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Clean-coal project isn't a done deal

The similarities are eerily familiar.

Gov. Pataki and local politicians gather before the assembled media and dignitaries to announce plans for a major new project, one that's great for the region and its struggling economy. The only hitch is that the final deal isn't actually done.

We heard it a little more than two years ago when Bass Pro executives started telling us just how excited they'd be to open a store in Buffalo once the details of a deal were finally worked out.

And we heard it again last week with the "conditional" choice of the Huntley Station as the site of a new $1.5 billion clean-coal power plant, just as the clock finally started to run out on the Bass Pro deal.

It was no wonder, then, that as Gov. Pataki wrapped up his news conference touting the Huntley selection, one observer turned to a union official and remarked: "I hope this doesn't turn into another Bass Pro."

He wasn't alone in thinking that, especially in a region where the stack of abandoned waterfront plans is several feet high and where the new Peace Bridge is on the same drawing board it was a decade ago. We've earned the right to be skeptical of deals that are almost done.

Still, Pataki and other local politicians went out of their way to express confidence that untold millions could be found to turn what now is a project that doesn't make economic sense into one that can generate electricity that's cheap enough for people and businesses to actually buy.

"It's about price," says Timothy S. Carey, the president and chief executive of the New York Power Authority, which will sign a long-term contract to buy the new Huntley Station's electricity if the project's costs can be brought into line.

To do that, Pataki and others are hoping the project can land some of the $650 million in federal tax credits that have been set aside for clean-coal projects. They hope to make the project eligible for tax-exempt financing that would save millions in interest costs.

"This is only the beginning of a long road to implementation," said David Crane, NRG's president and chief executive officer, who thinks the plant has a good case for federal aid. "There's no reason why Western New York should bear the burden of developing technology that will be the role model for the rest of the country," he says.

If they succeed, it could turn the Huntley Station into a powerful economic engine, providing 1,000 construction jobs and 100 full-time jobs, while also giving the state a new source of reliable electricity based on cutting-edge technology that eliminates many of the pollution issues associated with conventional coal plants.

"We believe NRG has the best proposal and the best technology," Carey says.

The other four proposals that the power authority considered, including a $1.2 billion expansion of the AES Somerset plant in Barker, suffered from the same problem that is keeping the Huntley project from being a done deal: They all were too costly to produce competitively-priced electricity. "They were all out of the money," Carey says.

So now, the region has the Huntley project on the hook, but we're still not sure if this big fish will end up being a keeper.

"We've already spent $3 million to $4 million developing this project," says Crane, who made it clear that he didn't think last week's media event was just another photo opportunity without any real substance. "We are absolutely committed to seeing this contract through."

With Bass Pro on the verge of wriggling free, it all will depend on whether the region can land millions more in tax breaks and aid to keep the Huntley project from becoming just another one that got away.

e-mail: drobinson@buffnews.com

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