The Cayuga Power Plant’s future took another step towards clarity last week, as Cayuga Operating Company officially filed its deactivation notice with New York State. The move makes official the plant’s intentions to convert its Lansing-based power plant in 90 days, according to a press release from the company, though the plant's final fate likely rests with New York State.
As was announced publicly at an assortment of board meetings over the last few months, Cayuga Operating Company intends to repurpose the power plant as a data storage center called the Empire State Data Hub, pairing it with a similar coal-fueled power plant in Somerset, New York.
According to the announcement, that is still the company’s goal, but the deactivation notice was necessary to prepare union representation and state officials in case that plan falls through, particularly since Cayuga Power Plant is a peaker power facility, so New York State must measure how its closure would impact the overall power grid. Beyond that, New York State must decide whether or not it will allocate 100 megawatts of power to the new data center site in Lansing; if that power is denied, it's unclear if the data center plan can continue.
“It is our hope that we can bring the Empire State Data Hub proposal to fruition. It would enable us to address the Governor’s environmental policy goal of eliminating coal while also transitioning to a new greener economy in New York,” said Michael Enright, managing director of Beowulf Energy, which manages the Cayuga facility. “However, while we continue to work with our stakeholders on determining the path forward, we were compelled to file a deactivation notice now to properly notify all parties and prepare in the event that the repurposing is not possible and Cayuga becomes a straight plant closure.”
Tompkins County Legislator Mike Sigler, a power plant advocate, said that he had spoken to Cayuga Operating Company officials who had assured him that the deactivation notice did not foretell a rejection of the power allowance request by the state.
"They're doing this with some faith," Sigler said. "'We're giving you what you want, we're hoping that you'll follow through.' It really is that good of an idea. They've run it past people at the state, everybody seems to really like it. So, sometimes you do have to put a little bit of trust in your government, and that's what it seems like they're doing."
Sigler has long argued for the efficacy of the power plant even in the face of environmentalist opposition, touting the jobs it provided to Lansing residents. He said with the way the energy landscape is playing out in upstate New York, this was probably the best outcome that could have been hoped for.
"But hopefully, the Governor will see the wisdom of converting this into a data center, if we can make that happen then that's a $100 million investment," Sigler said. "Brand new money, and that way we don't leave this asset for the town, that's been there for so many years, just stranded up on the lake."
The announcement on Monday from the company said that the decision was based on “stricter new state air emission regulations designed to eliminate coal in New York and deteriorating market conditions.”
“Riesling [which owns Cayuga Operating Company] is committed to working with the state and other key stakeholders to try and advance the proposal and has applied to procure renewable energy from the New York Power Authority (NYPA) and economic assistance from the Empire State Development Corp. (ESD) to power the two large, power-intensive data centers with on-site solar electric generating capacity,” the statement said. “The company is also seeking state support for employee retraining resources.”
Reinventing itself as a data center will likely be the end of a rather bizarre string of occurrences for the power plant. With state regulations tightening in an effort to make New York less reliant on fossil fuel energy, it was first proposed last year that the plant would repower one of its turbines with natural gas instead of coal. Environmental advocacy groups who have long criticized the plant weren’t satisfied, though, arguing that if a conversion to natural gas were in the works, then Cayuga Operating Company could expend the extra effort and money to convert fully to solar power.
Then, in a surprising move, the company announced in May that they would be pivoting away from the natural gas plan entirely, much to the delight of those same advocacy groups. This announcement further claimed that the data hub proposal would provide union electric jobs, obviously of concern to the local IBEW chapter that had over 30 members working at the plant but which does support the data center plan.