UPDATE: NY Adopts Clean Energy Standard that Subsidizes Nuclear Power

The New York Public Service Commission voted Monday to adopt a controversial Clean Energy Standard along with a zero emissions credit provision meant to subsidize struggling upstate nuclear power plants.

“New Yorkers are the big winners from the PSC’s very important decision to adopt the ZEC," said Rob DiFrancesco, director of New York AREA, a pro-nuclear energy group.

"This is a dangerous mistake," said Manna Jo Greene, environmental director of Hudson River Sloop Clearwater.

The plan had lots of support and opposition in the Hudson Valley.

It is meant to move the state along its road to energy independence from fossil fuels. The plan is to cut carbon emissions by 40 percent and expand renewable power to account for 50 percent of electricity generation by 2030. As part of that work, it would subsidize struggling nuclear power plants in upstate New York, providing a zero emissions credit to plants that are on the verge of closing.

Some environmental groups were outraged.

"The $8 billion subsidy for nuclear power is twice the amount estimated to be invested in renewable energy through the Clean Energy Standard," said Tim Judson, executive director of the Nuclear Information and Resource Service. "The Indian Point reactors will become eligible to apply for subsidies in two years, and if they are included in the plan, the cost will soar to over $10 billion."

Greene said: “Today’s decision represents a $10 billion nuclear subsidy that will not be invested in renewables and energy efficiency. This means New Yorkers will no longer be able to choose 100 percent green energy, even if they want to. Unfortunately, the Public Service Commission is relying on the Nuclear Regulatory Commission’s lax oversight of aging failing nuclear facilities to protect public health and safety. This is a dangerous mistake.”

Many were pleased. Environmental Progress, a coalition of scientists, environmentalists, and concerned citizens, held a rally in Albany before Monday's vote urging the standards be adopted.

“Nuclear energy is the safest way we have to generate reliable, carbon-free power. The Cuomo Administration has bravely recognized the necessity of Nuclear Energy in the fight against climate change, and they should be applauded for that,” Michael Shellenberger, president of Environmental Progress, said in a statement.

Commentators have focused on the subsidy for nuclear energy included in the Clean Energy Standard but have neglected to note that New York already subsidizes wind and solar to the tune of $22/MWh for 20 years regardless of the price of electricity in the future, said Eric Meyer, organizing director for Environmental Progress.

By contrast, the proposed nuclear subsidies are capped at $17.48/MWh for the first two years and can only be received by plants located in markets with depressed electricity prices, so Indian Point does not qualify, he said. And, since it is unlikely that electricity prices will remain low, these subsidies would not be in effect for long.

“It takes guts to defend Nuclear Energy in this hostile political climate, but the data is clear — it’s one the best weapons we have to fight climate change. Losing these plants would be crushing for both the communities that depend on them, and New York's Climate Goals,” added Meyer, who said he thought the environmental groups in favor of the plan far outnumbered those opposed.

Energy Market Analysts at The Brattle Group have estimated that if upstate nuclear plants were closed, electricity prices would surge to the tune of $1.7 billion. Alternatively, including nuclear power in the Clean Energy Standard will amount to a net savings of $1.2 billion for New York ratepayers.

The plan's subsidies for upstate nuclear power plants promise nearly $8 billion dollars over 12 years to Exelon Corporation, the nation’s largest nuclear energy company, for its two struggling nuclear plants in upstate New York and for a third it is proposing to buy — the FitzPatrick plant near Oswego, which Entergy announced it would close by 2017.

Gov. Andrew Cuomo has fought to keep FitzPatrick open and close Indian Point, Entergy's Hudson Valley plant.

In response to the PSC decision, Entergy issued this statement:

Entergy applauds the New York State Public Service Commission for its decision today that recognizes the substantial contribution New York’s nuclear power facilities make to the state’s clean air. The state has adopted the first program in the country that values the zero-emission attributes of this essential clean energy resource.

A Clean Energy Standard program that compensates zero-emission nuclear power facilities for their clean energy contribution, and includes all of the state's existing nuclear generators, is a groundbreaking and critically needed step forward.

Entergy spokeswoman Patricia Kakridas said, "Our discussions regarding the potential sale of FitzPatrick to Exelon are ongoing. Adoption of the CES is a critical component of the overall transaction we are discussing with Exelon regarding FitzPatrick. We will review the order to confirm it addresses the issues we hoped it would address, but at this point, we are very encouraged."

A utility workers union went further.

Ted Skerpon, chairman of the IBEW Utility Labor Council of New York, issued the following statement:

“Thanks to Governor Cuomo and the New York Public Service Commission (PSC), our upstate nuclear plants, Ginna, Nine Mile Point and FitzPatrick, will continue to operate well into the future, providing clean energy today to help us meet our clean energy goals of tomorrow. In implementing the CES, the Cuomo Administration has displayed its unwavering dedication to our environment, and our upstate region and its nuclear facilities. Thanks to the leadership of the Governor, New Yorkers can continue to reap the many economic and environmental benefits these plants provide."

Meanwhile, Con Ed said:

New York State’s efforts, under the leadership of Governor Cuomo, to provide residents with a cleaner energy future are ambitious, visionary and the right direction for our customers. There are additional costs associated with renewable energy, but the costs of not taking steps now to reduce emissions and protect the planet for future generations are even greater.

We look forward to working with state regulators and policy leaders to achieve 50 percent renewables and a 40 percent reduction in carbon emissions in the most cost-effective manner to our customers. We are pleased the Commission has rejected mandating that utility customers pay for costly power purchase agreements from private developers. We continue to believe that large-scale solar and wind farms can be operated by utilities at a much lower cost to customers, and will work with all parties on these and other alternatives. We will continue to engage in a constructive exchange of ideas with everyone involved in this effort.

The economic benefits are clear, Rob DiFrancesco, director of New York AREA, said in his full statement.

“The PSC and Governor Cuomo are both to be commended for their very positive leadership on this measure.The Department of Public Service has documented that the ZEC will preserve $1.7 billion in annual economic benefits for New York, including thousands of jobs and large local, regional and state tax payments. Without the ZEC, upstate nuclear power plants are certain to close and New York would see a dramatic increase in its carbon emissions from power plants, a rise of as much as 15.5 million tons a year.

“New Yorkers win because they keep abundant, clean sources of power that generate billions of dollars in annual economic activity in the state, while preserving emission free nuclear power plants that help the state meet its goals of reducing greenhouse gas emissions by 40 percent.”

SEE: Support, Opposition to NY Plan to Subsidize Nuclear Power Plants Strong in the Hudson Valley