Dynegy bankruptcy case includes complicated ownership puzzle

We’ve been writing a lot about Dynegy’s bankruptcy case the past few weeks.

You can click here to read about the initial filing, and click here to read about how Dynegy’s case could affect Newburgh, Marlborough and Orange County.

In a nutshell, the company is trying to get rid of its Danskammer and Roseton power plants in the Town of Newburgh because they aren’t making money, and because Dynegy still has to pay $794.5 million leases on those plants. The Hudson Valley has a lot at stake in the case because the two plants employ more than 150 people, and they are the biggest taxpayers in Orange County.

The first hearing in this complicated bankruptcy case is scheduled for Friday, Dec. 2.

“Complicated” is the key word.

Much of the case will focus on a complicated ownership setup that Dynegy created. When the company created the ownership setup in 2001, it was meant to help Dynegy get long-term financing to buy the plants. But when Dynegy modified its corporate structure in 2011, its opponents argue, the new ownership setup was meant to isolate Danskammer and Roseton so that Dynegy’s shareholders would not be injured when the company tried to get rid of the plants.

Take a deep breath. This is, once again, complicated.

Dynegy bought the Newburgh power plants in 2001. Then they seperated the power plants from the land that surrounded them. They “sold” the power plants to a New Jersey company and then immediately leased them back – a maneuver that helped Dynegy finance the purchase. Dynegy retained ownership of the land, but then leased the land to the New Jersey company, which leased the land back to Dynegy.

Then Dynegy, more recently, created a bunch of shell companies to isolate Danskammer and Roseton from other power plants that were actually making money for the company.

And what does all this look like? Well, a group called U.S. Bank National Association, which represents bondholders in the case, made a flow chart and filed it as part of its bankruptcy court papers.

If you thought the deal and ownership model sounded complicated, take a look at the visual story – and check the Times Herald-Record on Wednesday for more about the bankruptcy case.

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NYC loses bizarre fallen-tree case in Ulster County

A state appellate court has ruled against the New York City Department of Environmental Protection in a bizarre fallen-tree case in Ulster County.

The case stems from an incident that happened roughly six years ago. John K. Whalen, formerly of Shandaken, was driving on Route 28 near the Ashokan Reservoir when an 80-foot-tall pine tree fell on his moving car. Whalen’s lawyer, Derek Spada of Kingston, said the tree was noticeably decaying and covered in woodpecker holes. Whalen suffered a brain injury in the incident.

When Whalen sued the city in State Supreme Court, the case focused on who was responsible for the tree. The DEP said the state was responsible because the tree was located on a 200-foot easement that New York used to maintain the highway.

The court, however, ruled that the DEP had a responsibility to maintain the forested area around the highway, despite the state’s easement. Judges included a reference to the “No Trespassing” signs that the DEP had put up around the forest, which indicated they had already taken responsibility for the land.

Spada said that Whalen, who once worked as an registered nurse in Kingston, can no longer work and has since moved to South Carolina. He also said the case highlights an important legal point for people who have dying trees on their land.

They have a responsibility to take the tree down if it poses a threat,” Spada said.

-AB

A full text of the appellate court’s decision can be found by clicking here.

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NYC’s water supply….performed by puppets?

NYCWaterplay

This is maybe the greatest flier I’ve ever seen.

For those of you who follow the New York City water supply and its Catskill-based reservoirs, you might want to swing by SUNY New Paltz this Thursday night for the rarest of performances.

According to the above flier, students from the group Students for Fresh Water will be telling the story of NYC’s water supply through the “elemental beauty of mask & puppet theater.”

I’m intrigued. Aren’t you?

The show has a great title: “City that Drinks the Mountain Sky.”

Drink it up.

AB

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Joint statement on state’s buyout deal for Wawarsing

State officials have just announce a deal that would buy out home in Wawarsing that have been flooded for decades because of the huge leak in NYC’s aqueduct tunnel. You can read that story here.

Here’s the full test of a joint statement issued by Sen. John Bonacic, R-Mount Hope, and Assemblyman Kevin Cahill, D-Kingston.

“We are very pleased to have reached an agreement with the Governor, Senate, and Assembly to include approximately $4.5 million to buyout properties near the leaking aqueduct in the Town of Wawarsing. The funding we are placing in the budget, will help make life bearable again for the victims of this situation.”

“This day has been a long time coming, and has been a team effort. We encourage New York City to also assist these individuals, by providing moving costs to help them move, and to also match the State funding.”

“Nothing can give these individuals back the years they have suffered from the City’s inaction, but hopefully this can help many impacted families move forward.”

“We look forward to Governor Cuomo’s signing the budget into law which will contain this language and thank him for his efforts in working with us.”

-AB

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NYC reservoirs overflowing

DEPchartHere’s a graphic that says 1,000 words.

New York City’s upstate reservoir system is currently full. Actually, more than full.

The reservoirs currently stand at 101.1 percent full, which is roughly 12 percent than the average for this time of year. Seems like a series of big rainstorms last week, combined with the melting snowpack in the Catskills, has filled ’em to the brim.

I went to the National Weather Service real-time data to find out a little more. Here’s a quick rundown of what I discovered.

*** The Ashokan, Pepacon, Gilboa, Cannonsville and Neversink reservoirs are all spilling into local waterways right now.  Cannonsville is spilling most, at 1,180 million gallons per day. The spilling could might cause some water quality issues, especially if the clean and dirty basins of the Ashokan are starting to mix.

*** New York City also continues to release the maximum amount of water down its Rondout-West Branch tunnel, roughly 820 million gallons per day, which is causing homeowners in Wawarsing to continue flooding. One of the homeowners, Laura Smith, wrote to be: “I now have an artisian well on my property where there once was a sinkhole…blub,….blub,…..blub.”

Gave a quick shout to NYC Department of Environmental Protection and just got a note back from spokesman Farrell Sklerov. I’ll paraphrase what he said.

Considering all the snowpack from the winter and the recent rain, this is not unusual, Skerlov said. The DEP is making maximum releases allowed by law from Cannonsville, Pepacton and Neversink. It has turned on a siphon system at Schoharie. And it has shut down the waste channel at the Ashokan Reservoir becuase it’s currently spilling about 1,000 million gallons per day. (That’s why some of you in Ulster County might have noticed the Lower Esopus Creek has turned chocolately brown again.) Sklerov said once that Ashokan recedes, they’ll likely turn the waste channel back on.

Hope that was helpful for all of you living around the reservoirs and their tributaries.

-AB

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Indian Point’s parent company issues statement amid Japan disaster

Entergy Corporation, Indian Point’s parent company, has issued a statement amid the ongoing disaster in Japan.

The statement seeks to assure the public that nuclear plants are safe, and that ongoing risk assessments are happening to assure that they adjust to new information.

As we wrote in today’s cover story, which you can read here, Indian Point is being reassessed by the federal government becuase authorities believe its earthquake safeguards might not be adequate. Below is the entire statement issued by Entergy.

AB

Entergy_Statement_Japan

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Full list of land-conservation grants announced Monday

The Land Trust Alliace announced $1.4 million in state grants to land trusts and conservancy groups throughout New York on Monday.

You can read a story about the local recipients here.

A complete list of grant recipients is included below:

LandTrustGrants

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Video of Wawarsing flooding

Ulster County Legislator Terry Bernardo posted the below video this weekend after Wawarsing residents were flooded again.

As you’ve read for years now, folks along Route 209 are the victims of a unique one-two flooding punch. Their basements are more prone to flooding during times of heavy rain because their houses sit over a huge leak in one of New York City’s aqueduct pipes, known as the Rondout-West Branch tunnel.

The result? Cold, clear water shoots through cracks in their basements.

We wrote about the problem last week in a story here, and then wrote about it a second time when New York City showed up to help.

New York City has planned a $1.2 billion public works project to fix the leak in 2019, but the next interesting moment will come in June when the U.S. Geological Survey is expected to present the findings of a two-year study that will show exactly which homes are affected by the tunnel leak and how the water moves through little fissures and cracks in the ground.

Stay tuned. But for now, watch this.

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Announcement of $$$ for land trusts coming Monday

Some local land trusts are likely going to receive a boost on Monday.

The Land Trust Alliance will announce roughly $1.4 million in grant funding on Monday during a press conference in Albany. I’m told that at least some of this money will land in local coffers in Orange, Sullivan and Ulster counties.

The money will go toward some 57 recipients, including seven who’ve never received money before.

So where’s the cash coming from? It’s coming from the state’s Environmental Protection Fund, which is a shrinking but powerful stash of money that funds environmental projects throughout the state.

This is a good time for land trusts to be buying parcels in the Hudson Valley and Catskills. A lot of developers have left time, farms are looking to sell conservation easements and prices are super low. A quick tease: this will be the subject of a story I’ve written for next week’s Times Herald-Record.

For now, stay tuned to find out who gets a nugget of gold from the land-trust pot.

-AB

LTAgrants

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More on NYCDEP flood preparations

As many of you know, our region is once again bracing for floods.

The Hudson Valley and Catskills are supposed to get walloped with 2-4 (and possibly even 5!) inches of rain from Wednesday night until Friday morning.

The forecast has already pushed New York City to change the way it’s operating its reservoirs.

The most interesting changes has happened over at the Ashokan Reservoir. The city’s Department of Environmental Protection has already opened the release valves, so to speak, and begun pushing water down the Lower Esopus Creek. The DEP said it plans to release the maximum of 600 million gallons a day by the end of Wednesday to empty the reservoir as much as possible so that it can handle the storm water.

This decision was made after a 9:30 a.m. conference call with the state DEC, Ulster County, state Health Department and federal Environmental Protection Agency, sources said.

It’s the first time NYC has released water into the Lower Esopus Creek since Jan 28. That was the day it stopped a four-month long series of turbid releases that turned the creek into a moving pool of chocolate-colored water. The city released more than 40 billion gallons of turbid water into the creek by the time it was finished.

The releases prompted stiff action from Ulster County Executive Mike Hein, who threatened to sue, and the state DEC, which filed legal paper accusing the city of “illegal conduct.” The state said NYC violated environmental laws and they’re asking the city to pay a $2.6 million penalty.

Still, all the parties said they saw the need for releases this time around. The situation in the Ashokan basin is dire. DEC Assistant Commisioner Jim Tierney said there’s more than 17 billion gallons of water in the snow pack around the Ashokan. And with up to 5 inches of rain coming, that could spell doom for flood-prone places like Phoenicia and the Town of Ulster.

“You could get an enormous amount of water rolling down that valley,” Tierney told the Record. “It could be very bad tonight.”

Tierney said environment officials are working under the theory that releases into the Lower Esopus now could lower the high-water mark when floods hit tomorrow or Friday. Even Hein, who’s become a steady critic of the DEP, agreed.

Neversink Supervisor Greg Goldstein at the Neversink Reservoir in 2010.

Neversink Supervisor Greg Goldstein at the Neversink Reservoir in 2010.

“This limited release represents a responsible operation of the waste channel as a powerful tool to provide flood mitigation,” he said.

NYC is also trying to make room for the storm water in its Delaware watershed. As of Wednesday morning, the city was pushing a huge amount of water into the Delaware River and its tributaries. It was releasing maximum amounts from the Cannonsville, Pepacton and Neversink reservoirs. That’s 979, 453 and 123 million gallons a day respectively, for a rough total of 1.5 billion.

All of them were more than 91 percent full.

The city was able to push that much water out, it said, because laws say it can count 100 percent of the snow pack against its releases when the reservoirs are expected to spill within seven days.

Before I wrap up this wrap-up, here’s something for all you reservoir waters to keep an eye on: NYC runs into turbidity problems in the Ashokan Reservoir after big rain storms. These two big rains in a row could become problematic. The city usually keeps turbid water in the Ashokan’s west basin, and clean, more drinkable water in the east basin. But National Weather Service data shows the west basin has already begun spilling 1,638 million gallons per day into the east basin.

That means the dirty water is getting into the clean drinking water. It also means the city might have test the waters–not to be punny–and see if the state will allow it to push even more dirty water into the Lower Esopus in the coming weeks.

-AB

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