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Industrial power play 

The former Kodak Park, now known as Eastman Business Park, is seen by local and state leaders as an economic development lynchpin for the Rochester region.

The 1,200-acre site is evolving from Kodak's film and chemical manufacturing hub to a cluster of renewable energy and advanced manufacturing companies. And that, say local business and government leaders, is what will keep the former Kodak Park a productive center of industry.

But there's a catch. One of the park's key features, its dedicated power plant, needs to be upgraded in order to meet upcoming federal and state environmental requirements. Kodak, which owns the business park and the power plant, is going through bankruptcy proceedings and it's not clear that the company will have the millions of dollars needed for the upgrades.

The scenario raises questions about who will, and who should fund the upgrades. Government and economic development officials say they want the plant to keep operating, since it is an attractive feature for high-tech industries.

The business park is located in the City of Rochester and the town of Greece. Local business and government officials cast the complex as a regional economic development asset that will have effects beyond one or two communities.And it's facing costs driven by government regulations. That's a traditional argument for government involvement in an economic development project.

In a recent draft document, the Finger Lakes Regional Economic Development Council says that "efforts to preserve and strengthen Eastman Business Park" remain the council's top priority. It also says that preserving the complex's internal utility systems — Eastman Business Park also has its own water system and other amenities — is essential.

The council has formed a workgroup focusing solely on issues pertaining to the park.

It's significant that the council, a group of local business leaders and elected representatives, prioritizes the park. These regional councils, established by Governor Andrew Cuomo's administration, are supposed to drive state economic development efforts.

Kodak's power plant consists of four coal-powered boilers that can generate as much as 130 megawatts of power. To put that figure into perspective, a single megawatt can power hundreds of homes. The boilers also generate steam power, which business park tenants can use.

Kodak plans to retire one of the boilers by the end of 2013, and another by the end of August 2017.

"There would be less capacity, but adequate capacity to serve anticipated needs," Kodak spokesperson Christopher Veronda wrote in an e-mail. "The two boilers remaining are the largest."

The remaining boilers would be upgraded to bring them into compliance. That means either repowering them with natural gas or installing new emissions controls.

The power plant will have to comply with three sets of upcoming state and federal standards, including those set under the Clean Air Act. Those standards regulate particle pollution, a chemical that contributes to ground-level ozone, and a chemical that contributes to acid rain.

Veronda says the cost to upgrade the Eastman Business Park power plant is uncertain because not all of the regulations are yet certain. At the end of August, a federal appeals court struck down an Environmental Protection Agency regulatory program for the three pollutants. The EPA can appeal the decision or develop a new regulatory plan, but either approach means uncertainty regarding future standards.

State economic development officials and Kodak representatives are discussing the power plant. It's one topic in broader talks about Eastman Business Park.

The state has also hired consultants — including environmental, legal, and engineering assistance — to address issues that could hinder the business park's viability. Laura Magee, a spokesperson for Empire State Development, says the power plant is one of the issues under examination.

The Kodak and Empire State Development spokespeople offered few details, however, about those talks. Magee says that ESD and its partners are examining ways to work with the private sector and government to ensure the park's stability.

When asked whether there are state programs or grants that could help finance the plant upgrades, Magee said in an e-mail that "ESD and its partners are examining its options now."

Veronda gave a similar response to questions about whether Kodak has identified funding for the upgrades.

"Discussions are under way with a number of parties who all recognize the significance of Eastman Business Park to the future well-being of the community," he wrote in his e-mail.

The state Public Service Commission has filed a statement with the federal bankruptcy court handling Kodak's case. The commission asserts that its regulatory control over the complex's utilities is not pre-empted by bankruptcy laws. The commission regulates issues including transfers of ownership or control, decisions to end service, and rates.

In other words, the commission would have to sign off if Kodak decided to sell the plant or curtail service — although there's no indication that Kodak plans to do either. The PSC filings also stress that the decision would have to consider the public interest, which would include the impact on the local economy.

"The scope of the review could include factors such as the creation or elimination of jobs, any potential increase or decrease in property tax revenue, and the overall well-being of the community," the filing says.

Ultimately, the power plant is important because of the types of businesses moving into Eastman Business Park.

Inexpensive, plentiful power is important for manufacturing operations; power costs are often cited by businesses as an impediment to operating in New York.

But the plant and its accompanying grid are also important from a technology-testing standpoint. The plant played a role in New York Battery and Energy Storage Technology Consortium's decision to locate a battery commercialization center at the park. NY-BEST plans to invest $20 million into the center in the first phase of development.

The plant, especially when combined with the complex's grid, will allow battery developers to test utility-scale technology. And if NY-BEST succeeds and becomes a hotbed of battery research and development work, that could mean jobs for Rochester.

The jobs and business potential are key reasons why there's no doubt among many officials that the plant needs to be repowered.

This story has been updated to clarify Eastman Business Park's location.

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