Early this fall, Entergy announced that both the Pilgrim plant and Fitzpatrick plant were losing money, and that Entergy would soon decide whether to continue operating those plants. Entergy said they would make the decision by the end of October.
The Pilgrim plant has been decided: Vice President Bill Mohl of Entergy announced that the Pilgrim plant in Massachusetts would close by 2019. At the same press conference, Mohl said that Entergy has not yet made a decision about whether it would to continue to operate the James A. Fitzpatrick plant in New York State. (You can read about the press conference here, and even see the video of the whole conference.)
Entergy has not made the decision about Fitzpatrick. However, on October 16, Entergy took a $965 million charge against earnings, writing down the value of the Fitzpatrick plant by that amount. (Yes, that's about a billion-dollar write-down.)
The people in the Fitzpatrick area do not want the plant to close. Hundreds of people in upstate New York rallied in favor the plant. You can see a short video of the rally here; the video includes interviews with local legislators who support the plant. The Syracuse.com article that describes the write-down also has more than thirty pictures of the rally.
Negotiating with the Governor
However, Governor Cuomo's engagement is something that is rather hard to define. Despite the fact that Entergy closed Pilgrim and despite the fact that Entergy took almost a billion-dollar write-down on the Fitzpatrick plant, Cuomo is treating the situation as if it is all about….well, all about him.
Cuomo's view is that Entergy is threatening the state with "job losses" and Entergy won't get away with this. Yes, Cuomo himself plans to stand up to Entergy, despite their "threats." What a guy! (sarcasm alert)
A quote from a letter Cuomo sent to Entergy, as reported by Tim Knauss in Syracuse.com:
I strongly caution Entergy not to use the threat of job losses as a means of prodding economic relief to help their bottom line. This tactic has been attempted by others in the past and has been unsuccessful. In this state, an entity called the Public Service Commission has oversight over services deemed to be in the statewide public's best interests.
Entergy should keep that in mind. Any decisions will be made on the merits
Entergy didn't write an answer to Cuomo directly. Instead, Vice President Bill Mohl wrote a note to the employees which indirectly referenced the Cuomo's accusations of "threatening job losses." Once again, Knauss has the story in Syracuse.com. Here's a quote from the Mohl letter to the employees:
While we have been unsuccessful to date, our discussions [with the state] are continuing as we approach a final decision. Quite frankly, our desire has been to engage in meaningful discussions regarding continued operations of Fitzpatrick without first having to provide formal notification of a Fitzpatrick shutdown decision to the State of New York, as some have indicated is necessary. Most recently, we have heard inaccurate claims that we are "holding employees hostage" or "only seeking to improve our bottom line." That is simply not the truth. We are facing substantial financial challenges at Fitzpatrick and have been negotiating in good faith with New York State over the last several months to obtain certainty for this facility.
Governor Cuomo acts as if New York State has never made any kind of concession to attract or keep a business. He is shocked that a business would ask for such a thing, in order to continue to employ people in New York. He is shocked, shocked!
Meanwhile, here in Vermont, we can only envy the deep pockets and major financial concessions that New York gives to businesses.
New York basically outbid Vermont to have a new wafer fabrication plant placed in their state. New York was able to offer $1.865 billion dollars in concessions to the plant owners, the emirate of Abu Dhabi. Poor little Vermont could offer---a $4.5 million dollar "Enterprise Incentive Fund." (An existing plant in Vermont will continue operating, however.) It's a long story, and well told in this VTDigger article Global Foundries to Keep IBM Plant in Essex Going. Some quotes:
GlobalFoundries’ footprint in New York vastly outstrips that of Vermont. The company…is wholly owned by the emirate of Abu Dhabi…..
New York state has offered GlobalFoundries about $1.865 billion in financial incentives to establish itself in the state, according to a recent situational analysis of IBM’s plant in Essex Junction by the Greater Burlington Industrial Corp.
In May, the Vermont Legislature budgeted for a $4.5 million Enterprise Incentive Fund, which Gov. Peter Shumlin can tap at his discretion with limited legislative oversight….
Perhaps when Governor Cuomo gets over his advanced state of shock, he can think about agreeing to some small concessions to keep a steady, reliable electricity supplier, with a steady, reliable payroll, operating in his state. He won't even have to figure out how to explain why he is sending almost $2 billion dollars of New York taxpayer money to Abu Dhabi. Because he won't be sending any money to Abu Dhabi!
By keeping Fitzpatrick operating, Cuomo will be taking care of his own people. I think that is what a governor is supposed to do. I urge him to do so.