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New York legislators question nuclear subsidy

6 Mar 2017, 9.33 pm GMT

New York legislators question nuclear subsidy

Washington, 6 March (Argus) — New York lawmakers today questioned the need for a $7.6bn program to subsidize three struggling nuclear power plants, with one prominent Democrat suggesting the plan be delayed.

The estimated cost of the program would mean "severe budgetary implications for a lot of households and a lot of citizens of the state," assemblymember Steve Englebright (D) said at a hearing on the nuclear power credit program. Englebright chairs the New York Assembly Committee on Environmental Conservation.

Other lawmakers at the hearing, held jointly by four Assembly committees, expressed frustration that governor Andrew Cuomo (D) implemented the nuclear program through an executive agency without the input and consent of the legislature.

Last year the state Public Service Commission (PSC) approved a Clean Energy Standard that requires the state to get 50pc of its electricity from renewables by 2030. It also requires power suppliers to buy zero-emissions credits, or ZECs, to support three nuclear stations, at an initial price of $17.50/MWh this year. The overall standard is part of a regulatory package to help the state cut greenhouse gas emissions by 40pc by 2030.

Committee on Consumer Affairs and Protection chairman Brian Kavanagh (D) said that the PSC should provide the legislature with more information about the need for the nuclear support. Kavanagh suggested that the legislature should put a short delay on the ZEC program in order to facilitate more study of the program's costs and potential benefits.

Exelon, which owns two of the three affected nuclear plants and has plans to buy the third this year, cited the employment and climate benefits of nuclear energy. "A vote to shut down nuclear plants is a vote to replace them with fossil fuels," James Vaughn, the senior engineering manager at one of the plants, said.

Without the subsidy Exelon says it will have to close the nuclear plants, a move that could lead to higher CO2 emissions from the state's power sector, which is part of the Regional Greenhouse Gas Initiative cap-and-trade program. Earlier this year, the news that Entergy would shutter its 2,000MW Indian Point nuclear power plant near New York City by 2021 boosted the price of RGGI allowances by 15¢, or about 4pc, in two days.

Together the three affected plants represent a little over 3,300MW of generating capacity. Nuclear accounted for about one-third of New York's electricity in 2015, according to the US Energy Information Administration.

The ZEC program is also facing a legal challenge from electricity suppliers that claim it violates federal law. But the PSC says it is not fundamentally different from renewable energy certificate systems that exist in many US states and do not conflict with federal power market authority.

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