Danskammer: An old plant breeds new controversies

NEWBURGH – Along the shore of the Hudson River, what used to be one of the state's dirtiest power plants is coming back to life.

Only this time, the Danskammer plant in the Town of Newburgh won't rank among the state's 10 biggest air polluters, as it did in 2000. And it won't rank fifth in the state in the amount of mercury it releases, as it did in 2005.

That's because Danskammer will generate power with natural gas instead of the much dirtier coal it used to burn. And it won't run full time as it once did. It will provide energy only in periods of peak demand.

But that hasn't stopped local environmental groups from calling on regulators to scrutinize the plant's operations as if it were being built from scratch, as opposed to comparing its environmental impacts against what they were when the plant burned coal.

And so once again, Danskammer finds itself in the center of a swirling environmental debate, though for different — and sometimes contradictory — reasons.

Last month, Riverkeeper filed a lawsuit demanding a full review under the State Environmental Quality Review Act. The Ossining-based environmental nonprofit said the state Public Service Commission was wrong to decide that such a review is not needed. And Scenic Hudson, based in Poughkeepsie, also has called for a fuller review, though it has not filed a lawsuit.

"We really think that for a dirty plant like that on the Hudson River, they have got to have the strictest environmental controls," said Hayley Carlock, a Scenic Hudson attorney.

The environmental organizations are not alone. The state Attorney General's Office has advocated for comprehensive reviews.

Danskammer stopped producing power in 2012. In October 2012, its lower levels were flooded by water pushed up the Hudson River by Superstorm Sandy.

Danskammer's owners say the benefits of the plant's restart far outweigh any negative impacts. In addition to being much cleaner, it will relieve some of the higher costs Lower Hudson Valley customers have been paying since the federal government established the capacity zone. The higher prices in the capacity zone were created to incentivize additional sources of power generation, and Danskammer is one of them.

"We work closely with regulatory agencies and municipal, county and state governments to ensure Danskammer's operations are consistent with all applicable permit requirements," said Larry She, president of Danskammer Energy LLC. "And Danskammer will continue to do so."

PSC: No review needed

So far, the state has agreed. The PSC won't comment on the Riverkeeper lawsuit. But it has said Danskammer's rebirth would not have significant environmental harm.

The plant brings another potential impact, one that Scenic Hudson and other groups tacitly support. Danskammer will provide added capacity to an area the state has said needs additional or enhanced transmission lines to relieve congestion within the grid. Scenic Hudson has used the fact that plants such as Danskammer are in development to argue the state does not need to run new power lines through scenic areas of the Hudson Valley. It argues that plenty of new power is coming online nearby, so additional power lines to bring it from farther away are unnecessary — and inefficient.

The debate underscores the complex, interconnected and sometimes contradictory principles surrounding power generation that have come to a head.

Roy Lewis, a 66-year-old East Fishkill resident, spends time boating on the Hudson River and appreciates its splendor. But he questions whether Danskammer should be required to face the full slate of environmental reviews.

"If you delay it enough, people will walk away from it," he said. "And where are they going to get the extra power from? If they bring it down from upstate New York, you are going to have to put new power lines up."

A delicate balance

The issues also highlight the challenge both the nonprofits and state regulators face when trying to ensure environmental protection without enhancing New York's reputation as a place that is difficult to do business.

"It's a tough question, and it is something we carefully evaluate and struggle with when we do become involved in these issues," Carlock said.

Riverkeeper's lawsuit comes as it and Scenic Hudson have championed successes through a different tack — that is, helping shape infrastructure projects not as watchdogs in the regulatory process, but through private discussions with project sponsors. In 2012, Riverkeeper and Scenic Hudson signed an agreement expressing support for the $2.2 billion Champlain Hudson Power Express — a giant underground extension cord that will bring power from Canada to New York City — after negotiating terms with the project's developers.

Both organizations touted that by getting a seat at the negotiating table, they obtained agreements that protected critical river habitat and secured funding that would support future projects. The two groups also worked to hammer out an agreement with the state on the Tappan Zee Bridge replacement.

Not this time, however.

Riverkeeper says its suit merely seeks to ensure the steps in SEQRA and other permitting regulations are followed correctly. What's more, Riverkeeper contends the PSC used an assessment of Danskammer's environmental impacts to argue the project should move forward — because it will be cleaner — while at the same time saying there is no need to assess environmental impacts.

"So they kind of talked out of both sides of their mouth," said Phillip Musegaas, Riverkeeper's Hudson River program director.

Restart requires review

The suit contends that regulations specifically require a full environmental review based on a comparison of Danskammer's future impacts to its most recent status as a nonoperational plant. Riverkeeper stresses that its lawsuit is not aimed to create an "either-or" proposition. The outcome of a fuller environmental review, it says, might be a better, more efficient and cleaner power plant.

"That is the purpose of having SEQRA and having the public give input on that operation," Musegaas said. "By ignoring that environmental review, you ignore the opportunity and the benefit you have of getting public comment and looking at alternative ways of operating the plant."

Scenic Hudson chose not to file a lawsuit challenging Danskammer. However, in comments to regulators, it echoed Riverkeeper's view the PSC should have conducted a full environmental review.

Both groups say the plant is subject to other reviews, including an examination of smokestack emissions as required by the Clean Air Act. Because it was built before the Clean Air Act's passage in 1970, the plant was grandfathered from having to undergo various regulatory requirements under the law.

The Environmental Protection Agency has stated that plants that have been permanently shut down must undergo these reviews when they restart. The EPA defines a permanent shutdown in part based on the owners' intent. In Danskammer's case, the prior owners had stopped operating, declared bankruptcy and indicated they were going to sell the plant for scrap. Indeed, in April 2013, the PSC noted the plant's retirement was "irreversible."

Any contention that the plant was not permanently shut down "does not pass the laugh test," Carlock said.

One local expert said such a review could sound the death knell for a plant like Danskammer. Allan Page, a former Central Hudson Gas & Electric Corp. senior executive who now runs his own consultancy business, said the new source reviews under the Clean Air Act can take years. By that time, he said, other plants may come online and displace Danskammer.

Page equated Danskammer to an old family car that is no longer being used daily but is available to run when the kids come home from college.

"So why go out and buy a brand new car that might be more efficient, when all you have to do is use it incidentally?" he said.

The groups say there is no telling whether Danskammer will remain a peak-use plant forever. And, they say, other critical economic resources are at risk as well. They note that the river's health, and the health of the surrounding environment, are the basis for significant — and growing — agricultural and tourism-based economies.

"We understand that you need to be able to generate and transmit power," Carlock said. "People need a place to live and places to do business. But if we think a project is detrimental — whether it is badly planned or extremely polluting – that is why we intervene and hope for a better outcome."

John Ferro: 845-437-4816; jferro@poughkeepsiejournal.com; Twitter: @PoJoEnviro

ENVIRONMENTAL REVIEWS

Riverkeeper, Scenic Hudson and the state Attorney General's Office have called for these reviews of Danskammer:

State Environmental Quality Review Act (SEQRA): PSC lead agency. Overall impacts.

State Pollutant Discharge Elimination System (SPDES): DEC lead agency. Water discharge, fish impacts.

New Source Review: DEC, via EPA. Air emissions.