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New York nuclear plant subsidies fuel controversy

Louisville, Kentucky (Platts)--10 Oct 2016 939 am EDT/1339 GMT


A mushrooming controversy in New York over the state's willingness and wisdom of using public money to subsidize the continued operation of struggling nuclear power plants could make it "ground zero" in the country's battle to combat climate change.

A newly formed coalition of nearly 100 environmental and consumer groups opposes Governor Andrew Cuomo's plan for what it claims is an $8 billion bailout of three nuclear plants destined to be owned by a giant out-of-state energy company, Chicago-based Exelon.

"We hope to convince the governor that New Yorkers do not want to pay billions of dollars in additional utility bills to bail out" Exelon's 1,900 MW Nine Mile Point and 614 MW R.E. Ginna reactors and Entergy's 838 MW James A. FitzPatrick nuclear plant in upstate New York, which Exelon is in the process of acquiring, Blair Horner, legislative director for the New York Public Interest Research Group, said Thursday in an interview.

By unleashing an ambitious active grassroots campaign, they hope to persuade the New York Public Service Commission in November to reject the sale of FitzPatrick to Exelon. If that happens, Horner believes, the whole subsidy plan could collapse.

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The brouhaha started August 1 when the PSC approved a Cuomo-backed Clean Energy Standard that, in part, allows utilities that own nuclear, wind and solar power to be able to earn renewable energy credits for generating electricity.

Opponents contend Exelon could earn $8 billion over several years for its New York nuclear plants. Supporters say the figure is much lower, perhaps $2 billion or less.

The broader CES requires all of the state's load-serving entities to get at least 50% of their power from renewables such as wind and solar by 2030.

Cuomo and his administration quickly fired back at their detractors. "This is an absurd stance that would repeal a national model to fight climate change and replace it with more expensive dirty fuel and fracked gas that will send electric bills skyrocketing and puts hundreds of New Yorkers out of work," Rich Azzopardi, the governor's senior spokesman, said in a Thursday email, referring to the coalition's efforts to stop the subsidy.

In a letter to Horner, Richard Kauffman, New York's energy "czar," took it a step further, accusing the NYPIRG official of perpetrating "a cheap stunt that not only misleads, but offers no workable alternative."

Horner insisted the coalition's fight is not against the environment or even nuclear power, but in favor of taxpayers. It was Cuomo's office, he noted, that "merged the two proceedings together at the last minute [at the PSC] -- bailing out nukes and the clean energy standard."

In his view, the governor needs to step back from his pro-subsidy position for the nuclear plants and order the PSC "to examine alternatives to the plan." Such a comprehensive review would include an analysis of options "to see if some of this money could be redirected to energy efficiency and more clean energy options," he said.

Even under a worst-case scenario for the nuclear plants, "they are not going to turn off tomorrow," he added.

The three nuclear plants are "very old and there are a number of safety, security and environmental issues with them," Tyson Slocum, energy program director for Washington-based consumer advocacy group Public Citizen, said Thursday in an interview. "These are not long-term investments, spending a lot of ratepayer money on extremely short-term investments."

Slocum said taxpayer money would be better spent on adding more wind and solar energy and boosting energy efficiency.

But nuclear plants are needed if New York is to shift to 50% renewables and emissions reductions, Kauffman said. "New York must use all of its existing carbon-free power sources, including our upstate nuclear fleet, to continue our progress on climate change. This is the cheapest and cleanest way to achieve our clean energy and climate goals."

The New York bailout is widely seen as a test case for a broader national strategy as states look to reduce their carbon footprint. Debate is continuing over the legislation and a final vote is possible in the General Assembly's "lame duck" session in November.

--Bob Matyi, newsdesk@platts.com
--Edited by Valarie Jackson, valarie.jackson@spglobal.com




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