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Cayuga Power Plant and NYSEG failed to reach agreement on the future of the 302-megawatt, coal-fired operation by the deadline earlier this month, filing very different plans with the state Public Service Commission (PSC). The PSC has final say on the plant's fate.

Despite lengthy negotiations, the two companies have been unable to come to terms, NYSEG said in its filing on Friday. "NYSEG cannot agree with Cayuga's repowering proposal because it would require NYSEG customers to finance the repowering of (the power plant) at a cost that is millions of dollars more expensive for customers than other available options," the filing asserted.

Cayuga Power Plant is on the eastern shore of Cayuga Lake in the town of Lansing.

NYSEG asked the PSC to decide that "further pursuit of a largely customer-subsidized Cayuga Facility repowering is not in the public interest" and allow the power distribution company to move forward with reinforcing its transmission lines.

Cayuga Operating Co. LLC submitted a proposal that painted a vastly different picture of the plant's proposed retrofitting. Cayuga's proposal recommends that NYSEG pay $49.5 million in construction costs and $9.6 million annually for 10 years, or $104.2 million net present value, to retrofit and operate the plant's electric generating units.

Cayuga estimated that the repowering would bring $145 million in economic benefits and $24 million in savings from fuel diversity and lower surcharges on NYSEG customers.

NYSEG said its customers would pay $452.3 million for a Cayuga facility retrofitting. The power distribution company estimated $263.7 million in revenue from a repowered Cayuga facility, which would result in a net $188.6 million cost to NYSEG customers.

"In practice, Cayuga's repowering proposal seeks to have all risk associated with negative changes in market revenues assigned to NYSEG's customers," the NYSEG filing said, pointing out that "Cayuga's owners remain free to pursue repowering the Cayuga Facility without customer subsidies via self-generated funding or by attracting other capital in the marketplace."

Cayuga Power Plant didn't sell electricity for eight months in 2012 because natural-gas-fired plants were undercutting its prices, and owners considered closing the plant. Because of a 300-megawatt shortfall during peak electricity demand, the plant remains open with funding from a state-mandated surcharge on all NYSEG customers. The power-purchasing agreement runs through mid-2017.

NYSEG customers paid $32 million in 2014 to keep the plant open, company spokesman Clay Ellis said. In 2015, NYSEG residential customers using 600 kilowatt-hours per month will pay 45 cents a month to keep the plant open, and nonresidential customers with 2,000 kilowatts of demand will pay $700 per month.

In past proposals, Cayuga has sought to have the plant retrofitted for all natural-gas power generation. This time, however, the company proposed deploying dual-fuel capability that would allow the plant to switch on the coal burners if necessary. The company has estimated that construction costs would range between $60 million and $370 million, depending on how many boilers are retrofitted.

NYSEG supported closing the plant and upgrading transmission lines in the area, noting that upgrading would only cost an estimated $56 million.

The companies filed competing proposals in 2013 and then attempted to work together, and now they have reverted to opposing plans. The changing dynamic between the companies led to seven deadline extensions.