OTHER STATES EXPERIMENT WITH NEW YORK’S NUCLEAR SUBSIDIES
As the first state to implement subsidies to support struggling nuclear power plants through zero-emission credits, New York has caught the attention of other states confronting similar challenges.
New York had been facing the threat of three unprofitable upstate nuclear power plants potentially closing, in part due to cheap natural gas. Gov. Andrew Cuomo’s administration touted the more than $7 billion in subsidies as a way to meet the state’s clean energy goals, keep the plants open and save more than 2,000 jobs. Energy consumers will be paying for the subsidy as an additional fee on their energy bills over the next 12 years and efforts to block the subsidies have stalled in the state Legislature.
New York’s strategy to save its dying nuclear power industry is now spreading to other states, alarming opponents of the plan.
NRG Energy, which has three natural gas plants and an oil plant in New York, has joined with others to file a lawsuit in federal court against the subsidies in Illinois and New York. “These things are spreading like the plague,” said David Gaier, a spokesman for NRG Energy. “Our position is we will fight these nuclear bailouts wherever and whenever they emerge.” Ohio, Pennsylvania, Connecticut and New Jersey are other states where similar legislation is either under discussion or has already been introduced.
Dean Ellis, a senior vice president for regulatory and government affairs at Dynegy, which owns one gas plant in New York and has joined the lawsuits, also warned about a “contagion” of such policies. “They’re using the New York playbook to justify subsidizing their reactors in those other states.” He suggested that upstate job concerns led New York to rush to approve the proposal, rather than safety or environmental worries.
In both Illinois and New York, Exelon Corp. operates the nuclear power plants in question and the company defended public financial support for its plants. “In the absence of coordinated federal policy to address climate change, states … can serve as incubators for innovative policies to address complex economic, environmental and energy challenges, as was recently and successfully demonstrated in New York – and following in its footsteps Illinois – with the adoption of programs to support zero-emissions nuclear plants,” an Exelon spokesperson said in a statement.
In April, New York’s Clean Energy Standard went into effect, which mandates that 50 percent of the state’s electricity come from renewable energy sources by 2030. It marks a transitional period for the state’s energy production, as the Indian Point nuclear power plant in Westchester County will go offline by 2021 and a small wind farm off the coast of Long Island was approved earlier this year.
“There is a little bit of irony that the guys who are trying to keep old coal plants alive are simultaneously arguing about the need to keep nukes alive because of protecting the environment.” – Karl Rábago, executive director of the Pace Energy and Climate Center
State Chairman of Energy and Finance Richard Kauffman said in a statement that the closure of the upstate nuclear plants would have resulted in a spike in carbon emissions, just like Germany has experienced following its nuclear shutdowns. “(The program) gives time for the state to build renewable energy from wind, solar and hydro to achieve the mandate of 50 percent of electricity consumed to come from renewables by 2030. We would fall well short of these goals … if we suddenly lost the emissions-free power now provided by the federally licensed nuclear power plants in upstate New York,” he said.