Dive Brief:
- Exelon Corp. announced yesterday it would take over the James A. FitzPatrick nuclear plant in upstate New York, ending a lengthy debate over the future of the plant currently owned by Entergy, Bloomberg reports.
- Entergy had announced plans to shutter the 838 MW plant next year, citing the economics of competing with dirt cheap natural gas, but the state put nuclear subsidies in place to give breathing room to the plant's carbon free generation.
- According to a statement from Exelon, the agreement totals $110 million. Entergy will transfer the plant's operating license to Exelon, and the New York Power Authority will transfer the decommissioning trust fund and liability for FitzPatrick to Entergy. After regulatory approvals are obtained, Entergy will then transfer the decommissioning trust fund to Exelon.
Dive Insight:
Entergy was losing money on the Fitzpatrick plant, but New York's new Clean Energy Standard was sufficient to keep Exelon interested. The state set a 50% renewable goal, and included subsidies to support carbon-free generation at three struggling upstate plants.
“We are pleased to have reached an agreement for the continued operation of FitzPatrick,” Exelon CEO and President Chris Crane said in a statement. “We look forward to bringing FitzPatrick’s highly-skilled team of professionals into the Exelon Generation nuclear program, and to continue delivering to New York the environmental, economic and grid reliability benefits of this important energy asset.”
Because Entergy had planned to close the facility, the deal on paper is a unique $110 million acquisition of an operating nuclear plant. Typically, they cost billions to construct.
Exelon intends to spent millions on its New York fleet, now including Fitzpatrick, to the tune of $400 to $500 million. And the company said it is committed to refueling FitzPatrick in January and does not anticipate any immediate change to staffing levels at the plant, which normally employs about 600 people.
The economic impact of the plant's possible closure, along with the emission-less power it generated, was a key factor in the fight to save Fitzpatrick.
A major component of New York's environmental goals included support for three nuclear plants: Fitzpatrick, Ginna and Nine Mile. The standard will direct about $965 million to the plants over the first two years, using a formula based on expected power costs and the social price on carbon federal government agencies use in rulemaking.
While the deal had been in the works, there was some concern changes to the state's new CES could have endangered the plan. Announcement that Exelon would take over the plant drew quick comment from several groups.
“The news that the FitzPatrick nuclear plant will be saved is an incredibly positive development for the upstate region and means that thousands of working families will continue to enjoy the high-paying, solid jobs that this plant provides for New Yorkers," Ted Skerpon, chairman of the IBEW Utility Labor Council of New York, said in a statement.
The Rochester Building and Construction Trades Council and the Central-Northern New York Building and Construction Trades Council jointly hailed the decision, saying it would save the jobs of 615 plant workers.
"We applaud the agreement reached today by Exelon and Entergy to keep the FitzPatrick nuclear power plant operating,” said Gregory Lancette, President of the Central-Northern trade council. Pointing to recent studies, Lancette said it “is clear that this plant is worth saving, and will help further our state’s economic and environmental goals.”
