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CPV Valley backs Millennium's request for waiver of NY permit for gas lateral

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Essential Energy Insights - January 2021


CPV Valley backs Millennium's request for waiver of NY permit for gas lateral

CPV Valley, the shipper on a natural gas lateral proposed by Millennium Pipeline Co. LLC to supply an under-construction New York power plant, reached out to FERC in support of the pipeline company's attempt to move past a state-controlled permitting process that has held up the last authorization required by the U.S. government.

CPV Valley would receive gas transportation service on Millennium's 127,200-Dth/d Valley lateral project, which would move the gas from the Millennium mainline to the 650-MW CPV Valley Energy Center, a roughly $1 billion gas-fired, combined-cycle power plant that CPV Valley is building in Wawayanda, N.Y.

"The CPV Valley Energy Center is nearly 80% complete," CPV Valley told the Federal Energy Regulatory Commission in an Aug. 4 motion. "Millennium has not yet commenced construction of the Valley lateral project because the New York State Department of Environmental Conservation has failed to act on Millennium's water quality certification application pursuant to Section 401 of the Clean Water Act ... despite the fact that NYDEC received Millennium's WQC application on November 23, 2015 — nearly twenty months ago."

The CPV Valley motion supported Millennium's July 21 request to FERC for a notice to proceed with construction, which included a request for a waiver of the New York-issued water quality permit because the state had not acted in the time required by the Clean Water Act. Millennium, owned by subsidiaries of TransCanada Corp., National Grid plc and DTE Energy Co., said its estimated costs for the lateral have risen from $39 million to about $57 million because of the delay. FERC approved the 7.8-mile lateral in November 2016, but Millennium was forced back to the commission after New York did not give it the permit and a federal court directed the pipeline to seek relief at FERC.

The New York State Department of Environmental Conservation opposed Millennium's request for the waiver, saying its reading of the Clean Water Act gives it until Aug. 30 to make a decision on the permit. A group fighting the Millennium project, Protect Orange County, supported the state's objection.

"The state of New York has exclusive jurisdiction of this matter," the group's chair, Pramilla Malick, wrote in an Aug. 4 letter to FERC. "No waiver has been established. A public process is underway. Granting the motions of Millennium and CPV will usurp the rights of NY citizens and agencies that are guaranteed under both state and federal law."

CPV Valley said the delay is costing those residents. "The failure of NYDEC to act on Millennium's WQC application has caused, and will continue to cause, significant harm to CPV Valley, wholesale markets, and retail customers," CPV Valley wrote. "CPV Valley Energy Center is a state-of-the-art combined cycle generating facility, using advanced and highly efficient power generation technology designed primarily to burn natural gas as fuel, but with dual fuel capability to burn oil as a backup fuel source. NYDEC's failure to act is forcing CPV Valley to commission its project on oil, a fuel that is more expensive and less efficient than natural gas."

CPV Valley said it will participate in power markets as a capacity resource, but because of the delay for the lateral, the power company "will not be able to commit to supply the facility's full capacity when it generates power on oil, and will be limited to approximately 720 hours of operation per year on oil."

CPV Valley estimated that its additional costs related to the delay are $4.2 million per month, and it said that for each month it cannot generate electricity using natural gas, it will also lose about $6.1 million in revenues. (FERC docket CP16-17)

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