|
Consulting |
Search |
N.Y. PSC Orders Continuation of Iberdrola Fossil Generation Divestiture, Assets to be Offered Separately
July 15, 2011
Email This Story
The New York State PSC has directed Iberdrola, S.A. to restructure the required sale of its fossil fuel generation power plants in New York by offering the plants for sale individually rather than as a group (07-M-0906).
As only reported by Matters (1/20), Iberdrola subsidiary Rochester Gas and Electric had recommended that the PSC should terminate the fossil generation divestiture plan, after its auction to sell all of the capacity to be divested as a bundle failed to attract any conforming offers above an offer floor.
The divestiture plan, a condition of Iberdrola's purchase of the Energy East utilities, includes RG&E's Allegany station, a 62 MW gas-fired combined cycle facility; affiliate Cayuga Energy, Inc.'s Carthage station, a 63 MW gas-fired combined cycle facility; RG&E's stations 3 and 9, with an 18 MW gas-fired combustion turbine located at each station; and RG&E's Russell site, the location of the recently retired Russell coal-fired generation facility.
RG&E has said that the two 18-MW peaking units would have to be removed from their current location by any buyer, and that the Allegany Station requires $2 million in upgrade costs. The Russell site includes a host of environmental remediation obligations.
The Independent Power Producers of New York opposed RG&E's recommendation to terminate the divestiture plan, arguing that the plan was flawed by bundling all of the assets together, and because environmental remediation, rehabilitation, or demolition costs for certain sites were not included in assessing the book value of the assets, which established the price floor for the auction.
Although a written order was not published yesterday, the PSC said in a press release that the sale of the assets might attract more interest by treating the two combined cycle generation facilities as two separate components in one package to be auctioned; grouping the two RG&E peaking turbines into a second package to be auctioned; and separating the now-dormant Russell site into a third package.
"With the recent closure of the Russell generation site, it is difficult to forecast both the need for and timing of the construction of a new generation facility in the Rochester area. Due to the environmental conditions currently present at the Russell site, finding a buyer interested in anything other than generation redevelopment is unlikely," the PSC said.
"Since RG&E is likely to continue as the owner of the Russell site for some time, the Commission determined that the best alternative is for it is to proceed with demolition and environmental remediation at the site. Therefore, RG&E was directed by the Commission to file a plan, within six months of release of the Commission's order in this matter, for proceeding with demolition and environmental remediation at the Russell site," the PSC added.
Email This Story
Copyright 2010-
Be Seen By Energy Professionals in Retail and Wholesale Marketing
Run Ads with Energy Choice Matters
Call Paul Ring
954-
|
Consulting |
Search |