Exelon has sealed a deal to buy Entergy’s James A. FitzPatrick Nuclear Power Plant for $110 million, the utility announced Tuesday, about a week after the New York Public Service Commission approved Gov. Andrew Cuomo’s (D) Clean Energy Standard.
Cuomo’s plan is projected to pay upstate nuclear operators up to $1 billion in zero-emission energy credits through 2019, staving off clsoure of FitzPatrick and Exelon’s two current nuclear plants, the R.E. Ginna Nuclear Power Plant and the Nine Mile Point Nuclear Station, which is adjacent to FitzPatrick in Oswego County.
After months of discussions, talks between the two utilities and government officials escalated in mid-July as the Public Service Commission weighed the Clean Energy Standard. Cuomo and executives from each company lauded the deal Tuesday during a press conference outside FitzPatrick.
“I believe this country and this state needs a clean-energy policy that is realistic and can be implemented before we destroy this planet, and I believe that nuclear plays an important role in that clean-energy policy,” Cuomo told the crowd. “I believe if FitzPatrick closed, 615 families would be devastated. It would be 615 lost jobs, average wage $120,000 that would be basically irreplaceable in Oswego.”
Citing low natural gas prices, increased operational costs, and a poor market design, Entergy in November announced plans to close FitzPatrick by early 2017. New York officials, including state Sen. Patty Ritchie (R), state Sen. Joseph A. Griffo (R), and state Assemblyman Will Barclay (R), were involved in a number of legislative efforts to save the plant.
The transaction is expected to close in the second quarter of 2017, when Exelon says it will pour $400 million to $500 million into operations, integration, and refueling expenditures at upstate plants. The agreement dictates that Entergy transfer FitzPatrick’s NRC operating license to Exelon. The New York Power Authority will transfer the plant’s decommissioning trust fund and liability to Entergy, which will then transfer them to Exelon, pending federal approvals. The plant’s decommissioning trust fund is estimated at about $700 million.
The plan to transfer ownership of the trust from public to private control drew objections Tuesday from the Alliance for a Green Economy (AGREE) and other watchdogs railing against Cuomo’s Clean Energy Standard as a nuclear bailout.
“Governor Cuomo has truly given away the store,” AGREE Program Director Jessica Azulay said in a statement. “As if the billions of dollars of consumer money gifted in subsidies to the nuclear industry weren’t enough, now we find out that another $700 million in public assets will be handed to Exelon in order to sweeten the deal for their purchase of FitzPatrick. Is there no limit to the expense or risk that the Governor is willing to hoist on us in order to ensure Exelon buys FitzPatrick?”
Nuclear Information and Resource Service Executive Director Tim Judson said public ownership of the fund ensures responsible cleanup of the site when the plant retires.
“This transaction is monumental,” Exelon President and CEO Chris Crane said Tuesday. “It not only is good for the environment, it’s good for the community, it’s good for the economic benefits, but it sets a precedence for the rest of the country.”
Entergy Chairman and CEO Leo Denault called it “a fantastic day for Entergy,” and thanked Cuomo and Crane for “staying at the table” during negotiations. He noted Cuomo’s “forward thinking” in recognizing nuclear as a tool in combating climate change, and establishing New York as a model for the rest of the United States.
“We don’t like to admit it quite often, but quite often we’re looking to New York to see what’s new, what’s next, the latest trends,” Denault said. “Wouldn’t it be great if the latest trend became: ‘We really want to meet a very aggressive carbon goal, and we’re going to do it using the most effective tool that has ever been developed to do that, to date, in nuclear power.”
Under the Clean Energy Standard, Cuomo’s goal is to source half the state’s power through renewable sources by 2030.
