September 30, 2011
New York

New York Power Authority won’t reconsider buying power from Galloo Island Wind Farm

By NANCY MADSEN, TIMES STAFF WRITER, FRIDAY, SEPTEMBER 30, 2011, watertowndailytimes.com

Galloo Island Wind Farm doesn’t have a prayer of getting any money from the New York Power Authority. And neither do any other renewable energy projects, authority staff reportedly said during a conference call Wednesday.

“NYPA’s comments were that they were going to put their efforts into upgrading transmission lines and strengthening the grid,” said Assemblyman Kenneth D. Blankenbush, R-Black River, who was on the call. “Therefore, at least at this time, they will not be issuing any” purchase power agreements.

On Tuesday, NYPA’s board agreed to suspend the process to award contracts for electricity for offshore wind turbines in the waters of Lake Erie and Lake Ontario because of the price. The proposed Galloo Island project had applied for a contract through NYPA’s request for proposals.

On Thursday, NYPA acknowledged an infrastructure focus in the conference call, but didn’t say it would cease to give new fixed-price contracts for new generation projects.

“NYPA staff stated the Great Lakes Offshore Wind RFP process showed it was not fiscally prudent now to pursue a large-scale offshore wind project in those waters,” Connie M. Cullen, deputy director of media relations, said in an email. “NYPA is focusing on reinforcing our transmission system to integrate more land-based wind upstate and Canadian hydropower, and also implement clean energy and energy efficiency projects to support the state’s energy and economic development goals. In addition, NYPA will continue to purchase renewable energy, at the request of our customers, on a competitive basis.”

Mr. Blankenbush said he could understand the decision not to back offshore wind.

“In the economic conditions we have right now, they figure $100 million a year would be subsidized,” he said. “They feel that they could use that money in a different direction – the new leadership of NYPA has made that decision.”

In announcing the board’s decision Tuesday, NYPA said a 150-megawatt project would need a subsidy of $60 million to $100 million per year. The cost of the five proposals for offshore projects would be two to four times the cost of onshore wind. The authority will work with partners on a project off Long Island, which will feed power directly to the high-price markets of New York City, Long Island and New Jersey.

Wednesday’s 15-minute conference call also included Gov. Andrew M. Cuomo’s office and representatives of Upstate NY Power Corp. Wind developer representative Robert W. Burgdorf, attorney with Nixon Peabody, Rochester, said the company did not wish to comment. Mr. Cuomo’s office did not reply to a request for comments Wednesday afternoon.

“The bottom line, in my opinion, is now the investors and contractors have to figure out if Galloo Island can proceed without a PPA,” Mr. Blankenbush said. “That, of course, wasn’t talked about, but I’m sure they’re going back and looking at the project. Now it will be up to the investors to decide.”

The market for renewable energy has not been strong since the economic downturn as prices for electricity have fallen because many manufacturing facilities have been dormant or on reduced production.

“I think the project is probably in jeopardy,” Mr. Blankenbush said.

The project developer had promised hundreds of jobs during construction on Galloo Island, an island in Lake Ontario six miles from the nearest shore, and two dozen full-time operation jobs. Other subsidies are still available, including a renewable energy portfolio standard, contracts determined by a competitive bid through the New York State Energy Research and Development Authority, but that does not have a regular schedule.

URL to article:  https://www.wind-watch.org/news/2011/09/30/new-york-power-authority-wont-reconsider-buying-power-from-galloo-island-wind-farm/