Constellation Seeking Ratepayer-Backed Contract w/ Utility to Maintain Operation of N.Y. Nuke Plant
July 14,2014
Constellation Energy Nuclear Group (CENG), LLC filed a petition with the New York PSC asking that the PSC direct Rochester Gas & Electric to enter negotiations with CENG's Ginna nuclear plant for a reliability support services agreement, stating that a NYISO study found that the plant is needed for reliability, but that market revenues will not support continued operation of the plant.
"On a forward-looking basis, CENG management has analyzed the revenues the Ginna Facility would expect to receive for energy and capacity sales in the New York Independent System Operator ('NYISO') markets following the [existing] PPA's expiration. CENG management determined that the expected revenues from the Ginna Facility's sale of capacity and energy into the NYISO markets will not be sufficient to cover its costs of continued operation, including required new capital investment," CENG claimed.
"In recent years, the Ginna Facility's revenues from the sale of capacity and energy have not been sufficient to cover the costs of operation. In the two preceding calendar years (i.e., 2012 and 2013), CENG has sustained cumulative losses at the Ginna Facility of nearly $100 million (including the allocation of CENG corporate overhead). Over the last three calendar years (i.e., 2011-2013), losses have significantly exceeded $100 million (including the allocation of CENG corporate overhead). Further, in addition to incurring these losses, CENG has not been compensated for any operational risk or an appropriate return on its investment over this period," CENG claimed (emphasis added)
CENG said that a NYISO-produced study, "confirm[s] the need for the Ginna Facility's continued operation at least through October 1, 2018, to avoid adverse impacts to electric system reliability."
"RG&E also conducted a local reliability analysis, the results of which are included in the NYISO study, which confirms the need for the Ginna Facility's continued operation to support local electric reliability in RG&E's service area," CENG said.
CENG did not describe how costs of the reliability support services agreement would be allocated to customers, or how the output from the Ginna plant would be treated vis-a-vis default service.