Nuke bailouts panned

Andrew Cuomo

ALBANY – A coalition of environmental and consumer activists warned Wednesday that New York electricity customers will be jolted by a “huge tax” stemming from Gov. Andrew Cuomo’s plan to subsidize aging nuclear power plants.

Customers of National Grid, NYSEG and other state-regulated utilities will see bills climb by more than $2 per month beginning next year — and even more in subsequent years -- if the plan stays on track, the critics said.

The proposal is part of Cuomo’s plan to ensure New York gets at least 50 percent of its power from renewable sources, including solar and wind, by 2030. He contends the plan makes New York a national leader in the push to curb climate change linked to greenhouse gases.

But representatives of more than 70 groups - consumer, environmental and conservative - announced they are working in unison to derail the “bailout” of reactors near Rochester and Syracuse.

The subsidy’s cost is expected to top $7 billion, according to a projection by the Public Utility Law Project, which is fighting the plan. Household customers will shoulder about $2.3 billion of that, it said, with the rest passed to industry, institutions and school systems.

“This is one of the biggest transfers of wealth in New York State history,” said Blair Horner, legislative director of the New York Public Interest Research Group.

Electric rates will escalate at a time when about 985,000 New Yorkers already owe utility companies $726 million, and even more customers will have to fight shut-off notices from their power companies, said Gerald Norlander, a lawyer for the Public Utility Law Project.

Their campaign, dubbed “Stop the Cuomo Tax,” drew a strong rebuke from the governor’s office.

Cuomo’s top energy advisor, Richard Kauffman, dashed off a letter to the critics, calling their projections of higher utility bills “deeply flawed.” Taking the plants offline, he said, would worsen greenhouse gas emissions.

“Without our upstate nuclear fleet, 31 million tons of (carbon dioxide) would be released in just two years, the equivalent of adding 6 million cars to the road — resulting in an additional $1.4 billion in public health and other societal costs,” Kauffman wrote. “New York would have to rely on more expensive and dirtier power, like imported fracked gas from Pennsylvania and other fossil fuel facilities.”

Cuomo’s administration has also voiced concern about job losses if the reactors close. An estimated 2,000 people work at the plants, whose operators had threatened to shut them last year because they operate at a financial loss.

Under the subsidy, New York utility companies will buy power at inflated rates over two years from the operators of two reactors at Nine Mile Point on the shore of Lake Ontario; the James FitzPatrick Nuclear Power Plant in Oswego County; and the R.E. Ginna Nuclear Plant in Wayne County.

State regulators said the benefits of subsidizing energy derived from carbonless sources, including nuclear reactors, exceed the costs of gases spewed by natural gas and coal-fired plants.

The state’s subsidy would help Exelon, which operates the facility in Wayne County as well as the Nine Mile Point plan in Oswego County. The company is seeking to buy the James FitzPatrick nuclear station, also in Oswego County, from Entergy.

The Public Service Commission is slated to review the deal on Nov. 17. Critics of the subsidy say they hope to spark enough opposition to scuttle the sale.

The subsidy targets some of the oldest commercial nuclear plants in the country. The Ginna and Nine Mile stations are 47 years old. Fitzpatrick opened 42 years ago.

“It’s like subsidizing the horse-and-buggy industry while Henry Ford is rolling cars off the assembly line,” said Horner, of the Public Interest Research Group.

The arrangement is also opposed by a conservative think tank, the Empire Center for Public Policy, which notes that New York’s electricity rates are already among the highest in the country.

Exelon has signaled it will invest $200 million in its New York reactors if the subsidy is approved. If the deal fails to take shape, the plant’s fate is uncertain.

Entergy and Exelon are asking regulators for “prompt approval” of the FitzPatrick sale, noting that a decision needs to be made soon on refueling the plant. Entergy said last year that it planned to close the reactor in early 2017.

The state now derives about one-third of its power from nuclear plants, including the Indian Point reactor just north of New York City. Indian Point, whose closure is sought by Cuomo, would not get the subsidy.

The operator of the state’s electric grid, the Independent Service Operator, has endorsed the subsidy in a regulatory filing, saying the reactors epresent “a critical bridge to New York’s clean energy goals.” The nuclear industry has also voiced its support.

Plans to have 7 million electric ratepayers in New York pick up the cost of the subsidy could also be challenged by operators of small, municipally owned utilities that do not use nuclear power.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com.

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