Riverkeeper Sues PSC Over Danskammer Power Plant

Oct 31, 2014

An environmental group is suing a New York State agency over a power plant in the Hudson Valley. The power plant is set to be reactivated under new ownership after severe damage from Superstorm Sandy.

Westchester County based-Riverkeeper has filed a lawsuit challenging the state Public Service Commission's approval to reactivate the Danskammer Power Plant in the Town of Newburgh without conducting a full environmental review. Phillip Musegaas is Hudson River Program Director at Riverkeeper.

“We are not trying to stop the operation of Danskammer. We want to make sure that all the environmental impacts are reviewed, and if there are impacts that can be avoided or minimized through this review process, we want to see that happen before Danskammer is allowed to restart,” says Musegaas. “And that did not happen in this case and that fundamentally is why we brought this suit.

He alleges the PSC was mistaken in comparing the impacts of Danskammer operating as a coal plant previously versus operating with natural gas, instead of comparing future operation of the plant using natural gas to the plant not operating at all. 

“This is a very old power plant, uses 400 million gallons of Hudson River water a day, causes impacts to the Hudson River, to fish stocks, releases hot water back into the river,” says Musegaas. “So there are environmental impacts to the river. There are air emissions from burning natural gas that need to be considered.”

A PSC spokesman says the Commission does not comment on litigation. Danskammer was shut down after being damaged in Hurricane Sandy two years ago, and has not operated since. Then owner Dynegy Danskammer sold the plant in 2013 to Helios Power Capital in a bankruptcy sale. The PSC in June this year approved the transfer of ownership interests to Mercuria Energy America of which Danskammer Energy is an affiliate. Here’s Danskammer Energy President Larry She.

“We’re going to be in compliance with our permits as we have been and as we will be going forward,” says She.

The plant will no longer burn coal. In fact, Musegaas points out that the state Department of Environmental Conservation is prohibiting it. Instead, the two big units at the plant will be fueled exclusively by natural gas. Two smaller units will be fueled by natural gas, with fuel oil as a backup. She says Danskammer will run differently that it did historically, when it ran nearly 24/7 as a base load facility.

“It will be a peaking facility meaning it’s going to run only on the very hottest days and the very coldest days,” says She. “Units 1 and 2,  the small units, are limited to run only 10 percent of the time, and we don’t expect the big units, Units 3 and 4, to run much more than 25… We don’t think it’s going to run more than 25 percent of the time.”

Again, Musegaas on the suit against the PSC.

“Riverkeeper’s understanding is that the Public Service Commission looked at this as much more of a transfer of ownership and determined that they did not need to look at the environmental impacts for the approval they were considering,” says Musegaas. “That’s not how the law works on this. Just because the DEC may be looking at environmental impacts under other permits that Danskammer needs, that doesn’t absolve the Public Service Commission of responsibility to follow the State Environmental Quality Review Act, SEQRA.  They have an independent duty to follow the law when it comes to assessing impacts, and they did not do that.”  

John Maserjian is spokesman for Poughkeepsie-based Central Hudson Gas & Electric Corporation. While not commenting on the lawsuit, he explains that Danskammer would help fill a capacity void by providing peak power when needed, driving down capacity prices and customer bills.

“This translates into about a $100 million savings for electric customers in this zone, this Hudson Valley zone, which extends from about Greene County down to Westchester,” says Maserjian. “And for Central Hudson customers, the savings is about $25 million a year from repowering the plant.”

That zone is the controversial energy zone implemented in May by the Federal Energy Regulatory Commission. Meanwhile, Musegaas says there is a necessary permit missing from a separate agency.

“One key point is that Danskammer also needs a permit from the National Marine Fisheries Service. This is the federal agency that regulates impacts on endangered species because Danskammer does not have a permit that would allow them to operate and potentially harm Atlantic sturgeon,” says Musegaas. “Atlantic sturgeon were listed as endangered species in the Hudson in 2012. Danskammer’s endangered species permit that they do have goes back to the year 2000 and that only covers short-nosed sturgeon.”

She declined to comment on specific permits, reiterating that all necessary permits will be in place. He says he expects Danskammer to be up and running by the end of the year.