Thursday, November 13, 2014

Utility regulators direct RG&E to negotiate power contract with Ginna

Posted By on Thu, Nov 13, 2014 at 2:18 PM

Rochester Gas and Electric customers will probably have to temporarily prop up the struggling R.E. Ginna nuclear power plant.

This morning, the state Public Service Commission directed RG&E to negotiate a temporary electricity purchase contract with Ginna. Earlier this year, Ginna's owner, Exelon subsidiary Constellation Nuclear Energy Group, filed a petition with the PSC requesting that action. In its filing, the company said that the plant has lost more than $100 million in the past three years and that without the contract it'd move to retire the plant.

Constellation sought what's known as a reliability support services agreement. RG&E would agree to buy electricity from Ginna only when it needs the power, and at negotiated prices. Ginna and RG&E had a previous contract where the utility purchased 90 percent of the plant's power, but that contract expired earlier this year.

“We understand the New York State Public Service Commission acted today on Exelon Corporation's July petition, but we won’t be able to comment until we have an opportunity to review the Commission’s Order,” RG&E spokesperson Dan Hucko said in an e-mail.

Audrey Zibelman, the PSC's chair, said that the main issue is ensuring reliable electricity service in the Rochester area. Suddenly removing a plant of Ginna's size from the power grid would jeopardize reliable service, she said. A power sale agreement between RG&E and Ginna would give the utility, the state, and the organization that operates the state's electric grid time to identify alternatives for meeting power demands, should Constellation ultimately close Ginna, she said.

"The issue for us is how do we have an orderly exit," Zibelman said.

Since Ginna's previous contract with RG&E expired, the plant has been selling electricity in New York's competitive market. But the prices that Ginna gets in the market won't provide enough revenue to cover the plant's operating and investment costs, Constellation said in its petition. Statewide, cheap natural gas supplies have driven down wholesale electricity prices.

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