Dive Brief:

• The U.S. Nuclear Regulatory Commission last week approved the transfer of the operating license belonging to Entergy's FitzPatrick nuclear facility to Exelon as part of a $110 million deal to keep the plant operating.
• The NRC's approval is the last regulatory hurdle of the deal, Syracuse.com reports, with Exelon officials anticipating to close out the deal later this month. 
• Entergy had planned to shutter the struggling FitzPatrick plant, but Exelon agreed to purchase it with the caveat that New York developing a Clean Energy Standard subsidy program to keep it profitable. But the Zero Emissions Credit plan is now being challenged by the Electric Power Supply Association, which argues the credits intrude on federal jurisdiction of wholesale markets.

Dive Insight:

New York's plan to save the state's nuclear fleet is tied up at the Federal Energy Regulatory Commission. The agency has only two members, preventing any decisions on major cases until a third commissioner is seated for a quorum.

While the deal moves ahead, federal regulators will still need to make broader decisions about how to credit the carbon-zero output from nuclear plants, which struggle against natural gas plants and renewables with lower fixed costs. While generators opposing the plan say the ZECs intrude into wholesale power markets, Exelon has argued they are within the state's purview.

"The principles establishing that RECs fall within state jurisdiction do not turn their pricing mechanism, whether market-based or administrative," Exelon said in its reply at FERC. The utility argued RECs and ZECs are “separate commodities from … capacity and energy,” citing case law precedents.

The underlying argument is that the credits value the environmental attributes rather than the energy. In 2016, as several plants faced market difficulties and were considering shutting down, New York regulators approved rules calling for 50% renewable energy and included nuclear credits to keep the plants open.

The Fitzpatrick, Ginna and Nine Mile nuclear plants are expected to produce 27.6 million MWh of carbon-free generation per year, and Gov. Andrew Cuomo (D) has set a goal of cutting greenhouse gas emissions 40% from 1990 levels by 2030, and 80% by 2050. After the transfer of FitzPatrick, Exelon will own all of the plants.