Entergy Corp. is closing yet another nuclear power plant, this time in upstate New York. The electric power producer and retail distributor is set to close the James A. FitzPatrick Nuclear Power Plant in Scriba, New York. This announcement comes right on the heels of Enetergy’s decision to close the Massachusetts located Pilgrim nuclear power plant by 2019.
New York politicians are displeased with Entergy’s decision to close the FitzPatrick plant. The nuclear plant generates 838 MW of nearly carbon-free electricity which powers over more than 800,000 homes. Both Senator Chuck Schumer and Governor Cuomo have had meetings with Entergy officials to keep the plant open but Bill Mohl, president of Entergy Wholesale Commodities commented that “We just couldn’t reach a mutual agreement on the situation.” Regulators are worried over FitzPatrick’s closing because it generates over 2% of the state’s power, making it too important of a source to close. In addition, FitzPatrick provides high paying jobs for skilled workers in the region as well as paying for half the property taxes for the nearest school district of Mexico, NY. Governor Cuomo has come out aggressively against Entergy’s decision to close FitzPatrick, saying that the state would “pursue every legal and regulatory avenue in an attempt to stop Entergy’s actions and its callous disregard for their skilled and loyal work force.”
Today, Entergy is reporting to the New York Independent System Operator (electric grid operator) and to the New York State Public Service Commission that it will retire FitzPatrick after its current fuel cycle which could expire as soon as the end of 2016. At that point, half of FitzPatrick’s 600 workers will be let go and the remaining will stay with the plant until the 5 to 6 year decommissioning process is over. Speaking of replacing displaced workers, Mohl stated that Entergy had already offered jobs to almost all of its workers from the Vermont Yankee nuclear plant which closed end of last year.
Entergy is closing FitzPatrick because the plant is no longer economically viable. Current and forecast power prices have fallen by about $10 per MWh. This equates to a projected annual loss of more than $60 million in revenues for FitzPatrick. In addition, FitzPatrick continues to see lower current and long-term prices because of its proximity to the Marcellus Shale formation. The FitzPatrick nuclear plant also operates as a single unit, making the plant incur a high cost structure. Double reactor plants like Entergy’s Indian Point Energy Center in Buchanan, NY have better capitalization and lower maintenance costs.
The state of New York has battled Entergy as the energy corporation wants to keep Indian Point open. Indian Point is located in Westchester, NY and state officials and regulators alike believe its close proximity to densely populated areas posits a risk for the area. Entergy however does not want to close Indian Point due to its prime location in the New York Metropolitan area which suffers some of the highest electric rates in the nation.
Despite Entergy’s closing of the FitzPatrick nuclear plant, it will still remain the provider of almost two-thirds of America’s nearly carbon-free, clean-air electricity.
Brought to you by the EarlyBird Power Market Research Team.