With Exelon's Nine Mile Unit 1 at risk, New York lawmakers press for nuclear subsidy

Dive Brief:

  • The chairman of New York Senate Energy and Telecommunications Committee wants energy regulators to immediately implement a credit for nuclear generation, rather than waiting for the state's entire Clean Energy Standard to be finalized, RTO Insider reports. 
  • The push comes days after Exelon said it was considering closing Unit 1 at its Nine Mile Point facility, unless it received assurances from the state by the end of September that it could count on enhanced payments.
  • RTO Insider reports the New York Public Service Commission responded with assurances that the new Clean Energy Standard would be in place this summer, before Exelon's deadline for the 620-MW nuclear unit.

Dive Insight:

New York's new Clean Energy Standard is still not ready, but one lawmaker wants the Public Service Commission to go ahead and roll out nuclear credits in order to save at least one at-risk plant.

Exelon last week informed regulators that if it does not receive financial assurances by the end of September, the company will begin the process of shutting down Nine Mile Point Unit 1. 

That pushed state Sen. Joseph Griffo (R), chair of the Energy and Telecommunications Committee, to call for immediately implementing a new nuclear credit, reports RTO Insider.  “There is one thing everyone agrees on, and that’s the pressing need to make sure that our nuclear fleet does not retire prematurely due to current economic conditions in the energy sector,” said Griffo.

Exelon said it has yet to purchase fuel for a refueling which will need to happen in March 2017.

Its subsidiary, Constellation Energy Nuclear Group (CENG), operates Nine Mile and told the Public Service Commission it will need the certainty of an order approving the CES, along with the Department of Public Service Staff’s review of cost data and PSC approval of CENG’s "compensation under the program before CENG makes the investment of approximately $55 million that will be necessary to refuel Nine Mile Unit 1."

RTO Insider said the PSC responded with a statement last week saying it "fully understands the difficulties facing the upstate nuclear fleet, which is why we have been working for the past six months to create a plan that will ensure the future viability of these emission-free resources and continue New York’s progress in reducing greenhouse gas emissions." 

Regulators said the standard would be completed this summer. However, work is still being done to determine how to implement the new standard. Industry stakeholders met at a technical conference earlier this month to discuss the merits of power purchase agreements and renewable energy certificates to meet renewables goals, and what impact that could have on gas-fired generation prices.

The Clean Energy Standard aims to help New York reach 50% renewables by 2030, while also supporting the state's struggling nuclear plants. A proposed third tier of payments is set for nuclear, and calls for utilities to source 15.7% of their power from the resource by 2020. 

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Filed Under: Generation
Top image credit: Exelon