1.4 million in overdue PILOT payments. Treadwell said the proceeds should just about cover what's owed, after deducting the IDA's expenses.
Robert Tonneson, president of Noelle Consulting LLC, which bought the Fulton equipment, said the turbine is headed overseas, but he's not sure where.
Goldman, the co-owner of the transportation company, said the ship to which he is delivering the cargo in Albany is bound for Pakistan.
Pulled by a tugboat, the barge laden with 185 tons worth of turbine and generator will depart from Onondaga Lake today, after taking on another 1,000 tons of water to make the barge ride low enough to get under bridges, Goldman said. It will load the Fulton equipment Monday at the Port of Oswego and leave Tuesday or Wednesday for Albany.
You can contact Staff Writer Tim Knauss at tknauss@syracuse.com or 470-3023.
Saturday, November 08, 2008
By Tim Knauss
The turbines and generators from two Central New York power plants are being shipped overseas this week, less than two decades after the plants were built, a sign of the changing fortunes wrought by policy shifts in New York's electric industry.
A 105-ton turbine and an 80-ton generator from the recently closed Onondaga Cogeneration plant in Solvay were loaded Thursday onto a barge in Onondaga Lake. The barge was scheduled to leave today for Oswego, where it will pick up a second turbine from the Fulton Cogeneration plant, which hasn't produced power in several years.
The cargo will be shipped back down the Oswego River, across Oneida Lake and down the Erie Canal to Albany, where it will be loaded on a ship bound for Pakistan, said Rob Goldman, a co-owner of the shipping company, New York State Marine Highway Transportation Co.
The cogeneration plants in Solvay and Fulton were constructed during the early 1990s, when state and federal policies encouraged new power plants that used clean-burning natural gas to produce power and steam.
Both plants sold power to Niagara Mohawk Power Corp., which was obligated by New York state's Six Cent Law to sign long-term contracts at mandated rates - typically 6 cents or more per kilowatt-hour - well above market value at the time. The law was repealed in 1992, but not before the utility signed dozens of contracts with independent power producers.
In 1998, as New York state turned toward a market-based electric industry, Niagara Mohawk paid $4 billion to buy out 29 of its biggest contracts, including the contracts with Onondaga and Fulton. Since then, the two power plants and others like them have struggled to survive in a competitive power market.
Antonio Zarrella, general manager of Carr Street Generating Station in East Syracuse, said four or five Upstate power plants built during the six-cent era have been shut down and shipped overseas in recent years.
"We're cutting them down like they're worth nothing," Zarrella said. "It's unbelievable."
Carr Street was built for about $133 million in 1991 to produce power for Niagara Mohawk. Its contract, too, was bought out in 1998. Now the plant runs about 3 percent of the time - equivalent to 11 days per year - only at times when power is at greatest demand and prices are highest, Zarrella said.
Natural gas prices are too high for small gas-burning plants to run all the time, the way coal and nuclear plants do, he said.
Power plants like Carr Street fulfill a valuable function, filling in when other plants break down or when power demand peaks, Zarrella said. But it's hard to stay afloat on what the facility is paid, he said.
"These (natural gas) facilities are being forced overseas, and the coal plants in our country continue to make money," he said.
Onondaga Cogeneration, a 91-megawatt power plant, opened in 1994 at a cost of $110 million. The current owner, Atlantic Power Corp., shut the facility last April because it could not make a profit, said William Daniels, director of asset management.
Now Atlantic Power is working with Catalyst Renewables to rebuild the facility to burn wood, a renovation estimated to cost $80 million. Daniels said the companies are seeking construction estimates and talking to potential customers about signing power-purchase agreements.
Atlantic Power sold the two gas-burning turbines from the facility for about $7 million, according to company securities filings.
Fulton Cogeneration, a 49-megawatt facility, opened in 1991 at a cost of roughly $49 million. The plant has not run for several years, and its equipment was recently sold under court order because the owner failed to honor its payment-in-lieu-of-tax agreement.
The turbine and other equipment were sold for $2.5 million, said L. Michael Treadwell, head of the Oswego County Industrial Development Authority, which sued to collect $1.4 million in overdue PILOT payments. Treadwell said the proceeds should just about cover what's owed, after deducting the IDA's expenses.
Robert Tonneson, president of Noelle Consulting LLC, which bought the Fulton equipment, said the turbine is headed overseas, but he's not sure where.
Goldman, the co-owner of the transportation company, said the ship to which he is delivering the cargo in Albany is bound for Pakistan.
Pulled by a tugboat, the barge laden with 185 tons worth of turbine and generator will depart from Onondaga Lake today, after taking on another 1,000 tons of water to make the barge ride low enough to get under bridges, Goldman said. It will load the Fulton equipment Monday at the Port of Oswego and leave Tuesday or Wednesday for Albany.
You can contact Staff Writer Tim Knauss at tknauss@syracuse.com or 470-3023.
