R.E. Ginna Nuclear Power Plant LLC on Sept. 11 filed with the Federal Energy Regulatory Commission “Amendment No. 5” to a Reliability Support Services Agreement (RSSA), which basically kicks the can down the road for a few days as the power plant operator tries to work out a long-term RSSA deal with Rochester Gas and Electric (RG&E).
This latest amendment provides that the deadline for Ginna to provide RG&E with 10 days written notice of termination pursuant to Section 2.1(c) of the RSSA is extended to Oct. 2. Ginna requests that the commission waive its prior notice requirement and permit the amendment to become effective as of Sept. 11, the date of this filing, so that Ginna can continue settlement negotiations pertaining to the RSSA. RG&E has authorized Ginna to inform the commission that its backs both the acceptance of the amendment and the requested waiver of prior notice.
On Feb. 13, Ginna filed with the commission the RSSA, executed by Ginna and RG&E. Pursuant to the RSSA, Ginna provides Reliability Support Service from Ginna’s R.E. Ginna Nuclear Power Plant to RG&E to preserve reliability in the Rochester, New York, area. As originally filed, the RSSA provided that Ginna would have “the right to terminate this Agreement without liability upon ten (10) days’ prior written notice if the Acceptance Date is not achieved by July 1, 2015” and that this termination notice “may not be issued later than August 1, 2015.”
Acceptance Date” is defined as the date when the following two conditions precedent are “satisfied or waived by the parties”: the issuance by FERC of an order accepting the RSSA under Section 205 of the Federal Power Act, without modification that is adverse in a material way to either Ginna or RG&E; and the issuance by the New York State Public Service Commission (NYPSC) or an order accepting the RSSA and approving full cost recovery.
On April 14, the federal commission accepted the RSSA in part subject to compliance and refund, rejected it in part, and set for hearing and settlement whether the RSSA rate was just and reasonable. The Chief Administrative Law Judge designated the Judge Jennifer Whang as presiding settlement judge. As of July 1, 2015, the NYPSC did not issue an order accepting the RSSA and permitting cost recovery and neither party had waived the preconditions to the Acceptance Date.
As such, pursuant to Section 2.1(c), Ginna could have terminated the RSSA at any time before Aug. 1. On July 31, Ginna and RG&E executed the “Amendment No. 2” to the RSSA to extend Ginna’s right to terminate to Aug. 17 On Aug. 17, Ginna and RG&E executed the “Amendment No. 3” to extend Ginna’s right to terminate to Aug. 27. On Aug. 27, Ginna and RG&E executed the “Amendment No. 4” to extend Ginna’s right to terminate to Sept. 11. The First Extension filing was accepted by unpublished letter order on Aug. 27. Both the Second Extension Filing and the Third Extension Filing are pending before the federal commission.
“Settlement negotiations before Judge Whang continue, and Ginna remains committed to settlement,” it said in the Sept. 11 filing. “Accordingly, to permit the parties to continue settlement negotiations while preserving Ginna’s termination rights under RSSA Section 2.1(c), Ginna hereby submits this filing to extend Ginna’s option to terminate the RSSA. Ginna and RG&E agreed to modify the RSSA by adding the amendment. The amendment reflects that Section 2.1(c) of the RSSA will be modified such that Ginna may terminate the RSSA upon 10 days’ written notice by providing such written notice of termination to RG&E on or before October 2, 2015.”
Ginna owns the R.E. Ginna Nuclear Power Plant, located in Ontario, New York, which consists of one pressurized water reactor unit with a capacity of 581 MW. RG&E is the transmission owner to which the facility is interconnected.
In January 2014, Ginna communicated to the New York State Independent System Operator (NYISO) and RG&E its intent to potentially retire the plant due to insufficient revenues. The NYISO and RG&E then conducted a reliability study, dated as of May 12, 2014, which determined that retirement of this unit would result in bulk transmission system and non-bulk local distribution system reliability violations in 2015 and 2018.
Ginna, an Exelon Corp. (NYSE: EXC) company, ran into problems with low open-market power prices following the expiration in June 2014 of a fixed-price power purchase agreement with RG&E for the power from this plant.