US Entergy announces closure of FitzPatrick nuclear plant

4 November 2015

US power company Entergy Corp is to close the James A FitzPatrick nuclear power plant in New York in late 2016 or early 2017. Entergy said it will inform the New York Independent System Operator (NYISO) and the New York Public Service Commission that the plant will retire at the end of its current fuel cycle. The 813MWe boiling water reactor has been supplying electricity to the grid since 1975 and is licensed to operate until 2034.

The plant employs more than 600 workers. The union that represents those workers, IBEW Local 97, said it is hoping alternative ownership options can be pursued, both to benefit its members and preserve the state's goal to decrease reliance on power sources that harm the environment. Bill Mohl, president of Entergy Wholesale Commodities, said Entergy will try to find positions for the displaced workers at its other plants or elsewhere in the company.

Entergy's only operating nuclear capacity in New York state will be the two-unit Indian Point nuclear plant, which is also facing pressure to close for safety reasons. New York still has Exelon's single-unit Ginna plant and twin-unit Nine Mile Point plant.

Entergy said sustained low current and long-term wholesale energy prices, driven by record low gas prices due to Fizpatrick's proximity to the Marcellus shale formation, had reduced the plant's revenues. Current and forecast power prices have fallen by about $10/MWh which means an annual revenue loss of more than $60m, the company added. Entergy also cited a "flawed" market design that fails to recognise or adequately compensate nuclear generators for the benefits of nuclear power. The high-cost structure for the single-unit FitzPatrick and its location in a region with excess power supply and low demand, further reduces its ability to generate revenue, Entergy said.

"Given the financial challenges our merchant power plants face from sustained wholesale power price declines and other unfavorable market conditions, we have been assessing each asset," CEO Leo Denault said in a statement. "Market conditions require us to also close the
FitzPatrick nuclear plant."

New York State officials are fighting the move. "New York will pursue every legal and regulatory avenue in an attempt to stop Entergy's actions and its callous disregard for their skilled and loyal workforce," Governor Andrew Cuomo said in an e-mailed statement to Bloomberg. Entergy needed to decide around the end of October whether to refuel Fitzpatrick in 2016, company spokeswoman Tammy Holden told Bloomberg.

The planned FitzPatrick closure follows the shutdown of Entergy's Vermont Yankee reactor in December. Entergy also said recently that its Pilgrim nulcear plant south of Boston in Massachusetts will close by June 2019. In October, the company said it would take a $1.1bn charge in writing down the value of the Pilgrim and FitzPatrick plants. Entergy owns and operates ten reactors in several US states and provides support and management services for an eleventh. The company said it "remains committed overall to nuclear power".

High costs have led to other US nuclear plants closings in recent years including Duke Energy Corp's Crystal River 3 reactor in Florida, Dominion Resources's Kewaunee plant in Wisconsin, and Edison International's San Onofre station in California. Exelon announced in late October that it would defer any decision on its Clinton nuclear plant, a single-unit 1065MWe boiling water reactor in Illinois, after the Midcontinent Independent System Operator regional transmission organisation acknowledged the need for changes to the design of the southern Illinois electricity market. Clinton is one of five Exelon units in Illinois that are also facing the possibility of premature closure due to profitability issues.

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