Update on FitzPatrick Plant’s Pending Closure

by Jim Hopf

In last month’s ANS Nuclear Cafe articles (1, 2), I discussed the pending closure of the (Entergy operated) FitzPatrick nuclear power plant, and steps needed to prevent its closure. Here, I discuss some recent developments

NY Clean Energy Standard

New York governor Andrew Cuomo recently announced a proposed Clean Energy Standard that would require 50 percent of the state’s power generation come from “renewable” sources by 2030.  Early news reports stated that nuclear would count towards the 50 percent requirement, just as renewable sources are, but later official statements clarified that nuclear would not count towards the 50 percent goal.

Although the news reports I’ve read have not stated how hydro generation is treated, it seems clear that it will be included as part of the 50 percent mandate.  Currently, New York gets about 30 percent of its power from nuclear, approximately 20 percent from hydro, and less than 5 percent from renewables like wind and solar.  Thus, almost 55 percent of the state’s power already come from non-fossil sources (which would render the Clean Energy Standard moot in nuclear were included).

The governor also stated that the state must value all of its carbon-free resources and that “elimination of upstate nuclear facilities, operating under valid federal licenses, would eviscerate the emission reductions achieved through the State’s renewable energy programs, diminish fuel diversity, increase price volatility, and financially harms host communities.”  He also directed state agencies to develop a process to prevent the premature retirement of those plants.  It is unclear at this time what measures may be taken or proposed.

Exelon Deal

Exelon, which operates the 2-unit Nine Mile Point nuclear plant that is adjacent to FitzPatrick, offered to procure the fuel to keep the plant running an additional two years (through the end of 2018), at a cost of $125 million.  That two years of continued operation would allow time for the state to develop and clarify what support it is willing to offer the plant.  It is also possible that after two years, market conditions for the plant may improve.

Exelon’s offer could be part of a plan for Exelon to buy or take over operation of the plant.  Since FitzPatrick is adjacent to the two Nile Mile Point reactors, there is reason to believe that having Exelon operate all three plants may offer increased operating efficiencies and a lower overall cost of operation for FitzPatrick.  Nuclear industry experience shows that multi-unit plant sites have significantly lower operating costs than single-unit sites.

Entergy Reaction

Entergy’s position, at this point, is that it remains committed to shutting down the plant.  Although Entergy has been in negotiations with Cuomo, it’s saying that nothing has been offered that would be sufficient to change its decision.  With respect to the state’s Clean Energy Standard, and any related support to keep plants like FitzPatrick open, Entergy’s view appears to be that it will take too long for any such aid to finally arrive, and that the uncertainties over how much aid may eventually come are too great to justify continuing to operate the plant (at a loss).

Entergy stated that Exelon’s offer to procure two years of fuel is also not enough to eliminate the losses and make it worthwhile to keep the plant open.  They stated that there are other costs and long-term contractual commitments associated with keeping the plant running, other than buying the fuel, such as costs and contracts related to performing the fueling/maintenance outage.  They also stated that it would be impractical to simultaneously plan for decommissioning and for a fueling outage.

As I discussed earlier, there was speculation that Exelon may consider buying or taking over operation of the plant.  Entergy stated that Exelon has made it clear that they are not interested in buying the plant.  That is interesting (and disappointing) news, given the potential operational efficiencies of operating all three plants on the site.  It also begs the question as to why Nine Mile point is profitable, but FitzPatrick wouldn’t be, even under the same corporate management, and even with the additional operational efficiencies.  It’s also unclear why Exelon would make the offer to provide two year’s worth of fuel, if it was not part of a plan to take the plant over.  What would they get out of it?

Finally, many have speculated that Entergy is trying to drive a bargain with the state, where the state ceases its efforts to close Entergy’s (profitable) Indian Point plant, in exchange for keeping FitzPatrick open.  If that is the case, Entergy’s recent statements suggest that the state has been unwilling, so far, to make such an offer.

What’s Needed

It’s somewhat encouraging to hear high-level Democratic politicians from a liberal state express support for nuclear power (keeping existing plants open, at least) and acknowledge its many benefits, including its non-emitting nature.  However, it appears that any tangible support has yet to appear.

Cuomo and other state politicians have clarified that nuclear would not actually count towards the proposed Clean Energy Standard goal.  Instead, they made vague statements about providing support for keeping existing upstate nuclear plants open.  In last month’s posts, I estimated that less than 1 cent/kW-hr of (likely temporary) support is all that would be needed.  This is a far smaller amount of support than that given to all renewables projects in the state.  And yet, Entergy’s statements suggest that even this small level of support has not been offered (yet).

All this suggests that there remains a heavy political bias towards renewable energy in the state, and that there is relatively little support for other emissions reduction options, perhaps nuclear in particular.  If these plants are to stay open, politicians will have to take the impacts of the loss of emissions-free nuclear generation far more seriously than they have so far.  While fair, giving nuclear the same level of support as renewables would not even be necessary.  But the plants will need a higher level of support than has been offered so far.

Finally, if it is true that FitzPatrick will (or must) close, NRC regulations should be revised so that a plant closure decision need not be permanent (as I’ve discussed in a previous post).  It should be possible to mothball a plant, and reduce staffing and other expenditures dramatically.  It should then be possible reopen a plant without the expenditure of a large amount of money.


 

Jim Hopf Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a regular contributor to the ANS Nuclear Cafe.

 

 

 

3 thoughts on “Update on FitzPatrick Plant’s Pending Closure

  1. James Greenidge

    It behooves the entire nuclear community to on-line and in media stand behind and aggressively support Indian Point which would be seen as not only a major defeat for nuclear plant electricity by greens and especially media, but a snowballing confirmation of its much blustered danger and hazard to hammer other plants with. Can’t say more. It doesn’t get more simple than that.

    James Greenidge
    Queens NY

  2. Atomikrabbit

    Its possible that at Fitz the cost of NRC-mandated FLEX implementation may have been a big part of the economic disadvantage cited – they had until the end of the Fall 2016 refueling outage to complete them, and by end of August 2015 hadn’t started on much of it: http://pbadupws.nrc.gov/docs/ML1524/ML15240A370.pdf

    That begs the question then, as Jim stated – why are the two BWRs next door at Nine Mile not similarly disadvantaged? Is it just the economy of scale for a two-unit site? If so, then the solution is obvious – Fitz and Exelon need to hook up.

    The “holding Fitz as leverage for Indian Point concessions” theory should not be discounted. Entergy has spent tens of millions on lawyers fighting the longest license extension battle in history, and I’m sure would like to see the end of that saga – a water permit, and NY state withdrawing as a powerful intervenor would solve it.

  3. John Tanner

    It is often said that grid operators frequently favor “renewable” energy. I don’t understand how this occurs. I have always read that the grid operator accepts bids, starting with the lowest, until the demand is covered, then pays all bidders at the rate of the highest bid accepted. How does this favor any one bidder?
    To be sure, many of the renewable energy producers can offer low bids because of the subsidies they receive, but that is a separate issue.

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