A financially-troubled nuclear plant in Upstate New York could change hands from one major domestic nuclear operator to another.
Entergy (NYSE:ETR) reported July 13 that it is “in discussions” with Exelon (NYSE: EXC) for the potential sale of the James FitzPatrick Nuclear power plant in Scriba, New York.
Negotiations with Exelon are ongoing, with a target for completion in mid-August, therefore Entergy said it cannot yet describe the material terms of any definitive agreement that it may enter into with Exelon.
If discussions between Entergy and Exelon do not result in an agreement for the sale and transfer of ownership of FitzPatrick, Entergy will move ahead with its current plan to cease operations, followed by decommissioning.
In November 2015, Entergy had announced that it would shut down FitzPatrick in late 2016 or early 2017.
“In keeping with our corporate strategy to move away from merchant power markets and toward a company operating exclusively as a utility in regulated markets, we are working with Exelon to come to commercial terms on a sale transaction that depends largely on the final terms and timeliness of the New York State Clean Energy Standard,” said Entergy Wholesale Commodities President Bill Mohl.
“We thank New York Gov. Andrew Cuomo for his leadership in promoting the Clean Energy Standard, which provides incentives for financially strapped nuclear power plants,” Mohl said in a July 13 news release.
New York policy important to trio of nuclear plants
“With Governor Cuomo’s leadership, we have an opportunity to rescue and continue to operate a critical power plant that supports thousands of skilled men and women,” said Exelon President and CEO Chris Crane.
“The proposed CES program, if approved, will give us the confidence to invest hundreds of millions of dollars in Fitzpatrick in January to refuel the plant and upgrade systems needed to reverse the shutdown decision,” Crane said in a statement.
“We know how important saving Fitzpatrick is to New York families and businesses,” Crane said. “And we look forward to working with Entergy, the state, the local communities and business leaders, and our partners in labor to save the plant.”
Exelon already operates the Nine Mile Point and Ginna nuclear plants in Upstate New York. Exelon praised New York Gov. Andrew Cuomo (D) and New York’s Clean Energy Standard.
At the governor’s behest, the state is pursuing a planned 50% zero-carbon energy standard by 2030.
Exelon said that a recently-released New York Department of Public Service staff paper on the clean energy policy could go a long way toward keeping Ginna and Nine Mile Point operating.
“Without Gov. Cuomo’s leadership and the development of the Clean Energy Standard, our units at Nine Mile Point and Ginna in Upstate New York are in jeopardy of closure,” said Joseph Dominguez, executive vice president for Governmental and Regulatory Affairs and Public Policy, Exelon. “These units employ 1,400 full-time workers with an annual payroll of $266 million, pay over $47 million annually in local taxes and support thousands of indirect jobs across New York through part-time employment and the purchase of goods and services. We make the zero-carbon electricity that is always available to meet our customers’ needs on the hottest or coldest days of the year.”
“If the program is approved, we will immediately reinvest approximately $200 million in the plants in the spring and continue to operate. If the program is not approved, we need to go in a different direction,” Dominguez said.