CONSTELLATION ENERGY NINE MILE POINT NUCLEAR STATION

The owner of Nine Mile Point Nuclear Station in Oswego County is in talks to buy the nearly FitzPatrick nuclear plant, pending state approval of new nuclear subsidies. FitzPatrick is scheduled to shut down in January 2017 because it loses money.

(AP)

SCRIBA, N.Y. - Exelon Corp., the owner of Nine Mile Point Nuclear Station, is in talks to buy and continue operating the adjacent FitzPatrick plant, which will shut down six months from now if the deal fails, according to a source with knowledge of the discussions.

An agreement could be announced as early as tomorrow, said the source, who asked to remain anonymous because neither Exelon nor FitzPatrick owner Entergy Corp. had authorized public statements.

Exelon's acquisition of FitzPatrick would be contingent on state approval of new nuclear subsidies proposed Friday by staff of the New York Public Service Commission, the source said.

The potential last-minute rescue of FitzPatrick heightens the stakes for the PSC, which is conducting an expedited review of ratepayer-funded subsidies worth $480 million a year to keep the four Upstate nuclear reactors running.

The subsidies are proposed as part of the state's clean energy standard. They are intended as temporary support for nuclear plants while the state develops more renewable sources like wind and solar, to avoid increased power generation from fossil fuel sources that emit greenhouse gases.

Both Exelon and Entergy have said their Upstate nuclear plants are losing money because of low wholesale power prices resulting from cheap natural gas.

Now the PSC faces a stark choice: Approve the subsidies and save all four Upstate reactors, or deny the subsidies and face the possible shutdown of three of the four.



Exelon notified the commission last month that it might close the Nine Mile 1 reactor in Oswego County and the Ginna reactor in Wayne County next year if the state does not guarantee subsidy payments by September.

Entergy announced last November that it would close FitzPatrick, which loses roughly $60 million a year.

The administration of Gov. Andrew Cuomo has been working actively to encourage a deal between Exelon and Entergy that would save the jobs at FitzPatrick, according to a state official who requested anonymity.

The proposed nuclear subsidy payments would extend for 12 years and could rise to as much as $805 million a year. Critics this week complained about the fast-track review that is under way. Public comments on the July 8 proposal are due July 18, or just six business days after the proposal was unveiled.

Fitzpatrick Nuclear Power Plant is scheduled to close in January 2017 if the potential sale to Exelon does not go through.

"Under any reasonable interpretation, the current filing deadline, which provides parties with a measly six business days to respond to a new staff proposal on hugely-important issues is unreasonable, inadequate and prejudicial,'' complained attorney Michael Mager, who represents a group of roughly 60 large commercial and industrial electric customers.

Mager asked that the comment period be extended to at least 30 days. Exelon has already warned the PSC not to wait too long, however.

The company told the commission in a letter last month that it needs contracts for the subsidy payments, formally known as zero emission credits, in place by September to justify continuing the refueling of Nine Mile 1 next spring. The company said it is also evaluating whether to continue operating Ginna, near Rochester, which is receiving subsidy payments that will end next March.

Supporters of the Oswego County nuclear industry - local politicians, labor leaders, and others - have urged the PSC to approve the new subsidies as a way to preserve jobs and economic activity.

A coalition of two dozen or more anti-nuclear groups is actively opposing the subsidies, arguing they amount to a "nuclear tax'' that could add up to as much as $7.5 billion over 12 years.

The four nuclear power reactors in Upstate New York, including three in Oswego County, are responsible for $3 billion in economic activity and nearly 25,000 jobs, according to a consultant's report paid for by Exelon Corp. and three unions fighting to keep the Upstate plants alive.

Exelon announced in June that it will close two large nuclear plants in Illinois because the state legislature declined to enact a financial bailout for those plants.

Officials from Exelon and Entergy did not immediately respond to requests for comment today.

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