Public Citizen claims in a filing with the Federal Energy Regulatory Commission (FERC) that the proposed Entergy (NYSE:ETR) sale of the FitzPatrick nuclear plant to Exelon (NYSE:EXC) should be rejected because the companies’ application is incomplete.
Public Citizen said in an Oct. 11 news release that the application pending before FERC fails to include any mention of New York Gov. Andrew Cuomo’s proposed Zero Emission Credit (ZEC) subsidy and its potential impact on Exelon’s market power. Exelon is trying to purchase FitzPatrick only for the financial value of the ZEC, Public Citizen maintains.
Cuomo’s proposal would allocate roughly $8bn over 12 years to three of the state’s nuclear power facilities. If the sale of FitzPatrick is approved, Exelon would gain control over all the ZEC-recipient facilities – and would get all $8bn in subsidies, Public Citizen said in its protest.
Public Citizen called on FERC to require Exelon and Entergy to redo their market power analysis and resubmit the results for further analysis.
In addition, Public Citizen questions whether the ZEC payments violate FERC’s rules. While New York has claimed that the ZEC has been structured to address climate change, details in the ZEC program reveal it to be a convoluted and improper effort at economic development by forcing all New York ratepayers to provide unprecedented subsidies to the nuclear power plants. Such economic development programs are inconsistent with FERC’s rules and regulations.
Furthermore, once the companies account for the ZEC payment, the acquisition of FitzPatrick likely will not be in the public interest, and FERC must reject it, Public Citizen maintains.
In its filing, Public Citizen also said such costly subsidies for the three aging nuclear facilities (FitzPatrick and Exelon’s Ginna and Nine Mile Point) diverts capital away from superior, competing investments such as wind, solar and energy efficiency.
“Giving billions of dollars to a single company operating three aging nuclear power plants that are no longer economically feasible is the wrong direction for New York,” said Tyson Slocum, director of Public Citizen’s Energy Program. “Instead, the state should invest in cost-effective, forward-looking and safe strategies like boosting renewables and energy efficiency.”
On July 22, Public Citizen filed comments with the New York Public Service Commission (PSC) opposing the proposed subsidy. On Aug. 1, the PSC approved the subsidy over the objections of Public Citizen and several other parties.
On Aug. 9, Exelon announced that it had reached an agreement with Entergy to acquire and run the 850-MW FitzPatrick nuclear plant in Scriba, New York. In November 2015, Entergy had announced that it would shut down FitzPatrick in late 2016 or early 2017.
The plant had evidently been losing money because the market failed to properly value carbon-free baseload power, Entergy had said.
On Aug. 19, Entergy and Exelon filed an application with FERC for permission to sell the FitzPatrick nuclear power facility to Exelon.
On Sept. 19, FERC issued an order extending the public comment period for this docket from Oct. 3 to Oct. 10. Under FERC’s rules, because Oct. 10, is a federal holiday, the comment “period does not end until the close of the Commission business of the next day,” which is Oct. 11, Public Citizen said in its protest.
Public Citizen, Inc. is a consumer advocacy organization that claims more than 400,000 members and supporters across the United States.
The case involves FERC Docket No. EC16-169.