Governor  George Pataki Wednesday announced the conditional award of a power  purchase  agreement  that  would  support  plans  by  NRG  Energy to construct an advanced clean coal power plant in western New York that would help to reduce our dependence on imported energy.

The  agreement  is  part of a strategic alliance being developed between the  State  and  NRG  to  help  the  company obtain the necessary financial resources  to build a clean coal facility at its Huntley Generating Station in  the  Town of Tonawanda, Erie County.

Construction of the plant, which is projected to cost  more than $1 billion, will help to ensure adequate energy  supplies  for the region, said the governor.  The proposed plant would benefit Western New  York’s  economy  through  the creation of more than 1,000 construction jobs  and  about  100  new permanent jobs, while also generating additional business opportunities in the region.

On Tuesday, the NYPA Board of Trustees authorized up to $500,000 to help secure  the  necessary  support, over a period of up to 18 months, to lower the  proposed  680-mw  plant’s cost of electricity.  It is anticipated that additional  support to bring down the overall cost of the proposal could be obtained  from  federal  and  state  assistance  through  tax  credits  and tax-exempt  financing,  as  well as grants from non-governmental sources. A successful  alliance  for  narrowing  the  gap with commercially acceptable purchase  prices  would  form  the  basis  of negotiations.  The successful outcome  of  the  endeavor  and  satisfaction  of  environmental regulatory conditions  for  the  new project’s construction would make it possible for the New York Power Authority to enter into negotiations with NRG for a long-term supply agreement.