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Ginna owner seeks deal to keep nuclear plant open

By: Steve Orr |

The owner of the Ginna nuclear power plant, hoping to stave off closure of the facility, has asked New York regulators to help secure a deal with RG&E to sustain Ginna’s operations.

Exelon Corp., which owns the Wayne County nuclear plant, wants Rochester Gas and Electric Corp. to sign a contract promising payments keep the plant running. Chicago-based Exelon filed a petition Friday asking the state Public Service Commission to enter into a multiyear contract by the end of 2014.

The contract would be based on the conclusion that Ginna, which provides a good part of all the electricity used by RG&E’s customers, must continue to operate to ensure the continued reliability of that service.

With no contract, Exelon said in its petition that it likely would close the 44-year-old Ginna, one of the oldest commercial nuclear plants in the country. Located on the Lake Ontario shoreline, it can generate 577 megawatts of electricity, or enough to satisfy the needs of about 400,000 residential customers.

“It is no secret that our plant, like others in the region, faces financial challenges. But this filing is actually good news for the hundreds of hardworking men and women that work at the plant and for the community that we serve because it is an encouraging step toward continuing to operate the plant for the foreseeable future,” Joe Pacher, Ginna site vice president, said in a statement released Friday.

About 700 people work at the plant, which is by far the largest property taxpayer in the town of Ontario and likely is the largest in Wayne County.

In statements issued Friday afternoon, RG&E and Exelon both pledged to work with the PSC on the proceeding. Exelon will continue to operate the plant while the process unfolds, spokeswoman Maria Hudson said.

RG&E built the plant in the late 1960s and named it for a former chairman, Robert E. Ginna. As part of a move to deregulate energy markets, the PSC ordered utilities to sell off their power generation, and in 2004 RG&E sold Ginna to Constellation Energy for $423 million. Constellation now is part of Exelon.

Under terms of the Ginna sale, RG&E was given the right to buy up to 90 percent of the electricity generated at Ginna at fixed prices, an arrangement cast at the time as a good deal for both parties. That 10-year arrangement expired June 30.

Exelon, the nation’s largest nuclear-plant operator, has talked openly about the possibility that it might close some of its facilities because they’re not economically viable.

In the petition filed Friday, the company said that as the expiration of the long-term arrangement with RG&E loomed, it examined Ginna’s finances and concluded it was likely to lose money and was a candidate for closure.

But Exelon then asked for a study to determine what effect Ginna’s closure would have on the reliability of electric service in RG&E’s service territory. According to the petition, that study, finished in May, concluded that Ginna remained essential.

So Exelon now has invoked a regulatory procedure under which, if the PSC issued the requested order, RG&E would pay a fixed amount of money each year to keep Ginna in operation. The amount, the number of years and other terms remain to be negotiated after the commission acts, if it does.

A similar “reliability support services agreement” exists between the owners of a coal-fired power plant in Tompkins County and New York State Electric and Gas Corp., RG&E’s sister company.

That deal drew criticism from environmentalists because NYSEG was paying to prop up a polluting coal plant. It remains to be seen whether an RG&E-Exelon deal with provoke similar criticism from opponents of nuclear power, some of whom have stated publicly they hope financial pressure would lead to the shuttering of Ginna and other plants.