By William Opalka

Consumer advocate Public Citizen on Tuesday protested Energy’s proposed sale of the James A. FitzPatrick nuclear plant to Exelon, saying the companies’ FERC application failed to include information about the state subsidy that makes the transaction possible (EC16-169).

Public Citizen says omission of the subsidy makes the application incomplete. It also said the subsidy itself distorts the New York market and violates the NYISO Tariff.

Entergy had said it would close FitzPatrick in the spring, until Exelon came to the plant’s rescue this summer. (See FitzPatrick Sale Filed with New York Regulators.) The $110 million sale was dependent on the New York Public Service Commission’s adoption of the zero-emission credit subsidy that pays upstate nuclear generators for their carbon-free attributes. (See New York Adopts Clean Energy Standard, Nuclear Subsidy.)

“Exelon’s application to acquire FitzPatrick must be considered incomplete because, inexplicably, it fails to incorporate any mention or analysis of New York’s proposed ZEC payment subsidy scheduled only for FitzPatrick and for both of Exelon’s two in-state nuclear facilities. This payment subsidy, estimated at a total of $8 billion in six two-year increments, will significantly distort the NYISO energy and capacity markets and fundamentally alter the economics of Exelon’s power generation operations in NYISO, including FitzPatrick,” Public Citizen wrote.

“We believe the structure of the ZEC may conflict with elements of the NYISO … Tariff, particularly FERC’s mandate for incentives through the NYISO installed capacity market,” the protest continued.

“While the … proponents claim the ZEC is designed to combat climate change, a realistic analysis shows that the primary purpose of the ZEC is to keep select economically uncompetitive nuclear power plants operating, regardless of the impact on greenhouse gas emissions. And the state’s decision to discriminate between different nuclear generating stations for reasons other than climate change or the environment further complicates the true purpose of this expensive ZEC subsidy,” Public Citizen says.

Entergy’s downstate Indian Point facility, which is not financially stressed, is not currently eligible to participate in the ZEC program.

Opponents of the subsidy say it will cost ratepayers up to $8 billion over its 12-year life. Supporters say the state will enjoy a net economic benefit when it is calculated using the federal social cost of carbon analysis.

Public Citizen wants FERC to declare the application incomplete, require a market analysis that incorporates the full impact of ZECs and determine if the subsidies conform with FERC rules.

Public Citizen was the only party to file responses to the application before the comment deadline expired Oct. 10, except for U.S. Rep. John Katko (R-N.Y.), who sent a letter to FERC urging action on the deal. Katko, whose district includes FitzPatrick, said the plant provides more than 600 jobs and is “a vital part of the region’s economy.”