Tuesday, January 6, 2015

RG&E-Ginna contract due January 15

Posted By on Tue, Jan 6, 2015 at 11:39 AM

Rochester Gas and Electric and the owners of the Ginna nuclear power plant have about a week left to file a contract for the utility to buy electricity from the plant. But it's still not clear exactly how much the agreement is going to cost RG&E customers.

In November, the state Public Service Commission ordered RG&E to negotiate the contract with Ginna; the plant's owners requested the arrangement. Ginna hasn't been able to sell its electricity at high enough prices on New York's competitive market, and its owners said it'd retire the plant without a purchase agreement with RG&E — which could threaten the reliability of the Rochester area's power supply, Ginna representatives say. 

Under the contract, RG&E will buy power from the plant on an as-needed basis, but at rates above the market price. But RG&E and the Exelon subsidiary that owns Ginna haven't filed anything that hints at the contract's potential costs. But a couple of other organizations have taken a guess at what the contract might look like.

An article published yesterday by Bloomberg says that "Exelon will need to charge about 83 percent more than wholesale prices to earn a profit at its Ginna plant, based on company cost estimates." New York's wholesale prices vary from day to day and hour to hour, but all plants get the same base rate for the power they sell into the grid. The rate is an average of what the different plants charge for the power they're able to produce.

And an analysis from Alliance for a Green Economy, which was submitted to the Public Service Commission, says that the agreement could cost RG&E customers an additional $80 million a year, or about $216 per ratepayer. AGREE, which opposes nuclear power, wants the commission to delay a decision on the contract until other alternatives can be fully explored.

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