New York approves Clean Energy Standard with subsidy for nuclear

By Ryan Deffenbaugh

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The New York State Public Service Commission approved Aug. 1 a historic Clean Energy Standard that requires half the state’s energy come through renewable sources by 2030 — with some help from a nuclear subsidy along the way.

The state is looking to wean itself off its reliance on fossil fuels for power. The policy was championed by Gov. Andrew Cuomo, who says the standard could reduce the state’s greenhouse gas emissions by 40 percent, compared to 1990 levels.

“New York has taken bold action to become a national leader in the clean energy economy and is taking concrete, cost-effective steps today to safeguard this state’s environment for decades to come,” Cuomo said in a statement following the PSC’s vote.

The Clean Energy Standard will require utilities and other energy suppliers to aggressively phase in new renewable power sources, starting with 26.31 percent of the state’s total electricity load in 2017. The number goes to 30.54 percent in 2021.

To reach that goal, the state will require utilities to purchase a set amount of renewable energy credits from the New York State Energy Research and Development Authority each year. The money from the credits can be used to finance new renewable energy sources to add to the electric grid.

The standard views zero-emission nuclear power as a sort-of bridge to a cleaner energy future. In 2014, nuclear produced about 30 percent of the state’s energy, second only to natural gas, which produced about 40 percent. The state would like to cut down on that natural gas percentage, while increasing the percentage of hydroelectric (18.4 percent in 2014) and solar and wind (5.5 percent in 2014, grouped with other renewables).

But nuclear plants have struggled to remain profitable while competing with the much-cheaper natural gas, in part from hydrofracking. To help keep nuclear plants from shutting down, and possibly increasing reliance on natural gas-fired plants, the state has agreed to direct millions of ratepayer dollars to upstate nuclear plants.

Starting in April 2017, the CES will require all six of New York’s investor-owned utilities to pay for the “intrinsic value,” as described in the press release from Cuomo, of the carbon-free emissions from nuclear plants by purchasing Zero-Emission Credits. The plan designates up to $965 million over two years to keep endangered reactors in service.

Karl Rábago, the executive director of the Pace Energy and Climate Center, said that while he had some concern about using scarce ratepayer dollars toward nuclear power, letting them fail would “dig a big hole” in the amount of emissions-free electricity currently available in the state.

“The ultimate goal of a Clean Energy Standard is carbon-emissions reduction, and I think we’d be handicapping ourselves if we gave up that much emission-free generation now,” Rábago said. “So you recognize it is going to take a while to get the run rate up on renewable energy, so let’s not handicap ourselves, and channel some resources to keeping nuclear power plants afloat.”

The industry group Nuclear Matters also praised the subsidy, saying it shows New York properly values the role of nuclear in producing carbon-free energy.

“Governor Cuomo importantly recognizes the role that all types of carbon-free power can and must play in helping us achieve our clean energy goals,” said Carol Browner, a Nuclear Matters Leadership Council member, in a statement.

Exelon Corp’s Ginna reactor in Wayne County, Nine Mile Point Units 1 and 2 in Oswego County and Entergy Corp’s FitzPatrick reactor in Oswego County would all be eligible for the program.

Entergy’s other New York nuke plant, Indian Point Energy Center in Buchanan, does not qualify for the subsidy. Indian Point’s Unit 2 and 3 reactors were not included in the Zero-Emission Credits program because it is not facing financial issues, according to the PSC’s order.

Alex Beauchamp, northeast director for the group Food & Water Watch, told the Associated Press that the subsidy represented “a step in the wrong direction.”

“New York needs a true clean energy revolution to move the state to 100 percent renewable energy, but the billions announced today to bail out an old, dangerous and unprofitable technology make that revolution even more difficult,” Beauchamp told the AP.

But several environmental groups have released statements in favor of the Clean Energy Standard as a whole, including the Sierra Club, Alliance for Clean Energy New York and the Environmental Advocates of New York.

“Governor Cuomo’s commitment to reach 50 percent renewable electricity by 2030 can dramatically change and modernize the energy landscape in New York, sending a strong signal to attract new private investment in renewables, like wind and solar,” said Anne Reynolds, executive director of the Alliance for Clean Energy New York.

However, the Clean Energy Standard’s impact on business has been questioned. Darren Suarez, director of government affairs for The Business Council of New York State, Inc. said the standard should have ensured that power was provided at a reasonable rate for all customers.”

“It is clear the Public Service Commission has failed to properly evaluate the significant costs associated with the Clean Energy Standard,” Suarez said in a statement. “This failure will cost New York State businesses billions of dollars and put current and future New York manufacturing jobs, and jobs in other energy-intensive sectors, in mortal danger.”

Westchester power supplier Consolidated Edison, Inc., came out in favor of the standard.

“There are additional costs associated with renewable energy,” the utility said in a statement. “But the costs of not taking steps now to reduce emissions and protect the planet for future generations are even greater.”

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About the author

Ryan Deffenbaugh covers energy, education, food and beverage and the Sound Shore for the Westchester County Business Journal. He previously worked for Westchester Magazine and The Citizen daily newspaper (Auburn, N.Y.). He started with the Westchester County Business Journal in March 2016.
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