SCRIBA, N.Y. (AP) — A week after New York regulators adopted a subsidy policy for nuclear power plants, Exelon Generation said Tuesday that it will assume ownership of the FitzPatrick plant in upstate New York, saving it from closing.
The Entergy Corp. plant by Lake Ontario employs more than 600 people and produces enough electricity to power more than 800,000 homes.
Chicago-based Exelon, which runs the nearby Nine Mile Point reactors, will benefit from ratepayer subsidies that compensate nuclear reactors for clean emissions. The total subsidies would come to an estimated $965 million the first two years and could reach $7.6 billion over 12 years.
"This monumental regulatory approach to providing an economic basis to the nuclear plants in these communities is huge," Exelon President Chris Crane said at a press conference at the power plant. "It allows us as Exelon to turn around and start today to invest four to five hundred million dollars to these plants to keep them safe and secure and the jobs that they'll provide. It also allows us to have the platform to start the dialogue across the country."
New York's four nuclear plants are facing difficult times amid low power prices. Exelon had considered retiring the Ginna plant along Lake Ontario near Rochester before the approval of a surcharge. Some analysts say lessnuclear power would require New York to rely more heavily on electricity generated from greenhouse gas-emitting fossil fuels and could result in price increases.
Entergy in November announced plans to close its 41-year-old plant, citing high operational costs, low natural gasprices and a "flawed" energy market. The $110 million deal with Excelon, subject to regulatory approval, is expected to close in the second quarter of next year.
Gov. Andrew Cuomo said he believes in a "realistic" clean energy policy and the union movement, and said that the loss of 615 jobs with average pay of $120,000 would be devastating to the region.
"I think it's time the state steps in and helps the workforce in upstate New York," he said.
The state aims to generate half its power from renewable sources by the year 2030, double the current amount, in an ambitious plan that will rely on big subsidies to nuclear power plants to help reduce the state's reliance on fossil fuels.
Cuomo set that goal last year. At the same time he has called for the closure of the state's fourth nuclear plant, the Entergy-owned Indian Point facility on the Hudson River just north of New York City, saying it is located too close to the nation's largest population center.