FERC Sets Ginna Nuclear Facility Agreement for Hearing
The Federal Energy Regulatory Commission (FERC or Commission) continues to look askance at utility requests for guaranteed income streams for their generation resources. Most recently, R.E. Ginna Nuclear Power Plant, LLC (Ginna) received a lukewarm reception to its request to establish a rate schedule and guaranteed revenue stream for its nuclear facility located near Rochester, New York. On February 13, 2015, Ginna filed with the FERC a Reliability Support Services Agreement (Agreement) between Ginna and the local electric utility, Rochester Gas and Electric Corporation (RGE), the purpose of which is to stave off the retirement of the Ginna facility to ensure its continued operation for reliability purposes.
The Agreement’s initial term runs from April 1, 2015, through September 30, 2018, during which time Ginna would receive a cost-of-service-based monthly compensation payment of $17.5 million and payment of 15 percent of the Ginna facility’s energy and capacity market revenues. The Agreement includes an option to extend the term for an additional 18 months beyond September 2018, during which time the monthly payment increases to $18.4 million. Also included are terms addressing the early termination of the Agreement, as well as the operation of the Ginna facility beyond the expiration of the Agreement, in which case Ginna would owe to RGE amounts related to certain capital investments made to the Ginna facility during the term of the Agreement.