Entergy Considering Sale of FitzPatrick Nuclear Plant to Exelon

Entergy Corp. announced on July 13 that it is in discussions with Exelon Corp. concerning the potential sale of the James A. FitzPatrick Nuclear Power Plant in Scriba, N.Y.

The news comes following the release of the New York Department of Public Service's proposal to subsidize zero-emissions attributes of upstate nuclear power plants, including FitzPatrick (Figure 1).

1. James A. FitzPatrick Nuclear Power Plant. Entergy plans to close the 838-MW single-unit facility on January 27, 2017. The company said its decision was based on "the continued deteriorating economics of the facility." Source: Entergy Corp.

Entergy announced on November 2, 2015, that it would retire the FitzPatrick plant. Key drivers cited by the company included "significantly reduced plant revenues due to low natural gas prices, a poor market design that fails to properly compensate nuclear generators like FitzPatrick for their benefits, as well as high operational costs."

Today, Entergy said its discussions with Exelon are consistent with its commitment to consider any viable option that would allow FitzPatrick to remain in operation.

"In keeping with our corporate strategy to move away from merchant power markets and toward a company operating exclusively as a utility in regulated markets, we are working with Exelon to come to commercial terms on a sale transaction that depends largely on the final terms and timeliness of the New York State Clean Energy Standard," said Entergy Wholesale Commodities President Bill Mohl. "We thank New York Governor Andrew Cuomo for his leadership in promoting the Clean Energy Standard, which provides incentives for financially strapped nuclear power plants."

In addition to the Clean Energy Standard, Entergy said any transaction between it and Exelon would be subject to completion of definitive commercial agreements, as well as regulatory approvals. If no agreement is reached with Exelon, Entergy said it would move forward with its current plan to cease operations and decommission the unit.

"Our focus remains on providing employees and the community the best opportunity we can to prepare for either a transition to a new owner or a shutdown and decommissioning," said Brian Sullivan, FitzPatrick's site vice president.

The discussions leave the plant in a state of limbo. Workers must not only prepare for permanent shutdown and decommissioning, but also for a possible refueling outage and continued operation. Entergy hopes to complete negotiations with Exelon by mid-August, which would remove the uncertainty.

Exelon operates the largest fleet of nuclear plants-23 reactors-in the U.S. But it has had its own share of economic troubles with the units. On June 2, it announced it would close its Quad Cities and Clinton facilities for economic reasons. Two weeks later, Omaha Public Power District announced that it would retire its Fort Calhoun nuclear plant, which Exelon operates, for similar reasons. Exelon has also warned that its Byron and Three Mile Island plants are at risk of closure.

The struggles, however, don't seem to be affecting Exelon's interest in FitzPatrick, now that subsidies are being considered in New York. The company also operates the two other upstate New York facilities-Nine Mile Point (which sits adjacent to FitzPatrick) and R.E. Ginna-that would be eligible for subsidies under the Department of Public Service proposal.

-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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