Study Backs Retrofitting Cayuga Power Plant

TCAD-commissioned study finds converting would offer economic benefits...

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By David Hill, via the Ithaca Journal, 04/29/14

Operating a retrofitted Cayuga Power Plant in Lansing would generate 30 jobs and $5 million in earnings annually directly in New York state and 86 new jobs indirectly, a consultant determined in a study commissioned by Tompkins County Area Development.

Camoin Associates also estimated that the construction work for retrofitting the plant would create 46 net construction jobs, $5.3 million in employees’ pay and $3.5 million in indirect earnings in New York state.

TCAD commissioned the study, released Tuesday, to calculate the economic impact on the state if the Cayuga Operating Company, the plant’s owner, switches the plant from running on coal to natural gas. New York State Electric & Gas Corp. has favored instead upgrading transmission lines to get electricity from other sources to serve customers, and the study assumes that if that route is taken, all jobs there would be lost.

The study comes as the state Public Service Commission has directed Cayuga Operating and NYSEG to workout an agreement over the power plant’s future. The commission’s original deadline for an agreement was Oct. 24, 2013, but has since been extended at least six times, the latest to Dec. 1.

NYSEG declined to comment on Tuesday.

Some environmental groups, including the Sierra Club, have backed the transmission upgrade, while others back retrofitting as preserving a major taxpayer to Lansing and Tompkins County. Closing the plant would cause Lansing school taxes to increase $400 a year on the median-value home, the study said.

The study reported net jobs and income as the difference in impact of both proposals. It did not account for state revenue.

The study acknowledged that in the short term, consumers’ power bills will be higher with the repowering project, but said energy costs will rise under both scenarios. It does not spell out why power costs would increase other than both projects would need to be completed.

“While the Transmission Project may have a lower initial cost to ratepayers, it is not necessarily the case that it will result in a longer term benefit for New York State,” the study authors said.

The study report said that power industry jobs and earnings have high economic multipliers because of high wages and the type of goods and services purchased. It also uses the whole state as the area of economic impact, not just Tompkins County or the region within the state.

According to President Michael Stamm, TCAD assumed the responsibility to examine economic impact as the Public Service Commission has said that is an important factor. TCAD recognizes, however, that other factors are in play, Stamm added.

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