GenOn Energy, Inc. _ Bowline 3 and Lovett ... - Energy Highway
GenOn Energy, Inc. _ Bowline 3 and Lovett ... - Energy Highway
GenOn Energy, Inc. _ Bowline 3 and Lovett ... - Energy Highway
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Response to<br />
new yoRK eneRGy hIGhway<br />
Request foR InfoRmatIon<br />
BY GENON ENERGY, INC.<br />
MAY 30, 2012<br />
WWW.GENONBOWLINE.COM
Contents<br />
Introduction<br />
Required Information<br />
Respondent Information<br />
Project Description – <strong>Bowline</strong> 3 Generation Project<br />
Project Justification<br />
Financial<br />
Permit/Approval Process<br />
Other Considerations if Applicable<br />
Additional Information<br />
Property<br />
Projected In-Service Date <strong>and</strong> Project Schedule<br />
Interconnection<br />
Technical<br />
Construction<br />
Operational<br />
Socio-Economic<br />
Financial<br />
Environmental<br />
Project Contract / Request for Proposal (RFP) Status<br />
Public Outreach <strong>and</strong> Stakeholder Engagement<br />
Appendix<br />
Appendix A: <strong>Bowline</strong> site--current aerial overview photo<br />
Appendix B: <strong>Bowline</strong> 3 Construction Site – Current Aerial Photo<br />
Appendix C: Conceptual Layout of <strong>Bowline</strong> 3<br />
Appendix D: Conceptual <strong>Bowline</strong> 3 – Facility Profile<br />
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Introduction<br />
<strong>GenOn</strong> <strong>Energy</strong>, <strong>Inc</strong>. (“<strong>GenOn</strong>”) through one of its indirect subsidiaries is pleased to<br />
participate in the State of new York’s <strong>Energy</strong> <strong>Highway</strong> Request for Information (“RFI”).<br />
<strong>GenOn</strong> intends to offer attractive solutions to new York’s energy challenges. Our proposal<br />
focuses on developing a clean generating power project at our existing <strong>GenOn</strong> <strong>Bowline</strong><br />
Station, a brownfield site in Haverstraw, new York. In addition to our proposal for the<br />
<strong>Bowline</strong> site, we are eager to work with new York to also develop a project at our <strong>GenOn</strong><br />
<strong>Lovett</strong> location, a developable brownfield site in Stony Point, new York.<br />
Each of these sites is located near existing interconnection infrastructure <strong>and</strong> is ideal for<br />
serving the energy needs of the downstate <strong>and</strong> Lower Hudson Valley regions. Both <strong>Bowline</strong><br />
<strong>and</strong> <strong>Lovett</strong> present unique opportunities to deliver safe, affordable, <strong>and</strong> reliable energy<br />
for new York State. we are willing to tailor our projects to meet the needs of the State <strong>and</strong><br />
look forward to engaging in a partnership that will serve the interests of the State with our<br />
projects.<br />
Required Information<br />
Respondent InfoRmatIon<br />
<strong>GenOn</strong> <strong>Energy</strong>, <strong>Inc</strong>. (nYSE: GEn) is one of the largest competitive generators of wholesale<br />
electricity in the United States, with power generation facilities located in key regions of<br />
the country <strong>and</strong> a generation portfolio of approximately 23,700 megawatts. <strong>GenOn</strong> has<br />
approximately 3,400 employees <strong>and</strong> is headquartered in Houston, Texas.<br />
<strong>GenOn</strong>’s portfolio of power generation facilities consists of 47 stations in 12 U.S. states<br />
<strong>and</strong> includes baseload, intermediate <strong>and</strong> peaking units using coal, natural gas <strong>and</strong> oil to<br />
generate electricity. The company has owned <strong>and</strong> operated electric generation facilities<br />
in the state of new York since 1999. Currently, <strong>GenOn</strong> owns <strong>and</strong> operates the <strong>Bowline</strong><br />
generation facility in Haverstraw, new York, which consists of two natural gas/oil units<br />
with a combined nominal capacity of 1,139 mw <strong>and</strong> owns the <strong>Lovett</strong> site located in<br />
Stony Point, new York.<br />
maintaining a strong organizational focus on safety <strong>and</strong> the environment is a core value<br />
at <strong>GenOn</strong>. The company is committed to a fleetwide "Zero <strong>Inc</strong>ident Culture” <strong>and</strong> strives<br />
to ensure that appropriate resources <strong>and</strong> training are provided at all levels of the enterprise<br />
in order to consistently achieve industry-leading safety performance. <strong>GenOn</strong><br />
uses a comprehensive environmental management system, integrating environmental<br />
considerations into business operations <strong>and</strong> strategy. The company fosters a culture<br />
of continuous improvement, always driving for better, more effective, more efficient<br />
environmental performance.<br />
<strong>GenOn</strong> possesses significant experience <strong>and</strong> capabilities in the development of new power<br />
generation stations. Since the late 1990s, <strong>GenOn</strong> has successfully developed over 12,000<br />
megawatts of natural gas-fired simple cycle <strong>and</strong> combined cycle power generation facilities<br />
throughout the United States. <strong>GenOn</strong>’s development capabilities are comprehensive <strong>and</strong><br />
include permitting, engineering, procurement <strong>and</strong> construction (EPC) management,<br />
project financing, <strong>and</strong> plant operations. The company also has extensive experience with<br />
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a wide range of power generation technologies (e.g., GE, Siemens, mitsubishi, <strong>and</strong> Alstom)<br />
<strong>and</strong> both wet <strong>and</strong> dry cooling equipment. <strong>GenOn</strong> has successfully developed power<br />
plants on greenfield sites as well as redeveloped existing brownfield sites to host new<br />
generation assets.<br />
A recent example of <strong>GenOn</strong>’s brownfield development experience is the marsh L<strong>and</strong>ing<br />
Generating Station located just outside of San Francisco, California. This 760 megawatt<br />
peaking facility is being built near <strong>GenOn</strong>’s existing Contra Costa generating units, which<br />
are scheduled for retirement in 2013. This brownfield development project was specifically<br />
designed to maximize the use of existing site infrastructure such as natural gas pipelines<br />
<strong>and</strong> electric transmission lines, enabling the state of California to preserve greenfield sites<br />
for other development needs or as open space.<br />
marsh L<strong>and</strong>ing's output is fully contracted to California utility Pacific Gas <strong>and</strong> Electric<br />
Company (PG&E) under a long-term tolling agreement. The project benefited from a very<br />
efficient development <strong>and</strong> permitting schedule, with less than 2 1/2 years from the initial<br />
permit application to the start of construction. This highly successful project included full<br />
permitting as well as contracting for procurement of power isl<strong>and</strong> equipment <strong>and</strong> fullwrap,<br />
fixed-price EPC services. The estimated cost of the marsh L<strong>and</strong>ing project is approximately<br />
$700 million. Funding for the project consisted of a combination of <strong>GenOn</strong> equity<br />
<strong>and</strong> a bank debt facility arranged by <strong>GenOn</strong>.<br />
Questions or requests for additional information regarding this <strong>Energy</strong> <strong>Highway</strong> RFI<br />
response document may be addressed to:<br />
mr. Gary Kubik<br />
Vice President northeast<br />
<strong>GenOn</strong> <strong>Energy</strong>, <strong>Inc</strong>.<br />
President<br />
<strong>GenOn</strong> <strong>Bowline</strong>, LLC<br />
140 Samsondale Avenue<br />
west Haverstraw, new York 10993<br />
(832) 357-6977<br />
gary.kubik@genon.com<br />
pRoject descRIptIon – BowlIne 3 GeneRatIon pRoject<br />
<strong>GenOn</strong> is pleased to submit for consideration as part of new York’s <strong>Energy</strong> <strong>Highway</strong> initiative<br />
our proposal for "Clean Gen on the Hudson" – – the <strong>Bowline</strong> 3 generation project.<br />
Upon the finalization of commercial arrangements with the State, <strong>and</strong> the construction<br />
that would follow, <strong>Bowline</strong> 3 will be a highly efficient, clean, 2 x 1 combined cycle gas<br />
turbine (CCGT) electric generating station in the town of Haverstraw, new York (Rockl<strong>and</strong><br />
County, nYISO Zone G). The capacity of this new facility will be approximately 775 mw<br />
(ISO). <strong>Bowline</strong> 3 is a brownfield development project that will be built adjacent to<br />
existing <strong>Bowline</strong> Units 1 <strong>and</strong> 2 on approximately 25 acres of previously-cleared l<strong>and</strong>.<br />
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The <strong>Bowline</strong> 3 CCGT will use efficient combustion turbine technology <strong>and</strong> will have state-<br />
of-the-art emissions control equipment. The primary fuel for <strong>Bowline</strong> 3 will be natural gas.<br />
If desired, <strong>Bowline</strong> 3 could utilize ultra-low sulfur #2 diesel fuel as a backup fuel source.<br />
natural gas will be delivered to <strong>Bowline</strong> 3 via an existing 4.2 miles of 24-inch diameter<br />
natural gas pipeline lateral, which connects directly to the millennium pipeline. The pipeline<br />
lateral is capable of delivering 12,000 mmBtus of natural gas per hour to <strong>Bowline</strong>,<br />
which is more than sufficient to support operation of the planned new unit.<br />
<strong>Bowline</strong> 3 will use a state-of-the-art Air Cooled Condenser (ACC) unit to h<strong>and</strong>le the<br />
cooling portion of its steam cycle. Air cooling will reduce overall plant water requirements<br />
by approximately 95% when compared to traditional wet cooling. <strong>Bowline</strong> 3 will not require<br />
intake structures on, nor require water from, the Hudson River. Consumptive water used<br />
by <strong>Bowline</strong> 3 will be obtained via available local supplies.<br />
Safe <strong>and</strong> affordable electricity generated by the <strong>Bowline</strong> 3 facility will be delivered to the<br />
grid via a 345 kV transmission line. This new line, approximately 7 miles in length, will commence<br />
at the existing <strong>Bowline</strong> switchyard <strong>and</strong> will be constructed on l<strong>and</strong> or easements<br />
owned by <strong>GenOn</strong> as well as utility rights-of-way owned by Orange & Rockl<strong>and</strong> (O&R). The<br />
line will connect to the bulk electric grid at O&R’s Ladentown substation located in the<br />
town of Ramapo, nY.<br />
A key attribute of <strong>Bowline</strong> 3 is its emphasis on brownfield development. The project will<br />
repower the current <strong>Bowline</strong> facility through the extensive reuse of existing <strong>and</strong> unutilized<br />
assets, including:<br />
• A previously-cleared, shovel-ready site immediately adjacent to the existing<br />
• <strong>Bowline</strong> generation units;<br />
• A 24-inch natural gas pipeline lateral;<br />
• A river terminal facility for delivery of ultra-low sulfur diesel #2 fuel oil to the facility via<br />
marine barge (if a dual fuel option is desired);<br />
• A fuel oil storage tank for on-site storage of up to 140,000 barrels of ultra-low sulfur<br />
diesel #2 fuel oil (if a dual fuel option is desired);<br />
• L<strong>and</strong> <strong>and</strong> easements owned by <strong>GenOn</strong> as well as existing utility rights-of-way for<br />
transmission interconnection;<br />
• NOx <strong>and</strong> VOC emissions reduction credits (ERCs) in <strong>GenOn</strong>’s current inventory to<br />
support the operation of the new <strong>Bowline</strong> 3 facility plus a pending application for Pm<br />
2.5 ERCs to complete the portfolio of ERCs required for the issuance of an air permit<br />
for the <strong>Bowline</strong> 3 project.<br />
The actual project schedule <strong>and</strong> estimated in-service date for <strong>Bowline</strong> 3 will be driven<br />
by the Governor's <strong>Energy</strong> <strong>Highway</strong> process. <strong>GenOn</strong> is confident that <strong>Bowline</strong> 3 can be<br />
online within 3 ½ years of receipt of final regulatory <strong>and</strong> contractual approvals. <strong>GenOn</strong><br />
recognizes an opportunity for public-private collaboration to secure the future of<br />
this project.<br />
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<strong>GenOn</strong> will procure state-of-the-art combustion turbines, heat recovery steam generators,<br />
steam turbine, air cooled condenser, <strong>and</strong> balance-of-plant equipment for the construction<br />
of <strong>Bowline</strong> 3. These technologies are widely available in the marketplace <strong>and</strong> have strong,<br />
well-documented performance track records. <strong>GenOn</strong> will seek to utilize qualified providers<br />
of equipment, materials <strong>and</strong> services located in the new York State region where possible<br />
<strong>and</strong> practical.<br />
pRoject justIfIcatIon<br />
<strong>Bowline</strong> 3 addresses key objectives <strong>and</strong> goals of the new York <strong>Energy</strong> <strong>Highway</strong> initiative as<br />
enumerated in the RFI.<br />
1. OBJECTIVE: Reduce constraints on the flow of electricity to, <strong>and</strong> within, the downstate<br />
area; <strong>and</strong> exp<strong>and</strong> the diversity of power generation sources supplying downstate.<br />
Assure that long-term reliability of the electric system is maintained in the face of<br />
major system uncertainties.<br />
Downstate new York, <strong>and</strong> the Lower Hudson Valley in particular, faces the possibility<br />
of significant near-term retirements of generating capacity due to weak market con-<br />
ditions <strong>and</strong> pending environmental regulations. These retirements threaten to jeopardize<br />
electric grid reliability in this critically important region of new York's bulk electrical<br />
system. <strong>Bowline</strong> 3, as an efficient CCGT facility capable of operating at a high<br />
capacity factor, will provide the replacement voltage support <strong>and</strong> power necessary to<br />
deliver safe <strong>and</strong> affordable grid reliability in the Lower Hudson Valley region. maintaining<br />
voltage levels in the Lower Hudson Valley is critical to optimizing new York’s ability<br />
to transfer energy efficiently to, <strong>and</strong> within, the downstate region, which is the largest<br />
driver of the statewide economy.<br />
2. OBJECTIVE: Encourage development of utility-scale renewable generation resources<br />
throughout the State.<br />
As new York adds more renewable generation, the intermittent nature of these power<br />
resources will create challenges for system operators seeking to maintain a constant<br />
balance between load <strong>and</strong> generation. In this instance, the burden of maintaining<br />
system reliability will fall increasingly on the flexible operation of well-located thermal<br />
generation units. <strong>Bowline</strong> 3, as a state-of-the-art CCGT unit, will provide operational<br />
flexibility <strong>and</strong> load-following capability that will contribute to safe <strong>and</strong> affordable grid<br />
reliability <strong>and</strong> facilitate the transfer of renewable energy to the downstate region. This<br />
capability will be especially critical if high capacity factor, baseload generation units<br />
currently serving the downstate region are removed from the generation mix.<br />
3. OBJECTIVE: <strong>Inc</strong>rease efficiency of power generation, especially in densely populated<br />
urban areas.<br />
As a CCGT unit with an ISO heat rate of approximately 6,800 mmBtu/kwh <strong>and</strong> designed<br />
to burn low-cost natural gas, <strong>Bowline</strong> 3 will be much more efficient <strong>and</strong> environmentally<br />
friendly than the older, less efficient gas/oil boiler units, which constitute<br />
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a large proportion of the downstate generation fleet. <strong>Bowline</strong> 3’s streamlined permitting<br />
status <strong>and</strong> high capacity factor operation will allow for the displacement or later<br />
re-powering of older, less efficient units, including those located in densely populated<br />
urban areas, <strong>and</strong> result in lower overall emission levels in new York. moreover, as a<br />
brownfield development project, <strong>Bowline</strong> 3 will be an efficient <strong>and</strong> cost-effective alternative<br />
to the development of new sites <strong>and</strong> requisite interconnections in congested<br />
urban <strong>and</strong> suburban areas as well as to the long-distance delivery of energy over<br />
already-congested transmission lines.<br />
4. OBJECTIVE: Create jobs <strong>and</strong> opportunities for new Yorkers.<br />
<strong>Bowline</strong> 3 is expected to create 700 skilled construction jobs <strong>and</strong> approximately 25<br />
high-quality, permanent jobs for personnel to operate the plant once it is completed.<br />
The project will also support hundreds of local jobs among vendors <strong>and</strong> suppliers.<br />
In addition, <strong>Bowline</strong> 3 will play an integral role in securing safe <strong>and</strong> affordable grid<br />
reliability for the region, spurring additional job creation <strong>and</strong> economic development.<br />
5. OBJECTIVE: Contribute to an environmentally sustainable future for new York State.<br />
<strong>Bowline</strong> 3 will be outfitted with state-of-the-art technology designed to protect<br />
environmental quality for Haverstraw, the region <strong>and</strong> the Hudson River. The integration<br />
of air cooling technology will eliminate any environmental impact on the Hudson River<br />
<strong>and</strong> reduce overall plant water requirements by approximately 95% when compared<br />
to traditional wet cooling. In addition, highly-efficient, clean, state-of-the-art combustion<br />
turbine generation technology will be minimally impactful on local air quality.<br />
Brownfield development projects such as <strong>Bowline</strong> 3, by definition, minimize impacts<br />
on the environment <strong>and</strong> the surrounding community.<br />
fInancIal<br />
<strong>GenOn</strong> intends to fund <strong>Bowline</strong> 3 with a combination of equity <strong>and</strong> long-term project<br />
financing debt. Given this, the commercial arrangements must allow for the project to be<br />
financeable. To construct <strong>Bowline</strong> 3, <strong>GenOn</strong> will procure state-of-the-art technologies <strong>and</strong><br />
EPC services from leading manufacturers <strong>and</strong> providers. Equipment <strong>and</strong> services of this<br />
type are long lead time items <strong>and</strong> must be ordered well in advance of breaking ground.<br />
Having developed <strong>and</strong> constructed over 12,000 mw of gas-fired power plants in the United<br />
States, <strong>GenOn</strong> is very experienced in managing the price <strong>and</strong> schedule risks typically<br />
associated with complex infrastructure construction projects.<br />
peRmIt/appRoval pRocess<br />
<strong>GenOn</strong> has made significant progress in its permitting effort for <strong>Bowline</strong> 3 <strong>and</strong> is actively<br />
carrying forward efforts to reflect design enhancements that will improve the environmental<br />
qualities of the project. These enhancements include improved turbine technology<br />
<strong>and</strong> converting from wet cooling to dry cooling. Because <strong>Bowline</strong> 3 has progressed favorably<br />
with the State <strong>and</strong> because the proposed changes benefit the environment, <strong>GenOn</strong><br />
believes <strong>Bowline</strong> 3 will not face material permitting uncertainties <strong>and</strong> can quickly satisfy<br />
State permitting requirements.<br />
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Substantive local permitting provisions will be addressed with the Article X Certificate.<br />
Finally, <strong>GenOn</strong> will pursue required federal permits, if any.<br />
otheR consIdeRatIons If applIcaBle<br />
nYISO Transmission Queue: <strong>GenOn</strong> has recently submitted to new York Independent<br />
System Operator (nYISO) an application to connect <strong>Bowline</strong> 3 to the new York transmission<br />
grid. we are concerned that the many uncertainties currently facing new York's electrical<br />
system (e.g., pending generator retirements <strong>and</strong> proposed upgrades to the nYISO<br />
transmission system) may complicate nYISO’s ability to evaluate the impact of interconnecting<br />
new generation projects. <strong>GenOn</strong> is requesting close <strong>and</strong> careful coordination<br />
between Governor Cuomo's <strong>Energy</strong> <strong>Highway</strong> Task Force <strong>and</strong> nYISO in order to ensure<br />
that the potential transmission system impacts of high-potential projects currently in<br />
the transmission queue are able to be evaluated in a timely fashion.<br />
new Generation at <strong>Lovett</strong> Site: The information in this RFI response addresses the potential<br />
for new generation at <strong>GenOn</strong>’s existing <strong>Bowline</strong> site. In addition, <strong>GenOn</strong> is evaluating several<br />
options for the addition of new generation at the <strong>GenOn</strong> <strong>Lovett</strong> site. The <strong>Lovett</strong> site is<br />
on the Hudson River in Stony Point, new York approximately 5 miles north of <strong>Bowline</strong>. Formerly<br />
the site of coal <strong>and</strong> natural gas generation units, <strong>Lovett</strong> is now a completely cleared<br />
brownfield site consisting of approximately 58 developable acres. The site is located on the<br />
high dem<strong>and</strong> side of major new York transmission constraints <strong>and</strong> is close to major natural<br />
gas pipelines <strong>and</strong> electric transmission lines. Overall, <strong>Lovett</strong> is a highly attractive location<br />
for the construction of new generating units, <strong>and</strong> <strong>GenOn</strong> is evaluating which of several new<br />
generation configurations (e.g., combined cycle or peaking units) it will seek to permit at<br />
<strong>Lovett</strong>. <strong>GenOn</strong> welcomes the opportunity to discuss with new York officials the type of new<br />
generation at <strong>Lovett</strong> that will best fit the needs of the <strong>Energy</strong> <strong>Highway</strong> initiative.<br />
Recommended Evaluation Criteria: In order to provide maximum benefit to new York<br />
energy consumers, we recommend that the State of new York, when evaluating projects<br />
for inclusion in the <strong>Energy</strong> <strong>Highway</strong> initiative, give priority consideration to projects that<br />
demonstrate the following characteristics:<br />
1. Emphasis on brownfield development – Projects that use existing power generation<br />
sites, gas <strong>and</strong> electric transmission infrastructure <strong>and</strong> rights-of-way, emissions<br />
credits, <strong>and</strong> fuel supply <strong>and</strong> storage infrastructure will enable the state of new York<br />
to achieve the goals of the <strong>Energy</strong> <strong>Highway</strong> initiative in a manner that is cost-effective,<br />
low risk, <strong>and</strong> minimally impactful on local communities <strong>and</strong> the environment.<br />
2. High executability – The new York <strong>Energy</strong> <strong>Highway</strong> initiative seeks to identify projects<br />
that can provide reliable power to the state's consumers for the next half-century. As<br />
such, new York should prioritize projects that:<br />
a. Rely on proven, widely available technologies;<br />
b. Are backed by financially-sound <strong>and</strong> committed sponsors with a proven track<br />
record of permitting, constructing, financing, owning, <strong>and</strong> operating similar<br />
projects; <strong>and</strong><br />
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c. Provide certainty of execution that result from the presence of existing site<br />
infrastructure, the availability of gas <strong>and</strong> electric interconnections, <strong>and</strong> a<br />
beneficial location within the transmission system.<br />
3.<br />
Capable developers, operators <strong>and</strong> owners – A key goal of the <strong>Energy</strong> <strong>Highway</strong> initiative<br />
is to maximize the role of private investment in developing new energy infrastructure<br />
in new York. In general, new York should seek to partner with private companies<br />
that possess strong balance sheets, have excellent reputations within the banking<br />
community, <strong>and</strong> are willing to <strong>and</strong> capable of making financial commitments to the<br />
projects that they propose for inclusion in the <strong>Energy</strong> <strong>Highway</strong> initiative.<br />
Additional Information<br />
pRopeRty<br />
The site on which <strong>Bowline</strong> 3 will be constructed is part of the existing <strong>Bowline</strong> generation<br />
facility <strong>and</strong> is owned by a wholly-owned, indirect subsidiary of <strong>GenOn</strong> <strong>Energy</strong>, <strong>Inc</strong>.<br />
In general, the <strong>Bowline</strong> 3 site is ideally suited for large-scale construction <strong>and</strong> efficient<br />
operations that minimize the facility’s impact on neighboring communities given the<br />
following site characteristics:<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
The <strong>Bowline</strong> 3 site has already been cleared, which will allow for the immediate<br />
commencement of foundation <strong>and</strong> other construction-related work;<br />
marine barges carrying heavy equipment have easy access to the site given<br />
<strong>Bowline</strong> 3’s direct frontage on the Hudson River;<br />
The plant’s existing bulkhead dock on <strong>Bowline</strong> Pond (which opens directly to the<br />
Hudson River) allows for safe, efficient unloading of heavy equipment delivered to the<br />
site via marine barge;<br />
<strong>Bowline</strong> 3 is located within 1 mile of csX rail siding, which provides an additional<br />
means of delivering other equipment to the site;<br />
Fuel is supplied to the site by an existing, fully permitted, 24 inch natural gas pipeline<br />
on property either owned by <strong>GenOn</strong> or part of existing utility rights of ways or easements<br />
granted to <strong>GenOn</strong>; <strong>and</strong><br />
Power from the site can be delivered to the electrical grid via a 345 kV transmission<br />
interconnect to be constructed on property either owned by <strong>GenOn</strong> or part of<br />
existing utility rights of ways or easements granted to <strong>GenOn</strong>.<br />
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pRojected In-seRvIce date <strong>and</strong> pRoject schedule<br />
The actual project schedule <strong>and</strong> estimated in-service date for <strong>Bowline</strong> 3 will be driven by<br />
the time frame of the <strong>Energy</strong> <strong>Highway</strong> process <strong>and</strong> achieving all regulatory <strong>and</strong> contractual<br />
approvals. The indicative schedule below is based on <strong>GenOn</strong>’s recent development experience<br />
with new generating units of similar size <strong>and</strong> technology as <strong>Bowline</strong> 3. The schedule<br />
demonstrates that all required steps to reaching commercial operation of <strong>Bowline</strong> 3,<br />
including project financing, will be achieved within 3 1/2 years of final regulatory <strong>and</strong><br />
contractual approvals.<br />
BowlIne 3–IndIcatIve schedule<br />
Regulatory/contractual approvals<br />
financing<br />
finalize engineering & order equipment<br />
construction<br />
testing <strong>and</strong> commissioning<br />
commercial operations<br />
InteRconnectIon<br />
Connecting the highly efficient <strong>Bowline</strong> 3 to the electrical grid at a location that is on the<br />
high-dem<strong>and</strong>, high-price side of major new York transmission system constraints (e.g.,<br />
the East-west <strong>and</strong> UPnY-SEnY interfaces) will provide economic benefits to new York<br />
consumers <strong>and</strong> will mitigate reliability impacts that may result from generator retirements<br />
in downstate new York in general <strong>and</strong> in the Lower Hudson Valley in particular. <strong>GenOn</strong> also<br />
believes that connecting to the grid downstream of major points of constraint will minimize<br />
overall system upgrade costs required to make <strong>Bowline</strong> 3’s energy <strong>and</strong> capacity deliverable<br />
to the bulk electric system.<br />
technIcal<br />
As is customary for high-value projects of this nature, <strong>GenOn</strong> will seek comprehensive warranties<br />
for two years or more on all equipment, materials, <strong>and</strong> workmanship utilized during<br />
the construction process. The anticipated design life of CCGT facilities such as <strong>Bowline</strong> 3 is<br />
at least 30 years.<br />
constRuctIon<br />
<strong>GenOn</strong> development projects typically provide attractive opportunities for local manufacturers,<br />
assemblers, construction firms, <strong>and</strong> workers. <strong>GenOn</strong> will seek to utilize qualified<br />
providers of equipment, materials, <strong>and</strong> services located in the new York State region where<br />
possible <strong>and</strong> practical.<br />
To facilitate the financing of a project such as <strong>Bowline</strong> 3, <strong>GenOn</strong> typically seeks to execute<br />
a full-wrap, fixed-price, date-certain, turnkey EPC contract with an experienced, nationally<br />
recognized firm. This type of contract benefits project owners <strong>and</strong> lenders because it<br />
provides an attractive combination of cost efficiency, schedule certainty, <strong>and</strong> performance<br />
guarantees.<br />
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Having owned <strong>and</strong> operated electric generation facilities in new York since 1999, <strong>GenOn</strong> is<br />
very familiar with issues related to the local availability of labor, materials, <strong>and</strong> installation<br />
equipment. In general, we anticipate that the <strong>Bowline</strong> 3 project will be built utilizing a skilled<br />
unionized workforce in a manner similar to other construction projects that <strong>GenOn</strong> is<br />
currently executing in other parts of the country. Depending on market conditions at<br />
the time construction commences, we believe that skilled, unionized labor will be available<br />
in sufficient quantities, either locally or from neighboring regions, to execute the project<br />
in a cost-effective <strong>and</strong> timely manner. <strong>GenOn</strong> historically has enjoyed good relations with<br />
building <strong>and</strong> construction trades groups. The ongoing construction of the company’s<br />
marsh L<strong>and</strong>ing plant in California, for example, has benefited substantially from the highlyproductive,<br />
quality-focused efforts of numerous building <strong>and</strong> construction trades groups<br />
working on the project.<br />
opeRatIonal<br />
<strong>GenOn</strong> has significant experience with the ownership <strong>and</strong> operation of power generation<br />
facilities that contain explicit guarantees related to project availability <strong>and</strong> performance.<br />
Although <strong>GenOn</strong> is not yet aware of the exact structure that new York will offer in support<br />
of <strong>Energy</strong> <strong>Highway</strong> projects, it is our expectation that such structures will require <strong>Bowline</strong> 3<br />
to operate at a high level of availability <strong>and</strong> performance.<br />
<strong>GenOn</strong> has a strong, company-wide commitment to safety. we promote a safe <strong>and</strong> healthful<br />
work environment, communicate safety issues, use safe work practices <strong>and</strong> provide<br />
ongoing safety training for our employees. For both construction projects <strong>and</strong> plant operations,<br />
<strong>GenOn</strong> maintains a comprehensive safety program <strong>and</strong> manual that together set a<br />
high st<strong>and</strong>ard for safety. In addition, we require that all our contractors commit to a set of<br />
safety procedures that are at least as rigorous <strong>and</strong> comprehensive as our own.<br />
<strong>Bowline</strong> 3 will also maintain a comprehensive plan for addressing emergency situations. In<br />
addition, we expect to contract with local entities to provide emergency response services<br />
to the plant.<br />
socIo-economIc<br />
The construction <strong>and</strong> operation of major infrastructure projects such as <strong>Bowline</strong> 3 typically<br />
provide a variety of economic benefits to the communities in which they are located.<br />
These benefits typically include the provision of well-paying jobs, tax revenue, <strong>and</strong> other<br />
forms of associated community benefits <strong>and</strong> economic development.<br />
Although construction plans remain to be finalized, projects of similar size <strong>and</strong> type as<br />
<strong>Bowline</strong> 3 are capable of creating up to 700 skilled construction jobs during the plant<br />
construction period <strong>and</strong> up to 25 high-quality, permanent jobs for personnel to operate the<br />
plant once it is completed. In addition, <strong>Bowline</strong> 3 will support hundreds of other local jobs<br />
among vendors <strong>and</strong> suppliers.<br />
As is typical for projects of this type, <strong>GenOn</strong> will seek to negotiate a PILOT (Payment in Lieu<br />
of Taxes) agreement that will represent a long-term source of revenue for the town government<br />
<strong>and</strong> the local school district. Besides assisting the local community by maintaining a<br />
stable tax base, a PILOT agreement is required to stabilize the project’s long-term operating<br />
costs, which in turn is a prerequisite for <strong>GenOn</strong> to arrange a debt financing package for<br />
the project.<br />
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As part of the <strong>Bowline</strong> 3 project, <strong>GenOn</strong> will seek to continue its past track record of being<br />
an active <strong>and</strong> engaged community partner. <strong>Bowline</strong> Generation Station employees currently<br />
volunteer time <strong>and</strong> provide financial support to several community causes in Rockl<strong>and</strong><br />
County. These meaningful contributions will continue to benefit local organizations<br />
whose work advances <strong>and</strong>/or promotes health, welfare, education, economic development,<br />
or other important public interests within the local community.<br />
As a brownfield development project, <strong>Bowline</strong> 3 will minimize impacts in areas typically of<br />
concern to the local community, particularly when compared to projects utilizing greenfield<br />
sites. while we continue to investigate the impact of the proposed project, at this time<br />
<strong>GenOn</strong> does not believe that adding a third generation unit to the existing <strong>Bowline</strong> facility<br />
will have negative implications; rather, the facility will be a boon to the economic development<br />
of the area <strong>and</strong> the facility will contribute to revitalization <strong>and</strong> continued improvements<br />
in the community - the goals of a smart growth policy.<br />
fInancIal<br />
Please see the response provided under the financial heading in the "Required<br />
Information"section of this document.<br />
envIRonmental<br />
Brownfield development projects such as <strong>Bowline</strong> 3, by definition, minimize impacts on the<br />
environment <strong>and</strong> the surrounding community.<br />
From an air emissions st<strong>and</strong>point, the highly-efficient, clean, state-of-the-art combustion<br />
turbine generation technology that will be utilized by <strong>Bowline</strong> 3 will provide important<br />
environmental benefits to the surrounding region <strong>and</strong> the state of new York. Given <strong>Bowline</strong><br />
3’s high efficiency, <strong>GenOn</strong> anticipates that the plant will be dispatched ahead of older, less<br />
efficient, less clean generation units in the downstate region. This displacement of higher<br />
emissions units will constitute a net benefit to the region’s air quality. <strong>Bowline</strong> 3's CO2 performance<br />
will also exceed that of units it will displace.<br />
<strong>Bowline</strong> 3 will also benefit new York’s water resources. For example, we anticipate that<br />
<strong>Bowline</strong> 3 will displace the operation of once-through-cooled units in downstate new York.<br />
Adding to <strong>Bowline</strong> 3’s beneficial impact on water resources is the fact that the unit’s use of<br />
dry cooling will not require cooling water discharges <strong>and</strong> therefore will not produce aquatic<br />
ecology impacts to the Hudson River from such discharges.<br />
when the <strong>Bowline</strong> 3 site was cleared <strong>and</strong> prepared for construction, a small federal<br />
wetl<strong>and</strong> (which was identified as part of the U.S. Army Corps of Engineers approval) was<br />
relocated. Beyond this, <strong>GenOn</strong> expects that any additional ecological impacts will be minimal<br />
given that the site is essentially “shovel-ready.” <strong>GenOn</strong> does not anticipate that<br />
the project will require any significant additional mitigation measures.<br />
pRoject contRact / Request foR pRoposal (Rfp) status<br />
The <strong>Bowline</strong> 3 project has not been submitted to any new York State agency or authority in<br />
response to a request for proposals (RFP).<br />
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puBlIc outReach <strong>and</strong> staKeholdeR enGaGement<br />
<strong>GenOn</strong> seeks to be an active <strong>and</strong> engaged partner in all of the communities across the<br />
United States where we own <strong>and</strong> operate generation assets or seek to execute development<br />
projects. As an essential component of the <strong>Bowline</strong> 3 project, <strong>GenOn</strong> will seek to<br />
identify key stakeholder groups <strong>and</strong> affected individuals. The company will also seek to develop<br />
a comprehensive public outreach <strong>and</strong> information program designed to ensure that<br />
stakeholders underst<strong>and</strong> the important benefits that the project will provide to the state of<br />
new York <strong>and</strong> to the surrounding community. This program will provide ample opportunities<br />
for members of the public to ask questions <strong>and</strong> discuss concerns that they may have<br />
about the project.<br />
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Appendix<br />
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appendix a: <strong>Bowline</strong> site--current aerial overview photo<br />
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appendix B: <strong>Bowline</strong> 3 Construction Site – Current Aerial Photo<br />
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appendix c: Conceptual Layout of <strong>Bowline</strong> 3<br />
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appendix d: Conceptual <strong>Bowline</strong> 3 – Facility Profile<br />
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