Facing multiple power plant closures and predicted shortages, the New York state government’s involvement in electricity is a lightning rod for criticism.

Gov. Andrew Cuomo issued a letter earlier this month to the Public Service Commission (PSC) requesting a formal investigation into the business practices of Dunkirk Power LLC and its subsidiary NRG Energy Inc. Moving to ultimately bar the company from New York, the probe is the latest jab at an industry spiraling out of control.

Central New York’s electrical quagmire dates back several years. When NRG announced its intentions to shut down the Dunkirk power plant in 2012, there was a risk of causing an unstable power grid, according to a PSC evaluation reported by Syracuse.com. The PSC then entered into a deal with the plant’s owner, NRG Energy, where National Grid customers have paid more than $110 million dollars since 2012 to subsidize the plant and keep it open.

The plan to levy National Grid customers to pay for the Dunkirk plant seems obtuse in its logic, considering the state is essentially expecting NRG to have a complete change of heart after being confined to Dunkirk for years is quite naïve. To make matters worse, the state demands that consumer dollars pay for NRG’s forced stay of execution is a deliberate decision to spread the pain of this subsidization over the greatest area. But these efforts only serve as a temporary solution to a larger problem, ultimately amounting to a waste of money.

Cuomo made a separate deal in 2013 with NRG to impose more subsidies on National Grid customers to convert the Dunkirk plant from coal to gas. But the payments never began due to a pending lawsuit suit filed by rival Entergy Corp in 2015 over New York’s subsidization of NRG. The case poked holes in the legality of deals past and future and factored into the announcement of the closure of the Dunkirk plant in January.

The whole ordeal is a complicated mess, the irony of which is palpable as hundreds of people will lose their jobs and hard-earned paychecks to a measure that was aimed at saving both. By forcing Dunkirk to stay open, New York has unleashed a storm on the state that has turned a minor problem into a catastrophe that will leave many woefully jobless.

Looking first to the initial deal made by Cuomo and the PSC to keep Dunkirk running, we see Entergy’s lawsuit stands on very solid ground. An analysis made by National Grid advised PSC that repowering the Dunkirk plant would be anywhere between three and seven times as costly as simply upgrading transmission lines to pick up the slack. If this information is true, then the state’s decision is as embarrassing as it is careless.

By financing NRG, the state government would be artificially fixing power prices in central and western New York and ultimately causing, as Entergy claims, smaller competitors to close its plants. Whether correlated or not, numerous plants in the area have announced its shut down leading to a potential power shortage for the upstate region.

Subsidizing any solution will hurt local economies such as Syracuse that utilize National Grid’s electricity. And when businesses are forced to pay higher costs for their electricity, that cost is often tacked onto the good or service they provide. All this damage to local economies was done for naught as the plant is closing, and central New York is in the same position it was in 2013.

As for NRG and its clash with the state, the company has not broken any laws as of yet. Breaking the conversion agreement with the governor is the closest the company has come to any wrongdoing. Though this move is a bit disingenuous, it’s most likely the smartest decision for the company as continuing to invest in Dunkirk while the state’s contribution to the project could be cut off by legal suit could be a dangerous investment — all for a plant the company planned on mothballing years ago.

Though the governor’s office certainly should not be chastised for its goal of a cleaner energy source for the state, its path to achieving this is the subject of much exasperation. The state’s single-minded pursuit of clean energy has the potential to leave disaster in its wake if it cannot transition the workers already in the industry to adapt to the changing technology.

Matt Huber, an associate professor of geography in Syracuse University’s Maxwell School of Citizenship and Public Affairs, weighed in on the situation facing the industry as a whole and was adamant that whatever path the state takes in future energy production, they need to look out for workers.

“The state needs to have a plan in place for retraining workers so people aren’t left out in the cold if newer energy plants are created,” said Huber.

But this will not matter if the plants these workers operate in are being shut down in droves. Cuomo has lambasted Entergy for its shutdown of the James A. FitzPatrick Nuclear Power Plant in Oswego, New York, citing the job loss of 615 employees. Ironically, the prospect of regional unemployment does not seem to deter the state government, considering Cuomo is seeking to bar NRG from doing business in the state and is pushing to close the Indian Point Energy Plant simply because he considers 25 miles away too close to the city.

Though the intricacies of power, supply and demand certainly play a heavy hand in Albany’s decision-making, the choice to subsidize a plant at higher costs rather than improve transmission infrastructure is flat-out irresponsible. The damage done to the energy market by this price suppression has many energy companies rightfully heading to greener pastures. Meanwhile, many of National Grid’s customers are left scratching their heads on what exactly they’ve been charged for over the past four years.

When the smoke clears from this multifaceted battle, it’s likely that the indemnities paid out by the state will be as large as the burden that has and will continue to be put on the citizens of New York. If anything, the trainwreck of the power plant wars should serve as a cautionary tale of the state government interfering with utilities only to throw the baby out with the bathwater.

Theo Horn is a sophomore political science and public policy dual major. His column appears weekly. He can be reached at tahorn@syr.edu.

Published on February 24, 2016 at 1:19 am