NYPA CEO Announces Plans For Purchase Of Electricity From Albany Landfill Gas Facilities To Provide Supplemental Electricity For Village Of Solvay

Michael Saltzman

June 29, 2010


BUFFALO—New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel announced today that the Power Authority’s partnership with the Village of Solvay for meeting the village’s electricity needs is taking on a new dimension with the selection of a proposal by an Albany energy supplier for providing supplemental power that NYPA will purchase from a renewable source on behalf of the community. Albany Energy LLC, which will provide the power from existing and new landfill gas-to-energy facilities at the Albany Landfill, was the lowest-cost qualified bidder in the Power Authority and village’s review of 13 competing proposals for meeting a portion of Solvay’s incremental energy requirements. 

“The renewable power the Power Authority will purchase from Albany Energy will supplement the low-cost hydropower that the Solvay Electric Department obtains as one of our 51 municipal and rural electric system customers in the state,” Richard M. Kessel, NYPA president and chief executive officer, said. “Over the last few months, NYPA and the village have worked closely in reviewing bids submitted in response to a Request for Proposals [RFP] for economical and stable power supplies that would compare favorably with projected energy market prices. Albany Energy’s proposal best met the standards of the RFP, and will contribute to New York State’s goal for 45 percent of the electricity requirements in the state to be met by increased renewable power use and improved energy efficiency by the year 2015.”

“Thorough review of the bid proposals determined that Albany Energy’s bid would best meet the supplemental electricity needs of our village’s approximately 11,000 residents and various business enterprises,” John Montone, superintendent of the Solvay Electric Department, said.  “The additional power supply will lessen exposure to fluctuating prices in the wholesale electricity marketplace for that portion of our power purchases beyond the low-cost NYPA hydropower that our municipal electric system receives as a preference customer under federal law.  I want to thank the Power Authority for spearheading the RFP process and securing the most favorable economic arrangements possible for helping to meet the long-term energy needs of our residents and businesses.”

The Power Authority Board of Trustees Tuesday authorized an agreement between NYPA and Albany Energy for purchase of 7.2 megawatts (mw) of electricity from three waste-gas generating facilities at the Albany Landfill at 525 Rapp Rd.  The facilities, including one that is expected to go into service next year, will provide a dedicated supply of electricity for Solvay from internal combustion engines that harness methane captured from landfill gas to produce power. 

The Master Power Purchase and Sale Agreement is for seven years beginning with the April 1, 2011 scheduled operational date of Albany Energy’s newest landfill gas facility.  NYPA also secured an option to extend the purchase agreement for an additional 10 years beyond the initial period.

Solvay, in the Town of Geddes, has the largest power demand of the 12 community-owned electric systems in the state for which the Power Authority meets the full electricity requirements with hydropower and economical power purchases from other sources. For Solvay, the hydropower accounts for approximately 60 percent of its electricity needs. 

The other 39 municipal electric systems and cooperatives are partial-requirement customers that rely on other power suppliers for their incremental power needs, outside of the hydropower they receive for the bulk of their energy requirements. The hydropower for the full- and partial-requirement customers is from a block of 752 megawatts (mw) of Preference Power from NYPA’s Niagara Power Project near Niagara Falls. The power, sold without markup at about one cent per kilowatt-hour, is some of the lowest cost electricity in the state.

With an above-average proportion of energy-intensive manufacturing facilities in the Solvay Electric Department’s service area, the village requires incremental power throughout the year, in addition to the 55 mw of hydropower that it benefits from. The year-round use of incremental power differs from most of the other full-service requirement customers whose supplemental power needs are less constant. 

The waste gas-fueled power to be purchased on Solvay’s behalf from Albany Energy qualifies as renewable power under the state’s Renewable Portfolio Standard—a policy that seeks to increase the proportion of renewable electricity used by retail customers. Landfill gas is continuously restored from naturally-occurring chemical reactions and microbes acting upon the waste in landfills, making it a renewable source of energy. Currently, about 21 percent of the state’s power is from renewable sources.

One of the benefits of waste gas-to-energy facilities is that they reduce greenhouse gas emissions by harnessing methane, which is far more potent in trapping heat in the atmosphere than carbon dioxide, a more abundant greenhouse gas.

The Power Authority issued its RFP for Solvay last September.  NYPA currently purchases the incremental power for the village in the day-ahead market, a wholesale electricity market administered by the New York Independent System Operator (NYISO), in which electricity is auctioned and scheduled one day prior to use.  (The NYISO is a not-for-profit organization that manages New York’s bulk electricity grid.)

The relationship between the Power Authority and Solvay also extends to energy efficiency and introduction of other clean energy applications.  That includes the village’s participation in NYPA’s Weatherization Blitz Program, an initiative for reducing the heating costs of lower-income residents in areas served by the municipal electric and rural cooperative systems.  It involved the distribution of free kits with implements such as caulking, weather-stripping, low-flow showerheads and energy-efficient lighting, for cutting back on electricity use.

NYPA has also sponsored a Solar Incentive Program for Solvay and other munis and coops for the Authority’s payment of approximately half of the installed cost of solar photovoltaic (PV) installations for residential, commercial and municipal facilities. It has also provided financial support and other assistance for the community-owned electric systems’ use of clean electric-drive vehicles.  For Solvay, the vehicles have included hybrid-electric bucket and pickup trucks, for maintaining the village’s electric system. 

The Power Authority meets the electricity needs of the state’s municipal electric systems and rural cooperatives under a comprehensive agreement concluded with the systems in 2003.  The agreement, which also addresses various areas of mutual interest including economic development, energy efficiency and electric-drive transportation, runs through September 2025.

About NYPA:

■ The New York Power Authority uses no tax money or state credit. It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity. ■ NYPA is a leader in promoting energy efficiency, new energy technologies and electric transportation initiatives. ■ It is the nation's largest state public power organization, with 17 generating facilities in various parts of New York State and more than 1,400 circuit-miles of transmission lines. ■ Approximately 80 percent of the electricity it produces is clean renewable hydropower.  Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state. ■For more information, www.nypa.gov.


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