Dive Brief:
- New York energy regulators' tolerance of unprofitable nuclear plants will be tested in the coming months prepare to consider proposals to keep the Ginna nuclear plant open, Bloomberg reports. Exelon, the operator, says it will need to nearly double power prices to keep the plant running.
- The utility says 2016 forecasts show it will require $71 per MWh to earn an 11% return from the 581 MW plant in upstate New York, and $56 to $64 per MWh to break even. The average wholesale power price in the Rochester market served by the Ginna facility was $38.83 per MWh over the last five years.
- Low natural gas prices and low-cost renewables and energy efficiencies have driven the price of electricity down while keeping aging nuclear facilities safe is increasingly unaffordable. NY regulators still want the Ginna facility operating because its emissions-free generation will help meet reduced greenhouse gas emissions requirements coming in the EPA Clean Power Plan.
Dive Insight:
The Ginna plant lost over $100 million between 2011 and 2013, but the New York Public Service Commission will consider whatever new deal Exelon is able to hammer out with Rochester Gas & Electric (RG&E), which presently holds an expiring power purchase agreement (PPA) at $44 per megawatt-hour.
The single reactor Ginna facility’s above-electricity-market cost of $80 million per year is expected to cost an average RG&E customer at least $18 per month extra.
Four U.S. nuclear reactors were shuttered in 2013 due to the high costs of operations or safety retrofits.
Exelon’s Illinois Clinton facility, Entergy’s Massachusetts Pilgrim facility, and FirstEnergy’s Ohio Davis-Besse facility are all single reactor facilities in financial jeopardy.
Exelon recently asked Illinois regulators to subsidize its nuclear plants there for their emissions-free value.
New York power producers NRG Energy and Entergy, which owns the Indian Point nuclear facility, say regulators should require Exelon to compete or fail against alternatives such as new transmission and new generation.
