Can New York Force FitzPatrick To Stay Open?

Mar 8, 2016

(WRVO) If the owner of the James A. FitzPatrick Nuclear Power Plant refuses to keep the facility open, can the state force it to? That's the question after FitzPatrick owner Entergy has rejected several offers to help keep the financially stressed plant from closing in January. The company says it's too late, but some think the state may not need Entergy's approval.

Credit David Sommerstein / NCPR

When the closure was announced last November, Gov. Andrew Cuomo said New York would "pursue every legal and regulatory avenue" to try to stop it. Sen. Charles Schumer (D-NY) echoed those sentiments, and said at the time he thinks there is a government entity that can stop the closure: the Public Service Commission (PSC). The PSC regulates the state's utilities and ensures there's enough energy for New York consumers.

“The PSC for instance, has to approve of such a closing, and reliability is a key aspect of what the PSC will look at," Schumer said. "So, there are ways that we can try to avoid this closing, and I’ll do everything I can to see that happens.”

What would happen to grid reliability -- or the local and statewide power grid if Fitzpatrick went dark? It's a question the New York Independent System Operator (NYISO) studied after Entergy announced the closure. The results were mixed. It found that if FitzPatrick and several other plants in the area close soon, there would be a statewide power shortfall of 325 megawatts but not until 2019. Schumer said that's the ammunition the PSC needs to fight Entergy.   

"As I understand it, there are still reliability issues and the PSC could require them to do certain things if they find those reliability issues to be true and I would urge the PSC to do a thorough investigation of reliability and use all of its clout to keep it open," Schumer said.

If there's a power shortfall, like what was found in this study, then the PSC can force FitzPatrick to stay open, right? Perhaps. NYISO first has to invite bids from plants to fill that power need. It prefers to go with option A: a private market solution. But, NYISO can go with option B: where it pays a plant, such as FitzPatrick, with surcharges on customer energy bills. That money could keep FitzPatrick afloat. But, the nuclear plant doesn't have to bid and Entergy's vice president for external affairs, Mike Twomey, said they likely won't.

"We would essentially have to bid in that we are available to serve 325 megawatts and you might get paid for that and you might not, depending on whether there's a need three years from now," Twomey said.

Also, it's important to note that NYISO will look for the lowest bid. Nuclear power is not exactly cheap, reducing FitzPatrick's shot at the winning the contract. Twomey said the plant is at a disadvantage for another reason.

"We only run pretty much at full power," Twomey said. "So, we would only be compensated for 300 megawatts and we would be exposed to the market for the other 500 megawatts."

The same market where the plant is losing $60 million a year. So if FitzPatrick doesn't want to enter a bid and take the subsidies that come with it, can the state make it? NYISO officials say they can't. Can the PSC? They won't comment. Central New York Assemblyman Will Barclay said he hopes the PSC has that power, but likely not.    

"I don’t think you can just unilaterally say, 'Entergy you have to stay open,'" Barclay said. "I think you have to offer something to keep the plant open."

Offer something like the subsidies that have kept Rochester's Ginna Nuclear Power Plant open? Not so fast. The NYISO study in that situation found a much stronger local need to keep the plant open. And an even more important difference, Ginna's owner Exelon was willing to enter into that agreement.

The question that must be answered soon because FitzPatrick was supposed to begin planning for its biennial refueling last fall. And with nuclear plants, once you start shutting down there's no turning back.