Exelon companies say quick action needed to protect two N.Y. nuclear plants

Constellation Energy Nuclear Group LLC (CENG), R.E. Ginna Nuclear Power Plant LLC and Nine Mile Point Nuclear Station LLC on May 9 petitioned the New York State Public Service Commission to initiate a proceeding to accept certain financial data concerning two nuclear plants and determine the appropriate facility costs for the plants under the program expected to be approved in the commission’s Clean Energy Standard (CES) proceeding.

The CES, designed to meet a clean power goal of Gov. Andrew Cuomo, would potentially carve out protection for upstate nuclear plants to help meet CES goals.

The CES proposes a zero-emission credit (ZEC) program to “ensure that emission-free power from eligible operating nuclear generating plants is properly valued.” This program will provide eligible nuclear facilities with compensation for the zero-emission attributes of their production and will serve as a bridge to the state achieving the reductions in greenhouse gas emissions (GHG) envisioned by the State Energy Plan.

“Due to long lead time in planning for and operating nuclear power plants, certain operational decisions concerning the Nuclear Facilities must be made soon,” said the May 9 application from the Exelon (NYSE: EXC) companies. “Consequently, CENG cannot wait until after the Commission issues an order in the CES proceeding to submit its financial data and only then initiate an analysis regarding the appropriate value to compensate the Nuclear Facilities for their zero-emission attributes. In light of these long lead times and the volume and complexity of the Nuclear Generators’ financial data, CENG is submitting this information now in contemplation of a Commission order approving a ZEC program so that Department of Public Service Staff (“Staff”) has sufficient time to analyze the Nuclear Generators’ financial data, establish the appropriate compensation, and issue a determination concurrently with the Commission’s order approving the nuclear component of the CES program.

“Based on this financial data, and using the ZEC program structure proposed by CENG in its initial comments on Staff’s White Paper on Clean Energy Standard (the “White Paper”), CENG realizes a facility cost of $50.00 per megawatt hour (“MWh”). Compensation based on that facility cost is necessary for the Nuclear Facilities’ continued operation and realization of the State’s GHG reduction goals.”

The Exelon nuclear plants involved are:

  • The Ginna Facility is a 581-MW single-unit pressurized water reactor located along the south shores of Lake Ontario in Ontario, New York. In 2004, the Ginna Facility’s license to operate was extended until September 2029. The Ginna Facility would have to be refueled in the first half of 2017 to allow for continued operations upon expiration of its Reliability Support Services Agreement. In order for refueling to occur, fuel must be ordered by October 2016 so that the prefabrication process can begin to meet the scheduled refueling in 2017.
  • The Nine Mile Facility is an approximately 1,900 MW, two-unit, boiling water reactor facility located along the shore of Lake Ontario in Scriba, New York. It is licensed to operate through 2029 and 2046 for units 1 and 2, respectively. Nine Mile Point Unit 1 is scheduled for refueling in the first half of 2017. In order for refueling to occur, fuel must be ordered by October 2016 so that the prefabrication process can begin in sufficient time to accommodate the scheduled refueling in early 2017.

On Jan. 21, 2016, the commission expanded the scope of the existing Large-Scale Renewable (LSR) proceeding to include consideration and implementation of a CES. On Jan. 25, 2016, commission staff issued the White Paper.

Said the Exelon companies: “The White Paper recognizes that New York’s carbon reduction strategy relies on robust energy efficiency and significant expansion of renewables, but that forward progress in reducing carbon also requires steps to ensure that existing emissions-free sources of electricity remain operational. To that end, the White Paper proposes a nuclear tier as part of the CES program to ensure that emission-free power from eligible nuclear generating facilities continues to be produced in the near term and that the environmental attributes are properly valued (the “Nuclear Tier”).

“The White Paper proposes an alternative compliance payment (“ACP”) that would establish the maximum price that would be paid per ZEC and be calculated based upon the difference between the anticipated costs of eligible units and forecasted wholesale prices. The ACP will need to be determined prior to any procurement under the Nuclear Tier of the CES as it will provide an essential price signal to buyers of ZECs. Alternatively, if ZECs are procured centrally, the ACP will determine the price at which that procurement takes place.”

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.