Nuclear subsidies entice Exelon to consider buying FitzPatrick plant

Jul 14, 2016

Negotiations are underway between two nuclear power companies that could save the FitzPatrick Nuclear Power Plant in Oswego County. Entergy had all but guaranteed that it would shut the plant down because it was losing $60 million annually, but a state plan to subsidize New York's nuclear plants is enticing another company to buy and operate the facility.

Since Entergy announced last November that it was planning to close FitzPatrick permanently in 2017, public officials had suggested that Exelon, which is the largest operator of nuclear plants in the country -including the Nine Mile Point and Ginna facilities in central New York-, could afford to purchase the plant.

John O'Mara, a former Public Service Commission (PSC) chairman, said the governor's office brought the two companies together to discuss a potential deal.

"I have good sources who tell me that Exelon and Entergy, with oversight from the governor’s office, have been negotiating constantly," O'Mara said.

But it wasn't until the state started putting the final touches on the nuclear subsidies that negotiations began. The plan proposes $965 million for the state's four nuclear plants between 2017 and 2019, with more funding to come through 2029. It's part of the Cuomo administration's attempt to financially support sources of energy like wind, solar and nuclear that don't emit harmful carbon dioxide.

Entergy spokesperson Jerry Nappi said the company has always been open to an economically viable alternative to closing the plant and he said the subsidies have made that a reality for Exelon.

"Exelon has three units in upstate already, FitzPatrick would make four, that potentially allows them to gain some synergies and economies of scale by having another plant," Nappi said.

But an Exelon spokesperson said in order for the sale to take place, the state would have to approve the subsidies and the company would have to be assured of immediate earnings and a long-term revenue stream for FitzPatrick. Entergy hopes to have a deal in place to sell the plant by mid-August.

Some environmental groups have balked at the high cost of keeping the nuclear plants afloat, but state Sen. Patty Ritchie said the money will have a far-reaching impact.

"I think you have to look at the big picture," Ritchie said. "The governor has proposed an aggressive clean energy standard. the reality is we can’t get to that level without our nuclear plants."

The PSC is expected to vote on the nuclear subsidies this summer.