The New York Power Authority next month will seek up to 500 MW of capacity to be supplied by private developers. The RFP, in development for several months, was announced shortly after a state comptroller’s audit that severely criticized NYPA’s project to construct a 500-MW gas-fired combined-cycle generation plant in Queens.

STEAMED Workers set steam turbine at criticized 500-MW NYPA powerplant in Astoria. (Photo Courtesy of NYPA)

The audit report criticized NYPA for its management of the powerplant’s costs, which rose from an initial estimate of $375 million to $650 million. NYPA officials strongly disagree with the criticisms.

Slattery Skanska, College Point, N.Y., is building the disputed powerplant adjacent to the 875-MW Charles Poletti Power Project in Astoria under a $242.1-million contract. A NYPA spokesman says remaining costs are attributed to materials and equipment and licensing costs.

The dual-fuel Poletti unit began operation in 1977. It will be shut down by 2010 under an accord with environmental groups, which agreed in 2002 to support NYPA’s application to build the cleaner 500-MW combined-cycle plant.

At a May 12 conference of the Independent Power Producers of New York, NYPA President and CEO Eugene W. Zeltmann said, “We’re looking for as much as 500 MW of in-city capacity.... We fully expect to meet those needs with commitments from private developers.”

“We supported that decision,” says Jeffrey S. Gordon, a spokesman for Comptroller Alan G. Hevesi. “It was the kind of thing we suggested they could have considered when NYPA decided to build.” The audit criticized the power authority for ignoring possible private development options.

But NYPA needed the plant on line by summer 2005, and in 2002, “independent power producers weren’t building anything in the city of New York,” says Peter Barden, NYPA spokesman. The 1998 estimate of $375 million “changed as we received bids for the construction,” says Michael Saltzman, another spokesman. He says only two bids were received for the project in late April 2002. He blames the increase on “a lack of competition for construction services due to the limited number of qualified contractors.”