Entergy to Close Nuclear Plant in Central NY

Entergy will close the James A. FitzPatrick Nuclear Power Plant near Oswego by early 2017.

The high volume and low cost of fracked gas is a big part of the reason.

“Given the financial challenges our merchant power plants face from sustained wholesale power price declines and other unfavorable market conditions, we have been assessing each asset,” Leo Denault, Entergy’s chairman and chief executive officer, said in a prepared statement. “As part of this review, we previously announced the closure of the Pilgrim Nuclear Generating Station in Massachusetts and have now decided that despite good operational performance, market conditions require us to also close the FitzPatrick nuclear plant,” Denault continued.

FitzPatrick employs more than 600 workers and generates 838 megawatts of nearly carbon-free electricity, enough to power more than 800,000 homes. It has been a part of the Oswego County community since it began generating electricity in 1975, the company said.

The company’s announcement infuriated Gov. Andrew M. Cuomo, whose administration had been negotiating to keep the plant open.

“The closing of the James A. FitzPatrick Nuclear Power Plant will devastate the lives of the more than 600 employees and their families,” Cuomo said in a statement Monday. “Good corporate citizenship must appreciate that there are many factors that count as the ’bottom line.’ The State of New York will pursue every legal and regulatory avenue in an attempt to stop Entergy’s actions and its callous disregard for their skilled and loyal workforce.”

Cuomo’s position on FitzPatrick is very different from his position on Indian Point in Buchanan. He’s been calling for closure of that nuclear power plant for years. Indian Point is in a fight for recertification.

Here are some details from the company’s statement:

· Sustained low current and long-term wholesale energy prices, driven by record low gas prices due to the plant’s proximity to the Marcellus shale formation, have reduced the plant’s revenues. Current and forecast power prices have fallen by about $10 per megawatt-hour, which equates to a projected annual loss of more than $60 million in revenues for FitzPatrick.

· Flawed market design fails to recognize or adequately compensate nuclear generators for their benefits. FitzPatrick and other nuclear power generators provide a key fuel diversity benefit with significant climate-related advantages. In addition to generating virtually carbon-free electricity, nuclear plants offer onsite fuel storage, maintain grid reliability and serve as a significant source of large-scale 24/7 energy generation.

· The plant carries a high cost structure because it is a single unit. Entergy has already invested hundreds of millions of dollars to improve FitzPatrick’s reliability, safety and security. While the company will always make investments needed to assure safe operations, it considers the long-term financial viability of operating plants in markets that ignore the benefits of nuclear power.

· The locational constraints reduce the plant’s revenues. The region has excess power supply and low demand.

Also on Nov. 2 Entergy reported a third quarter 2015 loss of $4.04 per share.

It’s the third plant in the Northeast that Entergy has decided to close. The Vermont Yankee reactor closed in December, and the company in October announced it would close the Pilgrim reactor near Boston by mid-2019.

Also in October, the company said it would take a $1.1 billion charge in writing down the value of the Pilgrim and FitzPatrick plants, according to Bloomberg Business.

PHOTO: FitzPatrick nuclear power plant on Lake Ontario/Entergy