Dunkirk Power Plant Closure Could Cost City, County Millions

May 14, 2012 Updated May 14, 2012 at 6:47 PM EDT

By WKBW Internet

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May 14, 2012 Updated May 14, 2012 at 6:47 PM EDT

DUNKIRK, NY (WKBW) - The closure of the Dunkirk coal power plant could wind up costing the Dunkirk and Chautauqua County more than $16 million over the next two years.

NRG Energy submitted a 'mothball application' to the state Public Service Commission (PSC) back in March, requesting to temporarily close the plant.

The PSC has six months to determine how much, if any power is required from the Dunkirk facility to ensure the reliability of the Western New York power grid.

If the commission decides the plant can completely shut-down, more than 100 skilled workers would likely be transferred to other facilities. NRG would also no longer be legally required to pay about $16.6 million over the next two years of Payments in Lieu of Taxes (PILOT).

That money provided nearly 25 percent of the City of Dunkirk's revenue in 2012, and goes to pay school and public works costs.

“Our message today is clear – Dunkirk residents and taxpayers have been upstanding community partners to NRG for years, and it would be absolutely unacceptable for NRG to turn its back on the students, residents, and local officials in the community that it calls home,” said New York Senator Charles Schumer.

NRG, who has owned and operated the Dunkirk station for 13 years said in a statement released Monday that the company has spent $227 million on plant upgrades, and annual contributes about $40 million in benefits locally, all while losing a"a considerable amount of money" over the past three years.

The company added, "NRG has met and will continue to meet our obligations under the Dunkirk PILOT agreement under all circumstances. The PILOT agreement actually provides for lower, tiered payments in the event that any of the plant’s four units are mothballed or retired. "

According to Chautauqua County officials, NRG would look to re-open the Dunkirk plant fully in 2015, once new EPA regulations take effect which put new standards and coal plant emissions.

NRG has upgraded the Dunkirk facility to meet these new standards, and would be able to operate in a region that is estimated to see dozens of coal plants shut down.