If No One Wants The Fitzpatrick Nuclear Power Plant To Close, Why Is It Closing?
Last week, Entergy announced it will prematurely close its Fitzpatrick nuclear power plant more than 20 years ahead of schedule, which the company says will save it $250 million. The State of New York says closing the plant will cost the state $500 million and devastate the local community. The loss of carbon-free emissions is closer to $3 billion.
Almost every constituency and politician involved says they really don’t want the plant to close, including the utility itself,the local community, the Governor of New York, the New York Representatives,the New York Senatorsand the Obama Administration.
So why can’t something be worked out?
The local government is more than just worried. The average Fitzpatrick worker earns about $120,000 a year, a huge number in a county where the median household income is only $48,000.
The real reason for Fitzpatrick’s closing, like other recent nuclear plant closings, is the transient warped energy market structure of the unregulated merchant markets, especially in the north and east.
In these competitive electricity markets, prices are lower than they should be because the rules and operations of the marketplace are not capable of capturing everything that should be included in the price. This is known as price formation and the Federal Energy Regulatory Commission is trying to fix this.
But it maybe too little too late for many nuclear plants. Former Senator Judd Gregg (R-NH) told me just yesterday at the annual meeting of the American Nuclear Society in Washington D.C., that there are about 12 single-unit nuclear reactors at risk of premature closing, plants like Byron in Illinois, Ginna in New York and Palisades in Michigan. Their total electricity output is equivalent to a quarter of the country’s wind energy output. If all of them close, we will spend many years just trying to replace that much emission-free generation without displacing any fossil fuel generation.
According to Entergy, the decision to close the Fitzpatrick plant was based on the following factors:
– Sustained low wholesale energy prices. Record-low natural gas prices from proximity to the Marcellus shale formation have caused power prices to fall $10 per megawatt-hour, costing Fitzpatrick more than $60 million in revenues per year.
– Flawed market design. The market fails to recognize or adequately compensate nuclear generators for their benefits such as reliability and being emission-free. FitzPatrick and other nuclear power generators provide grid stability and reliability. They serve as a significant source of large-scale energy generation 24/7, especially during extreme weather conditions like a polar vortex or times of extreme heat.
– Nuclear is never included in clean-energy mandates and doesn’t get the types of subsidies or production tax credits that renewables get.Read full story at Forbes