Wednesday, October 28, 2015

Update: Fitzpatrick to close.Ginna Continues Operation, Surcharges in Context, and Fitzpatrick

Ginna Nuclear Power Station
Update: Entergy announces Fitzpatrick closing

Fitzpatrick now scheduled to close in 2016 or 2017.  Announcement was this morning.  Two links:

Entergy press release article

Ginna gets some relief

Ginna Nuclear Generating Station, in upstate New York, was struggling with some of the same issues that are causing Entergy's Fitzpatrick plant to be at risk.

If Ginna closed down, there might be reliability issues on the grid. Therefore,  Ginna was recently given 18 months of financial relief to keep it operating. Ginna is being helped by a surcharge on utility bills: the surcharge lasts from now till March 2017. The surcharge will give Ginna $15.42 million extra per month, in payment for its role in grid reliability.  This charge will cost about $2 per month per customer, in upstate New York.

References: Deal reached on fate of Western New York nuclear facility at Poltico New York (October 23), and Settlement reached in New York to keep the Ginna nuclear plant running at Utility Dive (September 16).

The possibility of this type of positive resolution (for the grid and for the plant) is a good reason to

Sign the petition to keep Fitzpatrick operating! 

If you live in New York, contact your state legislator and your congressman, and urge them to keep Fitzpatrick operating. 

What about the ratepayer?

Maybe this relief is great for the grid and the plant, but what about the ratepayer?  What about that
Fracking equipment
at wellhead
$2.00 per month?

I'm not crazy about more costs to the ratepayer.  If I thought that increasing costs for the ratepayer was a good thing, I would join one of the "environmental" groups that believe electricity should be more expensive--in order to force people to use less electricity.  Instead, I am proud to be on the Coordinating Committee for the Consumer Liaison Group at ISO-NE.  I want to look out for the ratepayer.

With some hesitation, therefore, I share my opinion on the Ginna settlement. I think, in the long run, this settlement is good for the ratepayer, because without it, most of the pricing structure in New York would be held hostage to the fluctuating price of natural gas.

 If the utilities were not "deregulated," any decent utility would want a mix of types of plants on its grid. This mix would be a hedge against sudden jumps in prices for one fuel, sudden jumps in regulatory burden for another type of power plant, etc.

Now that we are "deregulated," the plant that is cheapest today can act as if it were going to be cheapest forever.  Other plants will close down, out-competed---but perhaps only for five years. Then when the once-cheapest fuel type becomes more expensive, the rate-payer is hung out to dry.

It takes many years to site, permit and build a power plant.  Meanwhile, in a single-fuel grid, the grid and the rate-payer have no choices.

Surcharges and Fitzpatrick

I decided to do a quick comparison of some local surcharges on electricity.  I will do this comparison in one-year units..

Ginna: $15.4 million per month, twelve months, $184 million/year, $2 per month per household, $24 a year per household.

Efficiency Vermont.  This utility has a visible surcharge on every Vermont householder's electricity bill.  It charges more than 1 cent per kWh, for all Vermont households.  For an average user (600 kWh/month) the surcharge is be about $7 per month or $84 a year per household.

Households pay this amount, and so do businesses.  IBM (now GlobalFoundries) rebelled, and the legislature enacted SMEEP for large businesses. Large business who make their own efficiency improvements can opt-out of Efficiency Vermont payments, by way of SMEEP. However, only GlobalFoundries qualifies for SMEEP.

Efficiency Vermont helps Vermonters insulate their houses, save energy, etc.  Unfortunately, in practice, this means that Efficiency Vermont collects surcharges from the many, and gives rebates to the few.  (What, me worry? I was one of the few. Efficiency Vermont  helped pay to insulate my house.)

Efficiency Vermont has been controversial, to say the least. Two examples:
Op-ed by Andrew Rudin:  Efficiency Vermont not so efficient.
Vermont Public Radio story: House brings down budget axe on Efficiency Vermont.

Carbon Tax: There is a proposed carbon tax in Vermont, which would start at $10 per ton of carbon dioxide and rise to $100 a ton.  This would eventually lead to a gasoline tax of $0.88 per gallon. This  tax is only proposed, of course.  Still, it gives an idea of what Vermont legislators are thinking nowadays.  (The article about the tax includes 200 comments.)  Meanwhile, an op-ed In Favor of a Carbon Pollution Tax was written by two people who identify themselves with a local anti-nuclear group. They support the carbon tax proposal.

In context

I am going to stop now.  I don't want this to be a treatise on every surcharge on the local grid. However, in context, it is clear that a surcharge for Fitzpatrick nuclear power is likely to be:
  • small (compared to Efficiency Vermont or to carbon taxes)
  • fair (everyone gets the benefit of stable prices on the grid, as opposed to some people get house insulation and some people get only higher electric bills)
  • controversial (no surprise here)


Sign the petition to keep Fitzpatrick operating! 

If you live in New York, contact your state legislator and your congressman, and urge them to keep Fitzpatrick operating. 


Unknown said...

Why make a special surcharge for the plant, instead of just increasing the per-kWh price?

Unknown said...

Followup question: Found the following article, which says the average price will be $3.89, or about $47/yr for the Ginna surchage (although the article is from Feb. of this year [2015], so perhaps the price came down since then in the final agreement). So, I'm just wondering why the difference between the price in your article, vs, theirs?

Ginna plan would come with surcharge

Meredith Angwin said...

Hi Jeff

About the surcharge: I don't know the answer about how the number appears on the bill, but I think it might be called out because this is a temporary situation. So they might not want to roll it in the kWh price directly.

Thank you for the link. Very interesting!

About the earlier article in your link. Near the end, it says that "Rochester Gas and Electric" could pay Ginna "up to" this amount, but could also pay much less. So it sounds like it was probably a straightforward bargaining situation, and the final result was whatever they announced. That is just my guess. I don't have any special knowledge, that is for sure.

Unknown said...

Thanks for the response Meredith. :-)

jim said...

Re: "Sign the petition to keep Fitzpatrick operating!
If you live in New York, contact your state legislator and your congressman, and urge them to keep Fitzpatrick operating."

I know, but sadly they're kowtowing to Greens here like pilgrims to Mecca, like the anti-Indian Point crowd making our Gov Cuomo dance their tune of FUD. We HAVE to jump on their playing field! Saving local nukes MUST be a national-wide nuclear plant community coalition effort! All behind one!

James Greenidge
Queens NY