Thank You, Mr Cuomo For Bailing Out Nukes -- August 1, 2016

Updates

August 11, 2016: this seems to sum up the entire story at Forbes --

The James A. Fitzpatrick nuclear power plant in Oswego County, upstate New York, was set to close prematurely, 20 years ahead of schedule, because of a warped market structure that does not value clean reliable nuclear energy like it does short term-term low natural gas prices and subsidized renewables.

Fortunately, the Clean Energy Standard adopted last week by the New York Public Service Commission offered a way out by carbon-free nuclear power, which allowed Exelon Generation to assume ownership and operations of the plant.  

I have "trouble" with the "short term-term low natural gas prices" -- I'm not sure what's meant by that, but I certainly understand "subsidized renewables."

Original Post

From IER:

During the current heat wave on the Eastern Coast, New York power prices rose by over a factor of 20 to more than $1,000 per megawatt hour as hydropower imports from Quebec dropped by 80 percent. This was despite having all of the state’s back-up oil capacity on line.

New York, which sits atop of the Marcellus shale formation, could be producing its own natural gas, but it has banned hydraulic fracking, and despite its nearness to Pennsylvania, which is the second largest natural gas producer in the country, New York is limiting its construction of natural gas pipelines, which could bring Marcellus shale gas from Pennsylvania. As a result, electricity prices skyrocket in the state when shortages occur.

Meanwhile the state of New York is getting ready to bail out its nuclear plants under the guise of a renewable energy mandate.

Maintaining zero-emission nuclear power is a critical element to achieving New York’s ambitious climate goals. Starting in April 2017, the Clean Energy Standard requires all six New York investor-owned utilities and other energy suppliers to pay for the intrinsic value of carbon-free emissions from nuclear power plants by purchasing Zero-Emission Credits. The New York Power Authority and the Long Island Power Authority are also expected to adopt the same requirements. This will allow financially-struggling upstate nuclear power plants to remain in operation during New York’s transition to 50 percent renewables by 2030. A growing number of climate scientists have warned that if these nuclear plants were to abruptly 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. 

The New York Times has a nice article on the cost to the average consumer.

Utility customers in New York State will pay nearly $500 million a year in subsidies aimed at keeping some upstate nuclear power plants operating.

The subsidies were included in an order from the Public Service Commission to establish new rules on how power consumed in the state is generated. The policy, championed by Gov. Andrew M. Cuomo, calls for half of the state’s electricity to come from renewable sources, such as solar or wind, by 2030.

But some environmental groups, including the Alliance for a Green Economy in Syracuse, had opposed the subsidies, calling them possibly “the largest corporate bailout or subsidy” in state history.

Jessica Azulay, program director for the group, said it supported the governor’s push to mandate the purchase of renewable energy by utilities but thought subsidies that could amount to several billion dollars over 12 years were a big mistake.

“They’re dangerous, they’re aging, they’re unprofitable and they should close,” Ms. Azulay said of the nuclear plants.

As long as people don't mind paying more for electricity, and as long as folks don't mind that companies will re-locate to other states where electricity is less expensive, it seems to be a non-issue.