New York State Electric & Gas Corp. has launched the initial phase of the Seneca Compressed Air Energy Project -- an evaluation of the technical and economic viability of storing compressed air in an underground salt cavern and releasing the air to spin a turbine and generate electricity.

The study is expected to be completed late this year. If it reveals the project is feasible, the utility would seek state and federal approval to build a 150-megawatt power plant to be operational in late 2014. The plant could operate up to 16 hours a day using stored compressed air and could reduce the need for fossil fuel-fired generating plants during periods of peak demand.

The project received a $29.6 million grant from the federal Department of Energy in November to offset its estimated $125 million cost.

The power plant would be built next to the Seneca Lake Gas Storage facility on the west side of Seneca Lake, about three miles outside Watkins Glen. The site is suited for capacity increases, NYSEG says, because of the depleted salt caverns nearby.

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