nuclear-news

A risky precedent – if ratepayers bail out Ginna nuclear plant

Bailout of nuclear power plant would set bad precedent, Times Union By David O. Carpenter, March 30, 2015 The New York state Public Service Commissionand the Cuomo administration will soon decide whether ratepayers can be forced to bail out Exelon, the nation’s largest nuclear power plant operator, and its Ginna nuclear plant, one of the world’s oldest commercial reactors, built near Rochester in 1969. A bailout would set a costly, dangerous precedent with state and national implications.

Across New York and the U.S., as older nuclear plants age, their operating costs are rising while prices for electricity from competing sources are falling, making many of them uneconomical, including a third of Exelon’s fleet. So they seek shelter from market forces that increasingly favor cleaner, cheaper alternatives, including wind and solar.

Ginna is an important test case. It lost $100 million in the last three years. So Exelon negotiated a new purchase agreement withRochester Gas & Electric worth $735 million — $165 million above the market price for electricity — passing on its losses to customers by raising their rates.

Exelon threatens that without a bailout, it will close Ginna and other uneconomical reactors, undermining electricity supply. Supply fears are overblown — Ginna could be phased out and its power replaced more cost-effectively, including by improving substations and transmission lines. The PSC may be more worried about losing Ginna’s 600 jobs (though there would be hundreds of decommissioning jobs if the reactor shut down).

Meanwhile, many oppose the bailout. Physicians for Social Responsibility’s New York chapter opposes it because of growing public health and safety risks as Ginna ages. New York utilities and power producers oppose it because it violates established procedure for shuttering plants. A group of 60 large industrial, commercial and institutional energy consumers oppose it because it would distort electricity markets and trigger “potentially staggering” rate hikes. Alliance for a Green Economy opposes unjustly forcing consumers to subsidize Exelon and its obsolete reactor, which would also pre-empt better energy alternatives. It wants Ginna’s losses borne by RG&E, not ratepayers, and swift, orderly decommissioning.

New York City Mayor Bill de Blasio‘s administration opposes a Ginna bailout as bad precedent for other troubled plants, which might try to hold his city’s residents hostage to closure threats. For example, what if the aging, leaking Indian Point nuclear plant, which should be decommissioned, followed suit and demanded to be propped up through extortionate rate hikes?

These are all good reasons to say “no” to bailing out Ginna and other aging nuclear plants that might seek to follow in its wake…….. http://www.timesunion.com/tuplus-opinion/article/Bailout-of-nuclear-power-plant-would-set-bad-6168217.php

April 3, 2015 - Posted by Christina Macpherson | business and costs, politics, USA