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Consumer Group: NY Nuke Subsidies Violate State’s Vision for Competition

July 26,2016



In addition to opposing nuclear subsidies -- in the form of a nuclear procurement standard -- on cost and other grounds, the Public Utility Law Project of New York, Inc. said that subsidies to be provided to New York nuclear plants as proposed by New York PSC Staff conflicts with the PSC's "prime motivation" for deregulation -- namely that customers would not bear the financial risk of money-losing plants

"[T]he subsidy proposed in this case directly contradicts one of the prime motivations for the deregulation of wholesale power generation that the Public Service Commission instituted beginning in its 1996 “Vision Order” – that deregulation would insulate the rate-paying public from the need to bail out energy generating entities from bad business decisions, or from vagaries of the market that might make such generation entities non-cost effective. At this point in time, the Upstate nuclear plants sought to be kept open by the proposed subsidy are and have clearly been under financial stress from the precipitous drop in natural gas prices, and the intermittent ability of wind and solar generation to prevent such plants from clearing in NYISO auctions. In other words, the market has severely diminished the ability of the subject nuclear plants to make a profit, in consequence of which a gigantic subsidy has been proposed. While there are some important economic development arguments that can be made for why such a subsidy should be awarded, economic development arguments are not the cornerstone upon which just and reasonable rates are constructed," PULP said



Tags:
New York   Subsidies   Long-Term Contracts   Nuclear  

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