Dive Brief:

• The deal still requires approval from state and federal regulators, but Politico New York reports that a settlement has been reached to keep the R.E. Ginna nuclear plant operating another 18 months.
• The new deal, a subsidy to end mid-March 2017, is significantly better for customers of the plant, consumer advocates say. A previous proposal to keep the plant operational would have cost ratepayers about twice as much.
• Exelon, which operates the struggling plant, had proposed almost doubling rates to remain profitable as it competes with low-cost natural gas and renewable energy.

Dive Insight:

Ginna isn't operational at the moment – last week the plant went offline for refueling –  but it appears plant owners have struck a deal to continue generating power through at least next year. The deal will still need approval from the New York Public Service Commission and the Federal Energy Regulatory Commission (FERC), but would allow the plant to continue operating while consumers pay about $2 more each month via a surcharge, reports Politico New York. 

Commercial and industrial customers will pay more as well, ranging from 1.5% to 9% each month.

R.E. Ginna Nuclear Power Plant LLC is a subsidiary of Constellation Energy Nuclear Group, and the company has said the facility lost approximately $100 million from 2011 to 2013. The plant has a capacity of 581 MW and serves about 500,000 homes. In 2014, the plant produced 4.6 million MWh with a 96% capacity factor.

But last week, operators removed Ginna from service to begin the station’s planned refueling outage, Exelon announced in a press release. Officials said the shutdown ended a successful 18-month operating cycle that delivered industry-leading levels of safety and reliability.

“The safe, reliable operation of Ginna is always our top priority,” said Site Vice President Joe Pacher in a statement. “In addition to replacing nearly one third of the reactor’s fuel, outage specialists will be inspecting, enhancing and testing plant equipment. To complete this important work, more than 700 additional nuclear professionals will be on-site, providing a crucial boost to the upstate economy before the winter season.”

Last year, Exelon announced it would shutter the plant, but a study from the state's grid operator said the plant was necessary to ensure the region's electrical grid reliability, according to Politico New York. Environmental groups have said the revamped plan is better than the original version, but said Rochester Gas and Electric should have prepped for the shutdown earlier since the utility had "ample warning since early 2013 of Ginna's financial challenges.

Should the plant continue operating, some rate increases appear inevitable. Over the summer, New York regulators approved a 5.2% rate surcharge for Rochester-area consumers to prevent "rate shock" while the final price tag for Ginna operation was being negotiated.