One of the nation’s economically endangered nuclear plants has dodged premature retirement as Exelon (NYSE:EXC) announced Aug. 9 that it had reached agreement with Entergy (NYSE:ETR) to assume ownership and management of Entergy’s A. FitzPatrick nuclear plant in Scriba, New York.
In a news release, the companies credited New York Gov. Andrew Cuomo (D), who asked the New York Public Service Commission (PSC) to adopt a Clean Energy Standard (CES) benefitting the state’s nuclear power plants, for helping to facilitate the transaction.
Under the agreement totaling $110m, Entergy would transfer FitzPatrick’s operating license to Exelon. The New York Power Authority has agreed to transfer the decommissioning trust fund and liability for FitzPatrick to Entergy, and if regulatory approvals are obtained and the transaction closes, Entergy would then transfer the fund and associated liability to Exelon.
Transaction closure is dependent upon regulatory review and approval by state and federal agencies, including the US Department of Justice, the Nuclear Regulatory Commission (NRC), the Federal Energy Regulatory Commission (FERC) and the New York State Public Service Commission. The transaction is expected to close in the second quarter of 2017.
Exelon has committed to refueling FitzPatrick in January 2017 – apparently before the deal actually closes — and does not anticipate any immediate change to staffing levels at the plant, which normally employs about 600 people.
Exelon laid out additional details on the refueling plans in a filing with the Securities and Exchange Commission (SEC) as reported by GenerationHub.
The two companies had said in July that they were in talks about Exelon acquiring ownership of the 838-MW boiling water reactor (BWR) in Upstate New York. In November 2015, Entergy had announced that it would shut down FitzPatrick in late 2016 or early 2017. On Aug. 2, Entergy officials reiterated that the plant would probably be retired if it was not sold.
The CES, approved last week, will save thousands of high-paying jobs and spur hundreds of millions of dollars in short-term investments in energy infrastructure in upstate New York, the companies said Aug. 2. Without the CES, upstate nuclear plants would have been at risk of closure.
“We are pleased to have reached an agreement for the continued operation of FitzPatrick,” Exelon President and CEO Chris Crane said. “We look forward to bringing FitzPatrick’s highly-skilled team of professionals into the Exelon Generation nuclear program, and to continue delivering to New York the environmental, economic and grid reliability benefits of this important energy asset.”
“I would like specifically to thank our employees who have continued to operate this plant safely and reliably, despite the uncertainty they have faced about a potential shutdown,” said Entergy Chairman and CEO Leo Denault. “The pending sale of FitzPatrick is in the best interests of all of our stakeholders: employees, owners, customers and communities, including New Yorkers who will benefit from the plant’s continued clean, safe and reliable energy production,” Denault said.
“We would like to thank New York Governor Andrew Cuomo and his administration for being progressive in placing a value on the carbon-free attribute that nuclear power plants provide,” Denault said.
Exelon operates two other nuclear energy facilities in upstate New York: R.E. Ginna and Nine Mile Point, the latter of which is adjacent to FitzPatrick.
Crane added: “We thank Governor Cuomo and his administration for their part in facilitating an agreement to save FitzPatrick. His leadership on the CES and preserving zero-emissions assets has truly positioned New York as the nation’s leader in clean energy.”