Exelon’s R.E. Ginna Power Station in western New York may be the next U.S. nuclear plant to shut down in the face of competitive pressures if the company cannot get approval to substantially increase the rates it charges for the plant’s electricity.
Ginna had a power purchase agreement with Rochester Gas & Electric that expired June 30, and state regulators have given Exelon until Jan. 15 to secure a new agreement. The previous contract set rates at $44/MWh, and Exelon said it would need to charge $71/MWh to earn an 11% profit and $56/MWh to $64/MWh just to break even. Current wholesale power prices in the region, driven by falling costs of natural gas and pressures from wind generation, are under $40/MWh.
The single-unit, 583-MW facility, which came online
in 1970, is still licensed to operate through 2029. The original license was renewed in 2004 following an uprate, and Exelon acquired the plant when it bought Constellation Energy Group in 2012. Since then, however, the company has lost more than $100 million on the plant.
Exelon officials, including CEO Chris Crane, have complained bitterly in recent months that subsidies and incentives for renewable energy, particularly wind, are making its nuclear plants uneconomic by placing unfair downward pressure on wholesale power prices. The company has asked Illinois officials for support measures to keep three of its nuclear plants in that state operating.
The reception to Exelon’s proposal for Ginna has not been favorable. Anti-nuclear groups have blasted the idea, and other generators in the area have come out against it as well. In filings with New York regulators, both NRG Energy and Entergy said the state should allow competitors to offer alternative purchase agreements rather than locking Rochester ratepayers into well-above-market rates.
Ginna would not be the first nuclear plant in the region to shut down on economic challenges alone. Entergy this month shut down the Vermont Yankee plant on similar concerns. Exelon has said it will delay decisions on retiring its at-risk plants at least until May 2015.
—Thomas W. Overton, JD, POWER associate editor