New York's Public Services Commission over the weekend proposed a subsidy for upstate nuclear power plants that would start at about $482 million per year and rise over a 12-year period until it reached $805 million per year.
The public has until July 18 to comment on the proposal with the PSC likely set on making a decision at their Aug. 1 meeting, Syracuse.com reported.
In their proposal, the PSC cited a study by The Brattle Group that was paid for by Exelon Corporation and Upstate Energy Jobs that found as many as 25,000 jobs and $3 billion in economic activity were directly or indirectly supported by the three upstate nuclear power plants, including Exelon's two-reactor Nine Mile Point two-reactor plant in Oswego and R.E. Ginna plant in Ontario, N.Y. and the FitzPatrick plant north of Oswego, which is owned by Entergy.
The PSC proposal also acknowledges that “replacement of the zero-emission attributes with equivalent amounts of fossil-fueled attributes would result in an increase of approximately 31 million metric tons of CO2 emitted into the atmosphere in over the next two years.” The value of that was worth approximately $1.4 billion, the PSC said, although they also cited The Brattle Group's research that pointed to zero-emissions from nuclear power plants as a value of $1.7 billion per year.
Another fundamental that the PSC acknowledged was the instability in the wholesale electricity market marked by dropping natural gas prices. “Staff's analysis shows that due to low natural gas prices, forecasted wholesale market prices are significantly lower than the average operating costs of the upstate nuclear units,” the proposal says.
To set the market back on its feet, the PSC proposed signing a 12-year contract with nuclear operators that would subsidize the plants at a rate of $17.48 per megawatt-hour for two years. This would gradually rise to $29.15 per MWH over the 12-year span, although it would be put into check if the wholesale prices were to rise. Currently, the agreement would be based on a wholesale price of $39 per MWH.
All three of the affected plants have been put on notice by their owners concerned that the plants are losing money. Nine-Mile Point is scheduled for a refueling in 2017 and the lack of a subsidy plan could persuade its owners to shut it down rather than commit another $55 million to refueling. R.E. Ginna and the FitzPatrick plant could also close in 2017 without economic intervention.
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