Policy

Will the closure of FitzPatrick Nuclear Power Plant jeopardize New York’s clean energy future?

The FitzPatrick Nuclear Power Plant this month announced it will close after its sole reactor runs out of fuel next year and the plant’s supporters are blaming a system that ignores its value as a clean energy resource.

The plant’s supporters say the state is too narrowly focusing on ensuring energy reliability. And further complicating the picture, the political discussion surrounding the plant is being driven by the significant economic blow Oswego County could feel from its closure and, with it, the loss of more than 600 jobs.

Gov. Andrew Cuomo and local politicians quickly warned of the economic repercussions of the closure of the nuclear plantand vowed to try to stop its owner, Entergy, from shuttering it.

I strongly caution Entergy not to use the threat of job losses as a means of prodding economic relief to help their bottom line,” Cuomo told the State of Politics blog in a recent statement. “This tactic has been attempted by others in the past and has been unsuccessful. In this state, an entity called the Public Service Commission has oversight over services deemed to be in the statewide public’s best interests. Entergy should keep that in mind. Any decisions will be made on the merits.”

Although Cuomo has vowed to take every “legal and regulatory” avenue to stop the plant’s closure, how much leverage the state has in preventing that outcome depends on the Public Service Commission’s determination on whether the state’s energy grid needs FitzPatrick’s output to ensure systemwide reliability.

Independent Power Producers of New York President and CEO Gavin Donohue warned against government involvement and said the state picking winners and losers and bailing out some plants is a “recipe for disaster,” but stressed the importance of nuclear power for New York state.

A New York Independent System Operator report found New York’s six nuclear power reactors generated 30 percent of the state’s electricity last year.

According to Entergy, FitzPatrick had decreased in value and could not compete against low natural gas prices and a “poor market design that fails to properly compensate nuclear generators.”

On Wednesday, Entergy said in a statement that discussions with state officials had been “unsuccessful” and had concluded. The company filed with the Nuclear Regulatory Commission a formal notice of its intention to close the plant, which is the next step in the process of shutting it down.

Entergy already paid the New York Independent System Operator, which operates the state’s electric grid and monitors the wholesale electricity markets, for a confidential study of FitzPatrick which concluded that the closure would pose no problem.

Now that the company has officially announced its intent to close the plant, the commission will start its public review.

Though Cuomo is fighting to keep the FitzPatrick plant open, he is also actively seeking to close Entergy’s other nuclear power plant, Indian Point, because of his safety concerns due to the plant’s proximity to New York City. Located in Central New York, FitzPatrick does not pose the same safety risk.

But in light of the potential closure at FitzPatrick, industry sources are arguing that meeting clean energy goals not just reliability should be used as a basis for keeping power plants open.

In addition to the potential loss of two nuclear power plants, the Cuomo administration this year decided to ban high-volume hydraulic fracturing. Industry experts argued that missing out on a potentially productive natural gas industry in New York could also jeopardize the state’s environmental goals, because the state would be forced to rely more heavily on its dirtier coal plants.

In 2014, the U.S. Environmental Protection Agency announced its Clean Power Plan, which establishes state-by-state goals for carbon emissions reductions. New York is already a member of a nine-state coalition called the Regional Greenhouse Gas Initiative, which has committed to the federal plan to reduce carbon pollution from power plants by 30 percent below 2005 levels by 2030.

Now, in the face of the loss of one or even two nuclear power plants in New York, some representatives of the energy industry are sounding more like environmentalists as they rally around the federal clean energy plan.

“If (nuclear) goes away, it’s not going to be easily replaced from an infrastructure standpoint, an environmental standpoint or – more importantly – a cost standpoint,” Donohue said. “Nuclear power is a very important fuel source. It provides diversity and flexibility in our system. It needs to be factored in that way.”

Experts told City & State that nuclear power plants are costly to operate and are competing in a market in which natural gas prices have sunk to very low levels.

“It’s a negative result, unfortunately, of the way the market is constructed,” said Matthew Cordaro, a trustee of the Long Island Power Authority. “From a clean energy perspective, (FitzPatrick) provides over 800 megawatts of non-carbon-based energy throughout the state. The unusual attributes of a nuclear plant, FitzPatrick in particular, are not recognized and it makes the operation of the plant a financial hardship.”

Tom Kauffman, director of media relations for the Nuclear Energy Institute, said New York’s deregulated energy market makes it more difficult for nuclear power plants to thrive and grow.

“Deregulated markets – not in every case – are primarily driven on costs,” Kauffman said. “The regulated markets are markedly different in that they value the attributes of nuclear energy, which is carbon-free, baseload, highly reliable and they also like a diverse energy portfolio.”

Experts also noted the state provides incentives for solar and wind energy to promote clean energy, but does not offer nuclear similar investments. As just one example, Cuomo has invested heavily in the creation of NY Green Bank, a $1 billion state-sponsored financial entity which promotes clean energy growth for solar and wind.

“It will be very difficult to meet our RGGI goals, our regional greenhouse gas goals, and it would be extremely difficult to meet those goals for the Clean Power Plan without nuclear assets,” said Darren Suarez, director of governmental affairs for the Business Council of New York State. “People are valuing clean power and we have those assets in upstate New York. Maybe that’s what we should be selling to upstate communities and maybe that’s how we keep FitzPatrick.”

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