New York PSC plans road show for deal extending life of Ginna nuclear plant

The New York State Public Service Commission will hold public statement hearings on a proposal for a Reliability Support Services Agreement (RSSA) between R. E. Ginna Nuclear Power Plant LLC (GNPP) and Rochester Gas & Electric (RG&E) that would allow for continued operation of the Ginna nuclear plant located in the Town of Ontario, Wayne County.

In a November 2014 order, the commission found that continued operation of the Ginna Facility is necessary to preserve the reliability of the electric system, and directed RG&E to enter into negotiations with GNPP for an RSSA. On Feb. 13, RG&E filed a request with the commission seeking approval of an RSSA. RG&E also sought changes to its tariff to allow the utility to charge ratepayers for the costs associated with the continued operation of the power plant. Those costs would be recovered by means of a surcharge mechanism.

Under the terms of the RSSA, GNPP would continue to operate the Ginna Facility in return for monthly payments from RG&E of $17.5 million, less the value of certain revenues received by GNPP through the sale of energy, capacity, and ancillary services. The agreement would run from April 1, 2015, through Sept. 30, 2018. The RSSA may be terminated early, upon payment of a settlement amount, if alternative means of ensuring electric system reliability can be implemented by RG&E. It may also be extended if operation of the Ginna Facility is needed for reliability beyond the initial term of the agreement.

Although the term of the agreement begins on the April 1, 2015, RG&E will only begin making payments after the RSSA has received necessary government approvals. If the RSSA is approved, RG&E then will be required to provide payment of an amount equal to what would have been owed during the period from April 1, 2015, to the date of the approval, with interest.

The public will have an opportunity to present comments at hearings before an Administrative Law Judge. The public statement hearings will be held as follows:

  • May 6, 2015 – Town of Webster Parks & Recreation Building.
  • May 7, 2015 – City of Rochester, Council Chambers.

The PSC said in an April 28 notice that comments are requested by May 20, but will be accepted throughout the pendency of this proceeding.

Exelon unit says this RSSA is needed, or the plant will be retired

The R.E. Ginna Nuclear Power Plant LLC affiliate of Exelon (NYSE: EXC) filed with both the Federal Energy Regulatory Commission and the New York PSC on Feb. 13 what could be a life saving agreement for this nuclear plant. R.E. Ginna had opened a proceeding last year at the New York PSC where it said that due to the expiration in 2014 of a long-term power sales deal, its nuclear plant couldn’t survive on the low-priced New York power market. So it wanted to work out the RSSA reliability deal with local utility Rochester Gas & Electric that would keep the plant operating for the next few years for grid reliability needs.

Ginna is a 581-MW, single-unit pressurized water reactor located along the south shores of Lake Ontario, in Ontario, New York, approximately 20 miles northeast of Rochester, New York. In 2004, the Nuclear Regulatory Commission extended the facility’s license to operate to September 2029.

From 2004 until the expiration of a power purchase agreement (PPA) with RG&E on June 30, 2014, RG&E purchased 90% of the generation output of the Ginna Facility. Since the expiration of the RG&E PPA, the Ginna Facility has been operating as a fully merchant generator in the wholesale power market administered by the New York ISO.

Before the expiration of Ginna’s PPA with RG&E, management analyzed the Ginna Facility’s projected revenues from energy and capacity sales in the NYISO markets and determined that those revenues would not be sufficient to cover the cost of the Ginna Facility’s continued operation, including required new capital investments, a Feb. 13 filing noted. Accordingly, in January 2014, representatives of company management met with commissioners of the NYPSC, RG&E, and NYISO to discuss the revenue insufficiency determination and to notify them that, absent a confirmed reliability need and unless supported by an acceptable RSSA, Ginna’s management would recommend that Ginna’s Board of Directors authorize the facility’s retirement as soon as practicable.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.