The New York State Public Service Commission on Nov. 17 announced its approval of the sale of the James A. FitzPatrick nuclear plant by Entergy Corp. (NYSE: ETR) to Exelon Corp. (NYSE: EXC).
The transfer will facilitate the continued operation of the “carbon-neutral” plant as a bridge to a renewable energy future without the need for imported fossil fuels such as fracked gas and oil from out of state or for the restarting of coal plants to supply energy demand from across the state, said the commission.
It added: “Today’s action also better enables the State to reach its 40 percent by 2030 carbon reduction goals and supports the Clean Energy Standard, the most comprehensive and ambitious plan in the state’s history to fight climate change, reduce harmful air pollution, and ensure a diverse and reliable energy supply at affordable prices for all New Yorkers.”
“Our finding today is that the public will be well-served by the transfer of ownership of FitzPatrick,” said Commission Chair Audrey Zibelman. “Exelon has an excellent track record as the owner of nuclear power plants, and we fully expect it will operate FitzPatrick in a safe and reliable fashion.”
The Clean Energy Standard obtains zero-emissions credits from upstate nuclear plants to ensure that critical progress on greenhouse gas emissions reductions is sustained as the state works toward achieving its goal to generate 50% of New York’s electricity from renewable energy sources like wind and solar by 2030. Were Fitzpatrick to close, carbon emissions in New York will increase by more than 31 million metric tons during the next two years, resulting in public health and other societal costs of at least $1.4 billion, according to studies conducted by the Brattle Group.
Under the terms of the agreement, Entergy will transfer FitzPatrick’s operating license to Exelon for $110 million. If the other regulatory approvals are obtained and the transaction closes, Entergy would then transfer the plant to Exelon. The 838-MW facility, currently owned by Entergy, provides enough carbon-free electricity to power more than 800,000 average-sized homes.
The power plant employs approximately 600 highly-skilled, well-paid workers, and contributes about $500 million per year in regional economic activity. FitzPatrick also accounts for $17.3 million in local property taxes supporting critical services to local governments and schools.
Final transaction closure is dependent upon regulatory review and approval by federal agencies, including the U.S. Department of Justice, the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission. The transaction is expected to close in the second quarter of 2017.
Exelon operates two other nuclear energy facilities in upstate New York – R.E. Ginna and Nine Mile Point – the latter of which is near FitzPatrick. Together, Exelon’s two upstate plants provide carbon-free electricity to more than 2.5 million homes and businesses while employing more than 1,500 full-time staff.
As a result of New York Gov. Andrew Cuomo’s Clean Energy Standard, Exelon will reinvest millions back into the nuclear units, including upwards of $500 million in operations, integration and refueling expenditures for the upstate plants in spring of 2017, all of which will have a positive impact across the state. Exelon has committed to refueling FitzPatrick in January 2017.
The Clean Energy Standard builds on the progress made under New York’s Renewable Portfolio Standard (RPS) and is a central component of Reforming the Energy Vision, Cuomo’s strategy to fight climate change. Under the RPS, 65 large-scale renewable energy projects have been developed around the state, adding approximately 2,000 MW of renewable capacity to the New York energy market, with additional projects expected soon under the final phase of the RPS program.