New York State Has a Plan to Rescue Nuclear Power
Ratepayers will subsidize unprofitable nuclear plants in order to reach the state’s clean-energy goals.
With the support of Governor Andrew Cuomo, New York’s Public Service Commission enacted a landmark Clean Energy Standard that calls for propping up the state’s ailing nuclear plants with a multibillion-dollar subsidy. It’s the most significant step yet by a state government to rescue nuclear power providers, which have been buffeted by low-priced electricity from natural-gas plants.
Under the new plan, ratepayers will subsidize the operation of three of the state’s four nuclear power stations through 2029, providing funding that will average about half a billion dollars a year and could total $7.6 billion. The plan also aims to slash carbon dioxide emissions by 40 percent and produce half the state’s electricity from renewable sources by 2030.
The plants’ operators had publicly stated that they planned to shut down if regulators didn’t come up with public funding. Entergy, which owns the James A. FitzPatrick plant, situated on the shore of Lake Ontario, said it would shut the plant down by early 2017. Exelon, owner of the R.E. Ginna and Nine Mile Point plants, has said it would close those plants in the next few years without state support. (The Indian Point Energy Center, located near New York City, is not included in the new subsidies because, the commission stated, power prices are higher in its region and the plant is not in danger of closing.)
Experts at a Department of Energy conference on the future of nuclear power in May concluded that as many as 20 nuclear plants in the United States could shut down over the next decade, and their closure could dramatically increase emissions of greenhouse gases.
Arguments over the future of nuclear power in this country have escalated in recent years as five plants have retired before reaching the end of their planned lifetimes and operators have announced plans to shutter at least seven more.
Nuclear power provides nearly 20 percent of U.S. electricity and 63 percent of its zero-carbon power. Opponents of nuclear power maintain that both fossil fuel and nuclear energy sources can be fully replaced by renewables, primarily wind and solar.
Nuclear advocates, meanwhile, point out that retired nuclear plants tend to be replaced by natural gas. Carbon emissions in California, for instance, rose by nearly 11 million tons a year after the closure of the San Onofre plant in June 2013, according to the Breakthrough Institute, a San Francisco-based research organization that supports nuclear power to limit climate change. Pacific Gas & Electric, the state’s largest utility, plans to shut down the Diablo Canyon plant, California’s last remaining nuclear power station, when its current operating licenses expire in 2024 and 2025 unless the state steps in with new funding.
The Clean Energy Standard offers “a bridge to pay the nuclear units for their zero-carbon production,” said PSC chair Audrey Zibelman before the Monday vote, “so that we can secure our renewable mandate and carbon reduction goals in a cost effective and realistic manner.”
It could also offer a model for other states. New York is essentially offering credits to producers of zero-carbon power, whether they run nuclear plants, wind farms, or solar arrays. In a report earlier this year, the Breakthrough Institute and Environmental Progress proposed modifying the state Renewable Portfolio Standards, which focus on wind and solar, to make them “Low-Carbon Portfolio Standards” that would include support for nuclear power as well.
Such a program, the report concluded, would ensure that “premature retirements of existing nuclear plants do not erode some or all of the carbon and clean energy benefits of continuing deployment of wind and solar power in the short-term, while significantly raising the … deployment of low-carbon electricity generation over the long-term.” At around $2 per ratepayer per month—the estimated price of the New York nuclear subsidy—that would be a bargain.
(Read more: New York Times, “Nuclear Shutdowns Could Ramp Up U.S. Carbon Emissions”)