New York Bails Out Nuclear Plants to Cut Carbon-Dioxide Emissions

Published August 25, 2016

New York State’s Public Service Commission voted 4–0 on August 1 to adopt a “Clean Energy Standard,” which mandates by 2030 the state get at least 50 percent of its electricity from renewable-energy sources and requires a 40 percent cut to greenhouse-gas emissions.

The plan also requires utilities to purchase electric power from several New York nuclear power plants, all of which are struggling financially, at above-market rates.

Gov. Andrew Cuomo (D) justified the $7.6 billion nuclear bailout as necessary to meet the state’s ambitious carbon-dioxide emission cut. If the non-carbon-emitting nuclear plants were to close, they would likely be replaced by facilities burning fossil fuels.

The major beneficiary of the nuclear portion of the Clean Energy Standard will be Exelon, which owns the Ginna and Nine Mile Point nuclear plants and is in talks to purchase the FitzPatrick plant, which is owned by Entergy Corp.

Low natural-gas prices are hurting nuclear plants’ abilities to compete with gas-fired plants. The Ginna plant has already been receiving government support throughout the past few years, thanks to a surcharge  placed on bills sent to customers of New York State Electric and Gas corporationand Rochester Gas and Electric, while Entergy announced in 2015 it planned to close FitzPatrick in 2017 unless it received government support.

Renewable, Not Nuclear

Some environmental groups objected to New York’s Clean Energy Standard, saying it gives short shrift to renewable-power sources while giving billions to large energy companies.

The Lohud Journal News reports Alex Beauchamp, the Northeast regional director for Food and Water Watch, a pro-renewable-power group, called the plan “reckless.”

“New York needs a true clean energy revolution to move the state to 100 percent renewable energy, but the billions announced today to bail out an old, dangerous, and unprofitable technology make that revolution even more difficult,” said Beauchamp in the Journal News.

‘Energy Laboratory’

Dan Kish, senior vice president for policy at the Institute for Energy Research, says New York’s energy policies resemble a flawed science experiment.

“New York is becoming an energy laboratory, using humans as guinea pigs,” said Kish. “Every crazy idea that comes along, they turn it into law, and as a result, New Yorkers’ electricity bills are going through the roof.

“The state has banned smart horizontal drilling and hydraulic fracturing, and it is making it harder to build pipelines,” Kish said. “They are forcing more and more intermittent green energy into the mix, and now they have to subsidize nuclear because of their bad decisions on part-time wind and solar.

“New Yorkers will soon see businesses leave for greener pastures,” Kish said.

Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, says the Clean Energy Standard is just the latest New York initiative to damage the state’s business environment.

“New York, once the manufacturing capital of the world, has regulated and taxed most of its industries out of business,” said Ebell. “The next step in destroying the state’s economy and impoverishing its citizens is to raise energy prices.

“Hare-brained climate policies, such as the Regional Greenhouse Gas Initiative, have already raised New York’s electric rates far above the national average,” Ebell said. “Gov. Cuomo’s Clean Energy Standard is just the icing on the cake, guaranteeing New York’s status as an economic basket case for the next generation.”

H. Sterling Burnett, Ph.D. ([email protected]) is a research fellow with The Heartland Institute.