Public Service Commission in New York Orders RG&E to Forge a Deal with Constellation

New York's Public Services Commission ordered Rochester Gas & Electric to negotiate a deal to purchase electricity from the R.E. Ginna Nuclear Power Plant, which is struggling to remain profitable with a glut of natural gas putting downward pressure on prices.

R.E. Ginna Nuclear Power PlantThe plant's owner, Constellation Nuclear Energy Group, a subsidiary of Chicago-based Exelon, petitioned for the the PSC to find a solution, saying it had lost $100 million in the past three years and was facing revenue shortfalls after a contract with RG&E expired on June 30.

That contract called for RG&E to buy 90 percent of the 581 megawatt power plant's electricity. With that contract left to expire, Constellation has to accept competitive market prices, which is feared would force closure of the plant. But a study released in October said shutting down the plant would risk reliability of the Rochester area grid.

The PSC said Thursday it was acting to protect the grid. Ginna provides electricity for about 400,000 homes and without the 24X7 production from the plant, the area would be at risk of blackouts.

Any deal struck by RG&E and Constellation would need to be approved by the PSC. Chair of the PSC Audrey Zibelman said the idea was to develop a solution that would maintain the grid's reliability until an alternative approach could be found. The commission was looking for an “orderly exit,” Zibelman said.

An RG&E spokesperson said the company was not ready to comment on the PSC order. Exelon indicated they were “pleased” with the decision and “ready to negotiate.”

The Ginna plant, 22 miles northeast of Rochester, is 44-years old and employs 700 people. In 2012, it paid $10 million in property taxes, making it the largest taxpayer in Wayne County, New York.

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