As Governor Andrew Cuomo announced the sale of Fitzpatrick Nuclear Power Plant to Exelon Corp. this week, the news was sprinkled with arguments in favor of nearly a billion dollars in subsidies over the next two years.
“Right now, the cost to operate a nuclear plant is effectively higher than the profit that the nuclear plants are making,” Governor Cuomo said.
The move promises to save hundreds of high-paying jobs in Oswego County and protect a major source of tax revenues.
Fitzpatrick was slated to close next year. The current owner, Entergy had no plans to refuel the plant, which is a critical step to keeping it operational.
Exelon announced it would be interested in taking over operations at Fitzpatrick, but only if the Public Service Commission (PSC) came up with a viable plan to offer nuclear plants financial support.
“It allows us at Exelon to turn around and start today to invest $400 – $500 million into these plants,” said Exelon President and CEO Chris Crane.
Opponents call the subsidy plan a publicly-funded bailout. The cost is expected to trickle down to a family’s utility bill.
Utility companies will buy credits worth nearly a billion dollars over the next two years, depending on the percentage of nuclear power they use.
The credits will be passed on to nuclear companies as a reward for producing carbon-free power…a central part of the Governor’s clean energy initiative.
“The existing plants at some point in time will reach the end of their license life, or reach the end of their useful lives. Today isn’t the day for that,” said Entergy CEO & Chairman Leo Denault.
Company officials and the governor argue – subsidies will also pay off by keeping energy market supplies balanced.
“If you lose nuclear you’ll see that natural gas will spike or will be subject to price increases from other sources because we don’t have balanced alternatives,” the Governor added.
The Governor’s ultimate goal is to generate half of the state’s power from renewable sources by the year 2030.
That includes wind and solar power – not nuclear energy. But, Fitzpatrick currently produces enough electricity for 800,000 homes.
“If we’re going to make a transition into more renewable solar, wind, battery storage etc. – we’re going to need to have the nuclear plants up and running. If you replace those today you won’t replace them with wind and solar, you’ll replace them with Fossil fuels,” Denault said.
The New York State Public Service Commission (PSC) estimates the average residential rate payer will see an increase of less than $2 on their utility bill as zero-emissions and renewable energy credits take hold.
According to a PSC fact sheet, a report by The Brattle Group, prepared for labor groups, found that rate payers could see a $7 increase in utility bills if fossil fuel usage rose in the absence of nuclear power plants.
The State will review subsidies every two years. If natural gas prices rise, the credit amount would drop.
Nine Mile Point Unit 1 is licensed with the Nuclear Regulatory Commission until 2029. Unit 2’s license ends in 2046.
The FitzPatrick plant is licensed to operate through 2034.