By William Opalka
Negotiations that could determine the future of an upstate New York nuclear power plant are set to conclude this week, following a 60-day schedule set out by state regulators.
The New York Public Service Commission in November ordered the owner of the 580-MW R.E. Ginna plant on Lake Ontario to negotiate a temporary contract with the local utility, Rochester Gas & Electric.
The plant has been deemed necessary to maintain system reliability in western New York in a study ordered by the PSC.
However, plant owner Constellation Energy Nuclear Group, a unit of Exelon, said it has lost $100 million over the past three years and will mothball the plant if it can’t get higher prices for its output.
The PSC wants the companies to negotiate a reliability support services agreement (RSSA) in which RG&E would buy Ginna’s output, which is currently sold at a loss into the NYISO wholesale market, according to Constellation. A negotiated settlement is due on Thursday, or the parties must inform the PSC they were unable to reach one.
Spokesmen for both Constellation and RG&E said negotiations are continuing but would not discuss details.
Ginna was formerly owned by RG&E but was sold to Constellation in 2004. The plant, which is licensed through 2029, had a 10-year power purchase agreement with RG&E that expired last June.
Rochester-area customers are likely to face higher electricity costs regardless of the outcome. A higher, above-market price would presumably be negotiated with Constellation, or if Ginna is eventually taken offline, the reduced supply will drive up prices in the western New York region.
Entergy, another nuclear power generator that owns the Indian Point Energy Center north of New York City, has opposed the RSSA. It argued, unsuccessfully, that Constellation has effectively tried to file a retirement notice without the proper procedures, time and expense any other nuclear power plant owner would be required to do under similar circumstances. It also said an RSSA presented directly to the PSC would not permit review and comment, to which other “must-run” agreements are subject.
RG&E, a subsidiary of Iberdrola USA that serves 371,000 electricity customers in a nine-county region, said it would face reliability issues anytime its load exceeded 1,430 MW. Its modeling indicates that would occur at least for 205 hours per year.
RG&E said a transmission project expected to be in service in late 2018 will shorten the length of the Ginna agreement.
The $250 million Rochester Area Reliability Project will access power from the New York Power Authority’s 345-kV cross-state transmission lines originating in Niagara Falls.
It includes 1.9 miles of new 345-kV transmission, 23.6 miles of new or rebuilt 115-kV lines, a new 345-kV/115-kV substation and equipment upgrades. The project was first intended to maintain reliability in the event of a long-term outage at Ginna.