Entergy Corporation, owner of five operating nuclear reactors in New York, Michigan and Massachusetts, said this week that it was in discussions with Exelon Corporation for the potential sale of the James A. FitzPatrick Nuclear Power Plant in Scriba, N.Y., a plant the company has threatened to close due to unfavorable market conditions.
The potential sale, the company said, is under discussion with an eye towards keeping FitzPatrick running.
The FitzPatrick plant is a General Electric designed boiling water reactor (BWR) that went operational in 1975 and has a regulatory license to operate through October 17, 2034. It has a maximum dependable capacity of 838 MW.
Entergy also operates two reactors – Units 2 and 3 – at the Indian Point Energy Center in Buchanan, N.Y., which is comprised of Westinghouse-designed pressurized water reactors (PWR) that went operational in 1974 and 1976, respectively. Those units are rated with maximum dependable capacities of 1,028 MW and 1,042 MW.
Entergy's Palisades PWR plant in Covert Township, Mich., has a maximum dependable capacity of 811 MW, while the Pilgrim BWR power plant in Plymouth, Mass., has a maximum dependable capacity of 688 MW.
Nuclear power is clearly the frontrunner for generational capacity for the company. The company lists its wholesale commodities by generation capability, noting its nuclear fleet's capability is 4,406 MW, while its natural gas and fuel oil capability is 213 MW, followed by coal (181 MW) and wind power (80 MW).
The company said that its discussions with Exelon “are consistent with Entergy's commitment to consider viable options that would allow FitzPatrick to remain in operation.”
However, the sale appears contingent on progress New York State makes with is Clean Energy Standard. “We are working with Exelon to come to commercial terms on a sale transaction that depends largely on the final terms and timeliness of the New York Clean Energy Standard,” said Entergy Wholesale Commodities President Bill Mohl.
Entergy announced in November 2015 that it planned to shut and decommission the FitzPatrick plant. The date of closure, if that occurs, would be January 2017, prior to the plant's next refueling outage. However, state support for nuclear power, a carbon-free energy source that is currently undermined by low natural gas prices and support for wind and solar power, is uncertain. The state's Public Services Commission over the past weekend proposed a subsidy program for nuclear power plants that would amount to hundreds of millions of dollars per year over a 12-year span that would help upstate nuclear plants continue to be competitive in the wholesale market.
"We thank New York Gov. Andrew Cuomo for his leadership in promoting the Clean Energy Standard, which provides incentives for financially strapped nuclear power plants," Mohl said.
Exelon weighed in on New York's clean energy plan on Thursday. "Gov. Andrew Cuomo's draft clean energy plan for New York would save thousands of high-paying jobs and spur hundreds of millions of dollars in short-term investment in energy infrastructure," the company said.
The proposals as announced Friday by the Public Service Commission "would keep Exelon's upstate nuclear plants running as the state transitions to a 50 percent zero-carbon energy standard by 2030," said Exelon in a statement. The company's executive vice president for Governmental and Regulatory Affairs and Public Policy Joseph Dominguez announced that the company would "reinvest approximately $200 million" in the company's New York plants next spring should the proposal go through.
Exelon operates the R.E. Ginna and the Nine Mile Point power plants that would be affected by the proposal.
Entergy also said the sale of FitzPatrick was aligned with the company's overall strategy of moving away from merchant power markets and towards a company operating exclusively as a utility in regulated markets.
In addition to the Clean Energy Standard, any transaction between Entergy and Exelon would be subject to completion of definitive commercial agreements, as well as regulatory approvals, Entergy noted.
If discussions between Entergy and Exelon do not result in an agreement for the sale and transfer of ownership of FitzPatrick, Entergy will move forward with its current plan to cease operations, followed by decommissioning.
"Our focus remains on providing employees and the community the best opportunity we can to prepare for either a transition to a new owner or a shutdown and decommissioning," said Brian Sullivan, site vice president and Entergy's top official at FitzPatrick.
However, Entergy's discussions with Exelon provide the opportunity for a potentially different outcome for FitzPatrick, and therefore require the plant to proceed along two parallel paths: preparing for the plant's permanent shutdown and decommissioning under the current plan, while also preparing for a possible refueling and continued operation in the event of a sale.