Pact to Keep Plant Operating Though March 2017
By William Opalka
NEW YORK — The New York Public Service Commission Tuesday approved a contract to keep the struggling R.E. Ginna nuclear power plant operating through March 2017 (14-E-0270).
The commission approved a reliability support services agreement between distribution utility Rochester Gas & Electric and Exelon’s Constellation Energy Group, which had threatened to close Ginna because it was losing money.
The PSC ordered the RSSA in 2014 after determining that the 610-MW plant on Lake Ontario was needed to maintain reliability. The PSC’s action Tuesday approves an agreement filed in October by the companies. (See Ginna Lifeline to End in 2017; Profits After ‘Unlikely’.)
The contract, which was endorsed by large industrial customers, is subject to FERC approval.
RG&E will charge ratepayers $425 million to $510 million to cover Ginna’s full cost of service, with the final amount determined based on Ginna’s revenues from the NYISO wholesale market. The utility also will apply $110 million in customer credits to the contract, making the total price tag as high as $620 million.
Ratepayers began paying higher rates in September to mitigate the effects of rate compression.
“The joint proposal strikes a balance and protects consumers by making use of the customer credits and also protects the financial health of” RG&E, PSC Chairwoman Audrey Zibelman said.
Transmission upgrades expected to be completed next year will address the reliability concerns resulting from the plant’s closure.
However, Ginna’s life could be extended beyond March 2017 under a PSC proceeding to provide financial incentives to keep upstate nuclear plants operating until large-scale renewable energy facilities are deployed. The plan is part of Gov. Andrew Cuomo’s proposed Clean Energy Standard, which he wants finalized by June. (See New York Would Require Nuclear Power Mandate, Subsidy.)
Exelon has said the CES “could provide a meaningful path to sustain” Ginna and its Nine Mile Point nuclear plant.
Another upstate nuclear plant, the James A. FitzPatrick station, is expected to close by early 2017. Its owner, Entergy, says the subsidy plan has come too late to save it.