And just last Friday, we noted that Exelon’s top nuclear exec said that the company doesn’t “intend” to close any reactors, but that his statement fell far short of an actual denial that it won’t close reactors in trouble.
Now, Exelon admits that one of its uneconomic reactors, the Ginna reactor in upstate New York that it scooped up when it bought Constellation Energy, needs serious help. And if it doesn’t get that help, Exelon says it’s going to close the 44-year old reactor.
In the first concrete manifestation of the type of tactics Exelon plans to use to save its nuclear fleet, the utility is asking the New York Public Service Commission (PSC) to approve a scheme to require Rochester Gas & Electric (RG&E)–the original owner of the reactor–to enter into a long-term, presumably above-market, contract to buy most of the power from the plant.
In fact, on June 30 RG&E just got out of a long-term–10 year–contract to buy 90% of the power from Ginna. Unfortunately, RG&E seems disposed to go along with Exelon, meaning that the PSC would have to step in and force the utility to protect its ratepayers by refusing to approve such a contract.
Exelon and RG&E argue that such a contract is needed to provide “reliability” for RG&E. Exelon even commissioned a study to say so. Never mind that at age 44, the reactor aging process means that “long-term” and “reliability” are probably not the best words to describe Ginna, and the deal is not exactly a safe bet for RG&E, and especially its customers.
As Arnie Gundersen of Fairewinds Associates succinctly explained the proposed deal, “Interesting that when electricity production costs were higher, Ginna made lots of $ and never offered to give some of it back. Now that the production cost market is low, Ginna wants a handout to stay afloat. Not exactly how capitalism is supposed to work.”
An article in the Rochester Democrat and Chronicle noted that “A similar ‘reliability support services agreement’ exists between the owners of a coal-fired power plant in Tompkins County and New York State Electric and Gas Corp., RG&E’s sister company.
“That deal drew criticism from environmentalists because NYSEG was paying to prop up a polluting coal plant. It remains to be seen whether an RG&E-Exelon deal will provoke similar criticism from opponents of nuclear power, some of whom have stated publicly they hope financial pressure would lead to the shuttering of Ginna and other plants.”
Actually, it doesn’t remain to be seen. We guarantee nuclear power opponents will challenge this misguided effort to save an uneconomic atomic reactor from its deserved fate in history’s dustbin.
July 14, 2014
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