Competitive Power Ventures, Inc. - Energy Highway

CPV VALLEY ENERGY CENTER
Financial Plan section above to eliminate the risk of rising construction and equipment costs or
interest rates.
In addition, there is a risk that natural gas prices will rise from their current projected levels. This
would affect the cost of electricity produced by CPV Valley. However, by building CPV Valley, a highly
efficient electric generating facility, New York is in fact increasing the overall New York market’s
efficiency of producing electricity from natural gas and therefore dampening the effect of any
increase in natural gas prices.
8.6 Anticipated Incentives
PILOT arrangements are customary incentive of economic development and large projects of this
nature. CPV Valley has made an application to the Orange County IDA regarding entering into a PILOT
arrangement and is seeking to structure a PILOT for the Project.
8.7 Options to Reduce Pricing & Pricing Uncertainty
Cost of construction and equipment price escalation as well as interest rate changes can be reduced
by acting decisively. As for reducing natural gas price uncertainty, CPV Valley is willing to work with
New York State in securing a long-term fixed-price arrangement for natural gas supply. Natural gas
producers are entering into agreements that lock in the natural gas supply and associated price for
terms of 10 to 15-years. CPV Valley would be pleased to work with the state to explore a structure
whereby the price of natural gas could be secured through a producer arrangement over a specified
period in conjunction with an off-take agreement for CPV Valley. During the term, the associated
energy produced would be tied to the known natural gas price, thereby providing price certainty.
9.0 Environmental
9.1 Environmental Benefits to the Region
CPV Valley is a state of the art generation facility that will be equipped with emissions control
technology and design features to maximize environmental benefits. As discussed previously, the
high efficiency of CPV Valley will displace older, less environmental friendly generation, which will
reduce air emissions and improve New York’s air quality. CPV Valley will use natural gas as the
primary fuel, which is a clean burning fuel source, and will have fewer emissions than other traditional
dispatchable generation technologies. In addition to the significant reductions in greenhouse gases,
the Project design includes the use of an air-cooled condenser, which drastically reduces the volume
of water needed for cooling. The relatively minor volume of water that is needed will be treated gray
water from the City of Middletown’s waste water treatment facility. Other environmental factors
were considered in the design, such as the location of the facility on the project site. The Project was
located in an area to minimize impacts to existing wetlands and to preserve the existing conditions of
the used portions of the project site.
9.2 Projected Reductions in Greenhouse Gases
Due to its high efficiency, the operation of CPV Valley will result in a reduction of greenhouse gases
(CO 2 ) in excess of 4 million tons over the first sixteen years of the Project’s operating life. When
coupled with the Transmission Enhanced Option, CPV Valley will further reduce the volume of CO 2 in
the area resulting in an improvement of nearly 8.4 million tons over the first 16 years of the Project’s
operating life.
9.3 Wetland, Stream, Forests & Natural Area Impacts
The Project has been designed to minimize and/or avoid impacts to wetlands to the maximum extent
practicable. Through the permitting process, CPV worked with the NYSDEC and ACOE to assess
potential impacts to wetlands. While the design of the facility and its location were selected to avoid
New York Energy Highway
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