Bailout of nuclear power plant would set bad precedent
The New York state Public Service Commission and the Cuomo administration will soon decide whether ratepayers can be forced to bail out Exelon, the nation’s largest nuclear power plant operator, and its Ginna nuclear plant, one of the world’s oldest commercial reactors, built near Rochester in 1969. A bailout would set a costly, dangerous precedent with state and national implications.
Across New York and the U.S., as older nuclear plants age, their operating costs are rising while prices for electricity from competing sources are falling, making many of them uneconomical, including a third of Exelon’s fleet. So they seek shelter from market forces that increasingly favor cleaner, cheaper alternatives, including wind and solar.
Ginna is an important test case. It lost $100 million in the last three years. So Exelon negotiated a new purchase agreement with Rochester Gas & Electric worth $735 million — $165 million above the market price for electricity — passing on its losses to customers by raising their rates.
Exelon threatens that without a bailout, it will close Ginna and other uneconomical reactors, undermining electricity supply. Supply fears are overblown — ….
