Dive Brief:
- Entergy Corp. announced Wednesday it is in talks with Exelon over the possible sale of its James A. FitzPatrick nuclear plant in upstate New York, throwing a potential lifeline to the struggling facility which Entergy had planned to close.
- The news comes just days after staff of the New York Public Service Commission revealed details of the state's Clean Energy Standard nuclear subsidies, designed to keep Fitzpatrick and two other upstate nuclear plants online.
- In November, Entergy revealed plans to shutter the 838 MW plant in 2017, but the generator also committed to do whatever it could to save the facility. A deal with Exelon, the company said, would satisfy that promise.
Dive Insight:
Details of New York's plan to keep nuclear generation running may have come just in time to save the FitzPatrick plant. Entergy said in June that it was too late, but the state's promise of hundreds of millions in credits may have influenced discussions with Exelon.
“In keeping with our corporate strategy to move away from merchant power markets and toward a company operating exclusively as a utility in regulated markets, we are working with Exelon to come to commercial terms on a sale transaction that depends largely on the final terms and timeliness of the New York State Clean Energy Standard,” Entergy Wholesale Commodities President Bill Mohl said in a statement.
In addition to being dependent on the Clean Energy Standard, sale of the plant would also be subject to completion of definitive commercial agreements, as well as regulatory approvals. If a sale does not happen, Entergy said it will move ahead with decommissioning.
“Our focus remains on providing employees and the community the best opportunity we can to prepare for either a transition to a new owner or a shutdown and decommissioning,” said Site Vice President Brian Sullivan, Entergy’s top official at FitzPatrick.
Entergy said negotiations are "ongoing," with hopes to complete a deal next month. The company does not yet have financial details to release.
New York's nuclear subsidies would cover the Fitzpatrick, Ginna and Nine Mile plants for 12 years, starting at up to $482 million a year initially and exceeding $800 million in the final years. Subsidies would start at $17.48/MWh, slowly rising to $29.15/MWh in the last two years of the program.
The subsidies are based on anticipated power prices of roughly $39/MWh. The package could come to a vote at an Aug. 1 regulatory meeting, following the conclusion of a written comment period on July 18.
