Dive Brief:

• Dominion last year announced it would seek a second license extension for its Surry nuclear facility in Virginia, including the low-cost plant in its plans for meeting customer demand in the state for the next three decades, the Daily Press reports. 
• Licenses for Surry units 1 and 2 were last renewed for 20 years in 2003, and the generators would continue operating until 2052 and 2053 if license renewals are approved. The units began operating in the early 1970s.
• While nuclear units are struggling in some markets, The Daily Press sat down with Dominion Chief Nuclear Officer David Heacock to discuss why Surry continues to be viable, how the company keeps costs low at the plant, and why it makes such a difference which market a nuclear plant bids into.

Dive Insight:

Dominion announced last year its intention to extend Surry's license out to 80 years, but in between that decision and now, a spate of nuclear closures have cast some doubt on the future of the industry. Nuclear power was supposed to be "too cheap to meter," but today it is edged out of some markets by low-cost natural gas and renewable energy that benefits from price subsidies.

"Surry is one of the lowest-cost plants in the United States," Heacock told the newspaper.

According to Daily Press, operating costs at the plant are about two-thirds that reported by 28 plants which submit expense data to the U.S. Nuclear Regulatory Commission. It costs the Surry plant about $25 to produce a MWh of power, meaning the plant can undercut competitors even when factoring in plant upgrades.

Dominion's Surry typically bids 1,750 MW into PJM's day-ahead market at $0/MWh, ultimately accepting a higher price typically set by natural gas-fired generation.

Other plants have not fared as well of late. Exelon has announced it would close the Clinton and Quad Cities plants in the Midcontinent ISO market; in California, Pacific Gas and Electric will shutter Diablo Canyon; and Entergy has shut down Vermont Yankee and plants to close Pilgrim, in Massachusetts, in 2019.

In New York, the state is looking at hundreds of millions in subsidies to keep the Fitzpatrick, Ginna and Nine Mile plants operating another decade.

Heacock told the paper that the decision to pursue a second license extension hinged on whether the costs of new monitoring and equipment would be covered by demand for the next decades ahead. "What's the price of natural gas going to be 20 years from now? That's the problem — when we don't really know what it's going to be 20 days from now," he told the Daily Press.

Dominion Virginia Power filed its 2016 Integrated Resource Plan with Virginia and North Carolina regulators earlier this year. In addition to extending the Surry license, it will also request an extension for units 1 and 2 at North Anna, and wants to develop 400 MW of utility-scale solar in Virginia by 2020, and another 600 MW of non-utility solar in both states by 2017.