March 7 (Reuters) - U.S. power generating company NRG Energy Inc reached an agreement with a unit of power company National Grid Plc to run the 100-megawatt (MW) Unit 2 at the Dunkirk coal-fired plant in upstate New York for another two years.
The contract runs from June 1, 2013 to May 31, 2015, NRG spokesman Dave Gaier told Reuters.
The agreement requires the approval of the New York Public Service Commission (PSC), the state utility regulator.
NRG said it will mothball the 100-MW Unit 1 at the plant. Last September, the company mothballed the 185-MW Units 3 and 4 at Dunkirk.
Gaier said employee positions at the plant will go from 82 to 68 but noted most of them have already been eliminated through transfers, attrition and the elimination of existing vacancies.
He said NRG will submit its plan to repower the Dunkirk plant from coal to natural gas with National Grid on March 19.
The state PSC has said that closing Dunkirk could cause reliability concerns and in January ordered National Grid, which owns the local power company, to evaluate the reliability, environmental and customer impact of repowering Dunkirk versus the utility's plan to upgrade transmission lines.
On April 22, National Grid is expected to file its recommendations on NRG's generation proposal and National Grid's own transmission alternative with the state PSC.
NRG wants to repower Dunkirk first by building a pipeline and co-firing the facility with gas and coal and ultimately replacing it with a 440-MW combined cycle gas plant for about $500 million.
NRG has said it wants a power purchase agreement before moving forward with the repowering of Dunkirk.