New Yorker’s Multi-Billion Dollar Corporate Welfare For Nuclear Reactors

Above Photo: View of the Robert Emmett Ginna Nuclear Power Plant on the south shore of Lake Ontario at Ontario, New York. Circa 1974. Source: Department of Energy

ALBANY – A state-approved bailout of three upstate nuclear power plants was the focus of a legislative hearing Monday, but New York’s top energy officials declined to attend.

The state Assembly held a hearing Monday on the state’s “zero-emissions credit” plan, which kicks in on April 1 and will require ratepayers across the state to pay several billion dollars over 12 years to keep open the three aging plants, including the R.E. Ginna Nuclear Power Plant near Rochester.

The hearing, however, was absent the key decision-makers in Gov. Andrew Cuomo’s administration who were behind the initiative.

The state Public Service Commission, which approved the measure last August, declined to testify in person, citing scheduling conflicts and a late invitation to attend. The state Energy Research Development Authority also declined.

“I’m disappointed that they chose not to attend,” said Assemblyman Jeffrey Dinowitz, D-Bronx, who chairs the Assembly’s corporations committee.

“You talk about transparency. One way to show there’s transparency is to speak to the public and speak to their elected representatives.”

Scheduling conflicts

In a statement, Public Service Commission spokesman James Denn said the Assembly “only informed us of this hearing late last week and so we were unable to attend due to scheduling conflicts.”

The nuclear bailout was included as part of the state’s Clean Energy Standard plan, which also includes major subsidies for renewable energy producers.

For the next 12 years, electric utilities will be required to purchase credits at a rate set by a formula, with the proceeds initially going to Exelon Corp., which later this month will own all three remaining upstate plants, including Ginna and two in Oswego County.

The cost, estimated at nearly $1 billion in its first two years, is then passed on to all ratepayers across the state.

Residential customers are expected to pay an average of $2 a month beginning next month, according to the state.

But it won’t be easily apparent to customers: Last month, the Public Service Commission declined a bid by utilities to list the cost as a separate line item on monthly bills.

Backing the rate hike

Cuomo’s administration has defended the program, calling it necessary to meet its clean-energy goals, including a push to cut greenhouse-gas emissions by 40 percent from 1990 levels by 2030.

The subsidy will allow the financially troubled plants to remain open, keeping them producing electricity that’s cleaner than power from fossil fuels, the state contends. Without a bailout, the plants faced likely closure because of low natural gas prices, which benefits their competitors.

Instead of testifying in person, the Public Service Commission and NYSERDA submitted written testimony, touting the plan as a boon for clean energy.

The costs of bringing fossil-fuel plants back online to replace the nuclear plants would outweigh the cost of the subsidy, they wrote.

“Were New York’s safely operating nuclear fleet to close prematurely, old and new dirty fossil fuel generation would replace the emission-free nuclear power, with consumers footing the bill,” they wrote.

The testimony was attributed to Public Service Commission Chair Audrey Zibelman, NYSERDA President and CEO John Rhodes and Richard Kauffman, Cuomo’s top energy adviser.

A no show

At one point, Assembly Consumer Affairs Chairman Brian Kavanagh, D-Manhattan, suggested lawmakers — who have subpoena power for hearings — could force Cuomo’s administration to participate in the future.

Denn said the state commission held 24 public hearings on its Clean Energy Standard, which the nuclear subsidy is part of.

Critics say those hearings came before the plan was altered in July, significantly increasing the estimated cost.

Kauffman and Zibelman testified for more than three hours last week at a separate hearing on the pending closure of the Indian Point Energy Center, a major nuclear plant in Westchester County.

Cuomo pushed to close that plant, questioning the safety of keeping a nuclear plant near densely-populated New York City.

Differing views

Without Cuomo’s administration participating Monday, lawmakers instead heard from private critics and supporters of the plan, including Exelon’s representatives. It began around 10 a.m. Monday and continued into the afternoon.

Blair Horner, legislative director of the New York Public Interest Research Group, urged lawmakers to pass legislation pausing the nuclear subsidy before it takes effect April 1.

NYPIRG and other critics of the plan estimate it will cost ratepayers $7.6 billion over 12 years, though the actual cost will depend largely on the cost of wholesale power.

“I think you hit that pause button, because once these things go on sale, it’s tough to un-ring that bell,” Horner said.

James Vaughn, senior manager at Exelon’s Nine Mile Point plant in Oswego County, spoke in support of the plan, urging lawmakers to be driven by “facts not fear.”

He said the plan is not about “lining our pockets with money,” but keeping the plants profitable so they can stay open and producing clean power.

“At the end of the day, we’re a business,” Vaughn said. “And without these (zero-emissions credits), these plants will shut down.”