Fitzpatrick plant.JPG

James A. FitzPatrick Nuclear Power Plant and other "merchant" nuclear plants face financial pressure due to low prices in the competitive wholesale power market.

(Photo from Nuclear Regulatory Commission)

SCRIBA, N.Y. - The outlook for Central New York nuclear plants has slipped from prosperous to perilous. Experts say two of the region's four nukes - FitzPatrick in Oswego County and Ginna in Wayne County -- are at risk of shutting down prematurely if the financial picture does not improve in the years ahead.



Syracuse.com ran a story about the problem Sunday, citing analysis by Wall Street firms and other experts. In case you missed it, here's a recap of the five biggest problems facing Upstate nuclear power in general, and FitzPatrick and Ginna in particular:

1. The wholesale price of electricity has fallen by half since 2008, mostly thanks to cheap natural gas that can be burned in generators. Unlike utility-owned nuclear plants, which can turn to regulators for rate increases when times get tough, nukes in New York state depend on competitive market prices for their revenues.



2. Power prices Upstate are extra low. There is twice as much generating capacity as demand for electricity in Central New York, and too few transmission lines to move power to higher-priced Downstate areas. By contrast, two nuclear reactors in the lucrative Downstate market - Indian Point Units 2 and 3 - face political opposition but make plenty of money.



3. Nuclear plants are heavily staffed, capital-intensive organizations with high fixed costs to operate. If electric prices stay low for the next few years, as predicted, they may fall below what some nuclear plants need to cover their costs.

4. Three of the four Upstate nuclear plants are among the oldest in the country, putting them at increased risk of costly repairs. Example: FitzPatrick's owner, Entergy Corp., is evaluating whether to proceed with a "substantial investment'' to replace the reactor's condenser tubes.

5. Both FitzPatrick and Ginna are single-reactor facilities. Stand-alone units are more expensive to operate than nuclear plants with more than one reactor, such as Nine Mile Point Units 1 and 2. Exelon Corp. owns Nine Mile Point station and Ginna.

Could a sale or joint venture someday unite FitzPatrick with the Nine Mile Point reactors to improve efficiency? Bill Mohl, president of Entergy Wholesale Commodities, offered no specifics but said options such as selling FitzPatrick or partnering with Exelon are on the table.

What will happen next? Energy prices are always difficult to predict with certainty, but the real wild card in all of this is politics, many observers say.

Oswego County and its state legislators are generally supportive of the nuclear industry, which provides high-paying jobs and millions in property taxes. But Gov. Andrew Cuomo and others are fighting Entergy's efforts to extend the operating license of Indian Point, the company's most profitable asset.

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Contact Tim Knauss at tknauss@syracuse.com or 315-470-3023 or on Twitter @TimKnauss.