New York’s clean energy plan may not be going as planned after utility officials said a key nuclear power plant it was supposed to save will close in four years.
The utility firm Entergy made the decision to close the Indian Point power plant Monday after striking an agreement with state officials over safety concerns. Although the state’s Democratic Gov. Andrew Cuomo has opposed the plant, he did announce last summer $1 billion in subsidies for nuclear plants to keep them humming as he switches the state to more renewables.
The news forced the nuclear lobby in Washington to renew its push to get policymakers to do more to preserve the country’s aging fleet of nuclear power plants.
“More must be done — with urgency — to preserve financially challenged nuclear plants in other states, but momentum is building,” said Maria Korsnick, president and CEO of the Nuclear Energy Institute.
Cuomo established a zero-emission credit system last year that was thought to be enough to keep Indian Point plant going, which has become increasingly uncompetitive with natural gas-fired power plants. Fracking has caused the price of natural gas to drop, making it much more attractive as a fuel to generate electricity. A majority of the U.S.’s power supply comes from natural gas, beating out coal as utilities’ fuel of choice.
“As unpleasant as it is to see the business decision that Entergy has been forced to make in an era of sustained, record-low natural gas prices, we are seeing increased recognition of nuclear energy’s value,” Korsnick said. “In New York itself, Gov. Cuomo last year led the successful effort to preserve upstate nuclear power plants through a zero-emissions standard that values their clean air attribute. Similarly, Illinois only weeks ago enacted legislation to preserve at-risk nuclear facilities in that state.”
But that may not be enough. At the same time the nuclear lobby is pushing Cuomo’s clean energy policy, a group representing merchant power companies that own a big share of natural gas plants urged the federal government to come down hard on the governor’s zero-emission scheme.
John Shelk, the president of the Electric Power Supply Association, called Cuomo’s subsidies “corrosive” to the energy market in New York.
Shelk’s group made two filings with the government’s grid watchdog, the Federal Energy Regulatory Commission, seeking quick action to stop state power system operators that the commission oversees from implementing the Zero Emissions Credit schemes, or ZECs, to “protect consumers and wholesale power markets from the undisputed negative effects” of the subsidies, the group said.
“The profound adverse economic effects of ZECs and similar out of market payments on the viability and integrity of wholesale markets that millions of consumers depend on is not in dispute,” said Shelk in a statement. “FERC itself has also spoken of the challenges posed by growing utilization of out of market payments, which in the case of ZECs to be implemented later this year, will pay a few power plants almost double the market price for electricity compared to their competitors,” Shelk said.
