On the verge of being mothballed as a result of a challenging market for its power, the R. E. Ginna Nuclear Power Plant in western New York got a three-and-a-half-year reprieve when plant owner Exelon reached a reliability support service agreement (RSSA) with Rochester Gas & Electric (RG&E) on Feb. 13. The deal will keep the single-unit 580-MW plant running at least through September 2018.
Ginna has frequently topped lists of the most at-risk nuclear plants because its previous power purchase agreement with RG&E ran out last June, and Exelon has stated that its costs of operation are well above market rates for electricity in western New York. Exelon has lost more than $100 million dollars on Ginna since 2012. Despite the economic challenges, both RG&E and the New York Independent System Operator have stated that Ginna is needed to support reliability in the area.
Under the new RSSA, which must still be approved by the New York Public Service Commission and the Federal Energy Regulatory Commission, RG&E will pay Exelon $17.5 million a month through September 30, 2018. That date was chosen because it is when a proposed new transmission line is scheduled to go into service, allowing RG&E to import enough power to replace Ginna. The RSSA goes into effect in April.
RG&E will recover its costs under the RSSA from its ratepayers, who will see their bills rise about 4.2%, or $3.89 per month, on average.
RG&E CEO Mark Lynch said in a statement that the company had “worked diligently in the best interests of our customers to reach an agreement with Ginna, recognizing the importance of ensuring reliable service on reasonable terms for all parties.” Exelon said the deal would “ensure grid reliability in the greater Rochester area while RG&E completes a host of necessary transmission and distribution upgrades.”
RG&E has the right to terminate the agreement before the end date with 12 months’ notice. The agreement can also be extended for another 18 months should Ginna still be needed for reliability purposes, provided notice of the extension is given by January 2017.
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).