Dive Brief:

The New York Department of Environmental Conservation (DEC) wrote a letter dated Aug. 1, denying Competitive Power Ventures (CPV) Valley Energy Center's air permit application, pushing back the plant's fully-operational start date.

The DEC said the $900 million combined-cycle natural gas facility needed a Title V Clean Air Act permit prior to operating the facility in order for the regulators to approve an air state facility permit renewal. Without a Title V permit, CPV would need to complete a more extensive application process for the state permit.

CPV's 680 MW project has been partially working since mid-July and is the primary generator in the region that would make up for the generation capacity that will be lost when Entergy's Indian Point nuclear plant is taken offline, which is expected in 2021.

Dive Insight:

The natural gas facility was seen as a way to increase grid reliability, but the CPV project was already behind schedule after a series of court battles and other delays that have cost the company about $40 million in revenue, a spokesman recently told the Times-Herald Record.

CPV's initial plan was to have the plant running on gas in February. With the delays, CPV then planned to bring the plant into full-operation in mid-August after NYISO and the New York Power Authority requested it be on standby during the summer to support reliability, Tom Rumsey, CPV vice president of external affairs told the paper.

The DEC order identified a series of fines if the facility continues operating without an air permit: up to $18,000 per violation and and additional penalty up to $15,000 for each day that violation continues. The facility's state air permit expired July 31.

The New York ISO concluded in a report last December that closing Indian Point would not hurt reliability because a trio of natural gas projects, including CPV's Valley Energy, could make up 1,800 MW of the 2,000 MW of nuclear capacity. The additional capacity includes the 679 MW CPV project, an added 120 MW to the 644 MW Bayonne Energy Center in New Jersey and the 1,100 MW Cricket Valley Energy Center to serve the lower Hudson Valley region.

But NYISO also identified possible alternatives to add reliability to the system, such as efficiency, transmission, and demand response, if the trio of gas plants failed to come online as expected.

State Sen. Terrence Murphy, R, whose district houses Indian Point, issued a statement on Sunday which said the NYISO reliability plan that includes CPV relied on "dirty fossil fuel power plants."

Murphy called for a meeting of the nuclear plant's task force regarding the CPV decision. Without a clear replacement for the nuclear generator, "people cannot be reasonably expected to believe we are prepared to replace Indian Point when the power companies are proving that they don't have the proper staff or training to perform proper tree maintenance, upgrade our transmission capacity or provide regular service," he said in a statement.

"We remain committed to operating within all applicable operating permit requirements and look forward to working with the DEC to address any concerns they may have," Rumsey said in a statement.