Exelon takes first concrete step to try to save uneconomic reactor

Exelon's Ginna reactor, on Lake Ontario. Photo from IAEA.

Exelon’s Ginna reactor, on Lake Ontario. Photo from IAEA.

It’s no secret that Exelon, the nation’s largest nuclear utility, has a bunch of uneconomic and aging nuclear reactors on its hands. We’ve written about that here and here, for example.

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.

Michael Mariotte

July 14, 2014

Permalink: https://safeenergy.org/2014/07/14/exelon-takes-first-concrete-step/

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7 thoughts on “Exelon takes first concrete step to try to save uneconomic reactor

  1. Peter Sipp

    Soon Ginna will need expensive little items like steam turbines, reactor pressure vessel heads and then there is the pesky collection of the nuclear waste collected there. RG&E will be very prudent to politely decline exelon’s arm twisting and close Ginna. The rate payers will appreciate Ginna’s closing too. The unborn will appreciate closing Ginna. Because there will be that much less irradiated metals and nuclear waste to have to tend for the next 100,000+ years. After all, only a stupid bird fouls it’s own nest.

  2. Peter Sipp

    I have had all day, and I need to add the following: I know from personal experience how important a steady job is. The longest term of employment for me has been 3 1/2 years. One year i worked 12 different shut downs as a non union pipe welder. So I understand how frightened the Ginna workers must be. At the same time, I was forced to find employment over & over, So will the Ginna crew. I have survived. I have not gone with out. So closing Ginna needs to come sooner not later. U.S. history has proven that an uncompetitive industry closes its doors. This is mostly true for nuclear. There will be jobs decommissioning Ginna and tending the nuclear waste there. Most everyone will have to move away to find employment. A very hard thing to do, granted. But close Ginna, yes.

  3. paxus

    i am wondering out loud here what tactics are available. Can NY rate payers sue (or better threaten to sue) RG&E for unnecessarily increasing their rates? Certainly enough negative press towards RG&E will give it cold feet around this bad proposal.

    1. Peter Sipp

      This is a good idea, threatening to sue RG&E, who is going to get the ball rolling here??? I so want that and all the marginal reactors to close. Imagine, propping up an industry that claimed atomic energy was going to be “to cheap to meter”. They are SOOOOO fill of it!!!!!


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