New York’s Public Service Commission on Monday approved Gov. Andrew Cuomo’s Clean Energy Standard, which could pay upstate nuclear power plant operators up to $1 billion in zero-emission energy credits over the first two years of the program.
The four-member board voted 3-1 in support of the plan, with one commissioner registering a “concur” vote, which is considered a reserved “yes.” Supporters, most notably utilities Exelon and Entergy, have argued that the zero-emission credit program is vital for keeping upstate plants alive and that nuclear must be part of the equation if New York is to reach Cuomo’s goal of providing 50 percent of the state’s power from renewable sources by 2030. Environmentalists and other opponents have argued the program will drive windfall profits for nuclear operators when cleaner, more affordable alternatives like wind and solar exist.
Entergy’s James A. FitzPatrick Nuclear Power Plant and Exelon’s R.E. Ginna Nuclear Power Plant and Nine Mile Point Nuclear Station are either scheduled or expected to close, with the operators citing economic hardship. Exelon has been in discussions with Entergy, however, to purchase FitzPatrick, while betting on PSC approval of the credit program to sustain its current sites. The company has said the deal could be finalized as early as mid-August. The zero-emission credits will be available starting in April 2017, pending administrative approvals from the PSC.
“Bottom line, preventing the premature closure of carbon-free, 24/7, nuclear facilities is, in my opinion, a wise policy,” Commissioner Diane X. Burman, who registered the “concur” vote, said Monday during the PSC meeting.
Burman noted conflicting analyses from PSC staff, utilities, and environmental groups regarding the plan, most notably concerning cost projections, throughout the approval process. She also said she understands the proposal and the timeline in which it was decided were not perfect.
The PSC on July 15 extended the public comment period to July 22, drawing groans from environmentalists. The proposal was originally opened for public comment on July 8, and the anti-nuclear Alliance for a Green Economy (AGREE) three days later wrote to Public Service Commission Kathleen Burgess demanding a 45-day public comment period.
AGREE and three other environmental groups in a joint filing with the PSC said the program will result in “likely the largest gift of public funds to a single corporation in New York’s history.” The groups said the credits will cost the state anywhere from $7.6 billion to $10 billion over the course of the program, which is scheduled to run through 2029.
The PSC in Monday’s order stated that while the first two years of payments are calculated to be as much as $965 million, the state will achieve a carbon-reduction benefit of $1.4 billion. The proposal allows the state to enter into multiyear contracts for the purchase of zero-emission credits. The nuclear providers will purchase the credits starting at $17.48 per megawatt hour, an amount that can be adjusted every two years. The utilities would recover the costs for the credits from ratepayers through commodity charges on customer bills.
“(Zero-emission credits) provide a vehicle for monetizing the State’s environmental preferences and the program will allow time for new clean energy technologies to mature and take their place in the ultimate generation mix,” the PSC proposal reads.
“In my mind the decision is fairly clear,” Chairwoman Audrey Zibelman said Monday. “The concept for not paying for the nuclear attributes and shutting them down now and looking at energy efficiency and renewables as a substitute is really not a practical solution. We could not possibly replace those carbon attributes and as a result, in all likelihood, we would have an increase in amount of fossil fuel in our midst and our goals of carbon reduction would not be met because those fossil fuels as attributes simply don’t exist there. And so this is not an anti-gas movement. This is actually a pro-diversity and recognizing the importance of fuel diversity and carbon reduction as an integral part of a utility’s system.”
Commissioner Gregg C. Sayre, who lives 15 miles from the Ginne plant, said he is convinced that the benefits of the program – in terms of holding down carbon emissions, retaining jobs, and maintaining a broad array of generation resources – outweigh the costs to New York ratepayers. The PSC estimates that a residential customer consuming the statewide monthly average of about 600 kilowatt hours would see an impact of less than $2 per month for the first two years.
“I do not see any way that we could quickly replace the output of the upstate nuclear plants with renewable energy,” Sayre added. “Realistically we would need to produce more natural gas and probably build more natural gas generating stations than we otherwise would need if the nuclear plants shut down in the near future, and I don’t think that’s the result we want.”
Commissioner Patricia L. Acampora said New Yorkers deserve affordable, safe, and reliable energy sources, and Monday’s decisions provides choices to residents.
