New York state to subsidise nuclear power

9 August 2016

The New York State Public Service Commission, despite strong opposition, has approved a $7.6bn bailout of ageing NPPs in upstate New York which their owners have said are uneconomic to run without government support. New York Governor Andrew Cuomo, who appoints the members of the PSC, has called for the continued NPP operation to save jobs. The bailout would be part of a Clean Energy Standard (CES) advanced by Cuomo, whereby 50% of electricity used in New York by 2030 must come from “clean and renewable energy sources”, including nuclear power.

The decision has met considerable opposition from environmental groups. Dr Mark Z Jacobson, professor of civil and environmental engineering and director of the Atmosphere/Energy Program at Stanford University, wrote in an op-ed in Albany Times Union, the newspaper in the state’s capitol, that he was “shocked” by the PSC’s “proposal that the lion’s share of the Clean Energy Standard funding would be a nuclear bailout.” He said “allowing the upstate nuclear plants to close now and replace them with equal energy output” from offshore wind and solar power “would be cheaper and would create more jobs.” The closure of the upstate plants “would jeopardize fewer than 2,000 jobs” while a “peer-reviewed study” he has done “about converting New York State to 100% clean, renewable energy…would create a net of approximately 82,000 good, long-term jobs.”

The upstate NPPs affected by the plan include FitzPatrick, Nine Mile Point 1 and 2 and Ginna. The money would come over a 12-year period through a surcharge on electric bills paid by residential and industrial customers in New York State. The two Indian Point NPP units are not now included in the plan. Cuomo has called for a shutdown of Indian Point plants in the densely populated southern portion of the state. “Nuclear has a role,” he declared at a press conference last month. “Unless we’re willing to go back to candles, which would be uncomfortable and inconvenient, we need energy generation.”

Under the CES, the state's investor-owned utilities and other energy suppliers will be required to purchase Zero-Emission Credits to pay for "the intrinsic value of carbon-free emissions” from NPPs. This will allow the so-called upstate nuclear plants to remain in operation during the state's transition period. The publicly owned New York Power Authority and Long Island Power Authority are also expected to adopt the same requirements.

Exelon, operator of Ginna and Nine Mile Point, confirmed that it intends to reinvest about $200m in the plants early next year now that the CES has been approved. It also said that negotiations on a potential purchase of Fitzpatrick from Entergy will now be able to continue, providing an opportunity to keep the boiling water reactor in operation. Entergy has previously announced plans to close Fitzpatrick, which is licensed to operate until 2034, in January 2017.



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