NY approves ratepayer subsidy to save Upstate nukes
Sunset creates a dramatic image at the Nine Mile Point nuclear plant in Oswego County in this 2009 photo. A new day has dawned for the Oswego nuclear industry, thanks to a program of subsidies approved today by state regulators. (Mike Greenlar)
ALBANY, N.Y. – The state Public Service Commission today decided to guarantee three Upstate nuclear power plants hundreds of millions in additional revenue, over 12 years, to keep the plants from shutting down. All four commissioners voted yes.
The historic decision reflects a judgment by state officials that nuclear power, like wind and solar, now represents a vital environmental asset that can help cut greenhouse gas emissions. Officials also stressed the importance of maintaining a diverse mix of fuels in the power supply.
The decision to subsidize money-challenged Upstate nukes will spark huge celebrations in Oswego County, home to two nuclear plants with three reactors and more than 1,500 workers. Local business leaders had feared an economic meltdown if reactors there closed.
Today's ruling is a big victory for pro-nuclear advocates nationwide, who hope New York's "zero-emission'' subsidies will be copied by other states in the fight against climate change.
The full effect of today's PSC decision will be determined in weeks to come as Exelon Corp. negotiates to buy the FitzPatrick nuclear plant in Scriba from Entergy Corp., which will close the plant in January if a sale is not arranged.
Exelon, the majority owner of Nine Mile Point Nuclear Station next door to FitzPatrick, and of the Ginna nuclear plant near Rochester, said it would try to buy FitzPatrick if the nuclear subsidies were approved. Talks are under way.
The original proposal would guarantee the nuclear plants additional revenues of up to $7 billion over 12 years. The ruling today included minor adjustments to the pricing mechanism. It was not immediately clear how those changes would affect the cost.
The nuclear subsidies are an element of New York's new "clean energy standard,'' requested in December by Gov. Andrew Cuomo, which aims to increase the state's percentage of electricity generated from renewable sources to 50 percent by 2030. Cuomo also set a goal of cutting carbon emissions 40 percent during the same timeframe.
Electric customers across the state will pay surcharges to cover the cost of the nuclear subsidies, which will make up any gap between guaranteed revenue targets set by the PSC and what the plants earn from wholesale market sales. The subsidies as proposed were expected to cost up to $965 million during the first two years, but the actual cost will depend on how many reactors continue to operate and what happens to wholesale prices.
The clean energy standard approved today also provides for ratepayer subsidies to encourage wind and solar power. The subsidies for renewable sources, which are typically set in competitive auctions, have cost about $22 to $35 per megawatt-hour in recent years. The nuclear subsidy is expected to start at $17.50 per megawatt-hour.
Two busloads of pro-nuclear activists, including employees of Nine Mile Point station near Oswego, attended the meeting. Anti-nuclear activists also attended, in smaller numbers.
Cuomo and PSC officials determined that sustaining production from Upstate nuclear plants, which churn out about one-fifth of the power generated in the state, was necessary to prevent a worsening of greenhouse gas emissions.
That judgment was echoed by experts at the New York Independent System Operator, who said costly technical challenges still stand in the way of meeting the PSC's goals for solar and wind power development.