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Plan unveiled to repurpose New York's 2 coal plant sites for data centers

Following New York's recent adoption of strict emissions aimed at phasing out coal-fired generation, the operator of the state's two remaining coal-fired power plants has proposed to shutter those facilities and build data centers on their sites.

At a recent Lansing board meeting, town officials presented a plan by Beowulf Energy LLC to replace the 310-MW Cayuga ST and approximately 692-MW Somerset ST coal-fired power plants, respectively located in upstate Tompkins County and Niagara County, with data centers that will operate using electricity supplied largely from renewable resources. The plants are majority-owned by Blackstone Group LP's subsidiary GSO Capital Partners LP, with minority stakes claimed by Bicent Power LLC, and are operated by Beowulf Energy subsidiaries Cayuga Operating Co. LLC and Somerset Operating Co. LLC.

According to the plan, converting the Somerset and Cayuga sites "from energy suppliers to energy consumers" is a "natural transition" because the data centers would use existing infrastructure such as electrical interconnections and "otherwise abandoned" large tracts of land.

"They want to get out of the power generating business," Town of Lansing Supervisor Ed LaVigne said of Beowulf's plan for Cayuga at the May 15 board meeting. "They have no intent, and they're willing to sign a paper saying so, that they have no desire to re-power the plant with natural gas."

In 2016, the New York Public Service Commission rejected a roughly $102 million ratepayer-funded plan to prevent the retirement of Cayuga by retrofitting it to burn natural gas. The commission deemed the conversion plans too costly and unnecessary and instead backed an approximately $23 million transmission project as an alternative.

Nonetheless, Beowulf persisted with its goal of converting Cayuga into a gas-fired plant, and it even proposed trucking-in that fuel from Pennsylvania. However, the plan met resistance that culminated in the Tompkins County Legislature passing a resolution in November 2018 to oppose the gas conversion.

Then, New York's Department of Environmental Conservation on May 9 issued new carbon dioxide emissions regulations with a stated goal of a coal phase-out by the end of 2020, putting the future of Cayuga into further doubt.

Beowulf Energy executive Michael Enright said in a statement that the company's transition plan seeks to retire the coal plants before the deadline established by the Gov. Andrew Cuomo, a Democrat, administration "while creating a viable new business and jobs in their place, using renewable energy." According to Enright, the transition plan for Cayuga and Somerset has been presented to the state.

As outlined in the plan, the Cayuga data center would include a proposed on-site 15-MW solar array, and the company has applied to the New York Power Authority, or NYPA, for an allocation of 125 MW of power from renewable sources for both Cayuga and Somerset's electricity needs. According to Tompkins County Legislator Mike Sigler, who presented Cayuga's proposal, that 125 MW of "clean" energy is meant to come from the NYPA's approximately 2,447-MW Robert Moses Niagara hydroelectricity facility on the Canadian border.

In addition, an application for state funding to offset the costs of repurposing electrical equipment is pending with the state-run Empire State Development Corp., the memo said.

"Closing the Somerset and Cayuga Power plants and repurposing those sites as data centers powered by renewable energy would constitute an almost 10 to 1 replacement ratio of fossil fuel to clean energy," the memo said. "And would fulfill [the] governor's pledge to shut down coal in New York ahead of his December 2020 timeline."

However, the memo warned, "If denied a 125 [MW] clean power allocation at NYPA, the power plant owners could pursue an existing repowering application (via trucked natural gas) at Cayuga and/or sue the state on its proposed coal regulations designed to close only these two plants."

Beowulf's proposal has been welcomed by No Fracked Gas Cayuga, a local grassroots environmentalist group. In a press release, the group's co-founder Irene Weiser urged the NYPA "to provide the renewable energy that this data center seeks as long as it commits never to burn fossil fuels again."