By William Opalka

A group of large electric customers asked federal regulators to reject an agreement to keep a nuclear power plant in western New York operating.

The group said the Federal Energy Regulatory Commission should reject a reliability support services agreement ordered by the New York Public Services Commission to keep the 580-MW R.E. Ginna plant financially viable to serve customers of Rochester Gas & Electric (ER15-1047).

The utility and NYISO said the plant is needed to maintain system reliability until a transmission project that would bring additional energy into the Rochester area is completed in late 2018. An agreement filed with the PSC on Feb. 13 guarantees annual payments of about $210 million, minus some adjustments for support services. (See Ginna Nuclear Plant Wins Contract to Keep Operating).

The interveners — 60 large industrial, commercial and institutional energy consumers — say the out-of-market payments would distort NYISO’s wholesale electricity markets and result in “potentially staggering rate impacts to RG&E’s retail electric customers.”

RG&E estimated an average residential customer would see bills rise about 4.2% while costs for large primary customers would increase 6%. The exact amount will depend on the monthly output of the plant and changes in wholesale energy and capacity market prices.

The group says RG&E’s estimates understate the impact of the increases because they are averaged over the life of the 3.5-year agreement and are based on the total bill, including commodity costs unaffected by the deal. Primary customers would see increases of 9.05% in 2015. “On a delivery-rate-only basis, the RSSA apparently would result in increases of over 20% to retail customers,” the protest says.

Exelon unit Constellation Energy Nuclear Group said it has lost $100 million over the last three years operating the plant. It said it would mothball the plant without an agreement.

However, opponents to the deal have previously said no formal proceeding to shutter the plant has been started, and the move by CENG is an attempt to sidestep the lengthy and costly process to formally retire a nuclear plant. The interveners say reliability-must-run contracts should only be allowed when there is concrete evidence the plant would otherwise retire.