AES Somerset may not be seeing a second clean coal plant on its properties anytime soon, but that doesn’t mean the power company has stopped thinking about expansion.
Company project manager Jon Reimann said AES has a “pipeline of development projects,” including an expansion of their current landfill, a $20 million port project and the possibility of windmills.
“There is at least the perception out there that this was only about clean coal and that’s not the case,” Reimann said. “We have a platform to expand off of that existing business.”
AES approached the Niagara County Industrial Development Agency last year to ask for a payment-in-lieu-of-taxes agreement on their existing plant for “tax certainty” that would reportedly benefit their bid for an advanced clean coal power plant from the New York Power Authority. Ultimately NRG Huntley in the Town of Tonawanda received the nod for a plant as long as they could work out financial issues within 18 months.
Both Reimann and AES Somerset plant manager Kevin Pierce said they don’t believe the award was truly granted to NRG because they were not given a power purchase agreement. If the plant is built, however, it may be hard for AES to build another plant on their site.
“Western New York cannot support both because of transmission congestion,” Reimann said. “We just can’t get all of that power east.”
So instead, the company is focusing on a few other projects to keep things growing.
The plant is preparing to build a 13-acre cell within their existing landfill. AES has 198 acres set aside for landfilling. Reimann said the project is estimated at $4 million and will likely use about 45 laborers to complete.
The safety of the landfills were called into question several years ago when the Town of Somerset and the Department of Environmental Conservation filed lawsuits against AES seeking a more secure landfill lining in Landfill 1. The landfill, which is filled with a fly ash mixture, has a membrane liner.
Reimann said concerns have been raised over the ammonia-saturated fly ash, a byproduct of the plant. The ash is mixed with other solids to create a concrete-like substance and placed into the landfill. AES said the water that runs off the site meets clean water drinking standards.
Currently AES is challenging parts of a recommended decision made by two examining judges from the New York State Board on Electric Generation Siting. The decision rules on a joint proposal made by AES, the town and the DEC in July specifying that the power plant would create a double-lined landfill when they run out of space in the current single-lined one. The ruling estimated it may take 20 years before that landfill is packed.
Reimann said the plans for the newest landfill has been approved by the siting board, DEC and state Public Service Commission.
The plant will be gearing up for its big turbine rebuild in 2008-09. Every 10 years, AES shuts down the turbine to fix it up. Reimann said the 35 to 45-day outage will put over 500 laborers to work.
The company’s abandoned research and development center may find new life looking into scrubber technologies, using oxygen in the coal combustion process and finding ways to use leftover carbon dioxide. Reimann said the former NYSEG plant was the chief research and development center for sulfur dioxide in the 1980s.
AES may even send some power out to Canada. Government officials of the northern country are split on the issue of the Kyoto Protocol, an amendment to a United Nations international treaty that attempts to reduce greenhouse gases. The country is not currently expected to make its environmental targets in 2008.
“It’s interesting because Canadians have been all over the board as to whether they are going to shut facilities down,” Reimann said. “There is a big unknown there.”
Canada is key to AES Somerset’s future plans. Reimann said the company is planning to get permitting to build a port along its property.
The port would not only be used to ship products needed for the plant, but also to ship out byproducts. For instance, Reimann said the company is planning to use its leftover calcium sulfate to make gypsum wallboard that could be shipped through the Welland Canal and St. Lawrence River.
This isn’t the first time Somerset Town Attorney Edwin Shoemaker has heard about the wallboard idea as part of a $10 million project presented a few years ago.
“They had an IDA payment-in-lieu-of-taxes (PILOT) for that gypsum plant,” Shoemaker said. “There was quite a bit of controversy over that. The people in Somerset didn’t think it was a good idea. It fell apart and never went anywhere.”
Reimann said the U.S. Army Corps of Engineers did a study on how to alleviate congestion on international bridges between America and Canada, and noted a Somerset seaport as a possible solution.
“The Somerset site was chosen as the choice location,” Reimann said. “This was an independent study funded with federal dollars. We weren’t part of it.”
Reimann said AES is planning to work with the Niagara County Center for Economic Development and the Buffalo Niagara Enterprise to find “second- and third-tier” businesses who could use the company-run port to import and export goods. The businesses may even be able to move onto the AES site.
Windmills are still somewhere on AES’s radar. Reimann said the company has completed part of the environmental studies required as well as research on how much wind is in the area.
“We have the capacity to add 70 megawatts of wind capacity up there,” Reimann said. “That project is still in its development stage.”
The plant has installed a second tower to monitor wind speed. So far, Reimann said the shoreline looks like the best place to install the windmills.
In the meantime, the Town of Somerset has been looking into wind power from other sources. The president and CEO of Empire State Wind Energy held a presentation Jan. 9 for the town board on windmills. The company, owned by Buffalo Sabres owner Tom Golisano, gives the community a chance to buy the windmills if they are profitable. All initial costs and leases would be assumed by the company.
Reimann said the company still wants to work with Somerset to build the windmills. Town Supervisor Richard Meyers said a deal with AES is still possible in his opinion.
“Everybody’s up in the air at this point until we get more substantial plans,” Meyers said. “We will be moving forward on the wind farm issue. I feel the residents of Somerset are securely for wind power and I will do anything to get that moving forward.”
Meyers is still awaiting responses from the town board to see if they want to keep pursuing wind energy, too.
AES is going to have to find a way to pay for all of these plans. Reimann said the company is looking at banks to assist them and not public tax dollars.
“The banks are comfortable with our technology,” Reimann said. “We just need to show them a revenue stream. Banks want that contract that says we will get this much revenue from one source.”
Reimann said most wind projects have a PILOT attached. Even thought the tax breaks may not be a popular subject these days, he said he believes residents will realize that PILOTs aren’t all bad.
“It has taken on this negative connotation,” Reimann said. “I think time will heal. I think there are some people who are emotional and unobjective who can say “˜this kind of makes sense’ as we go forward. We need development. We need growth and new jobs.”
Contact Tasha Kates at 439-9222, Ext. 6241.
By Tasha Kates / email@example.com
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