On January 25, 2016, the New York Department of Public Service Staff issued a white paper on the Clean Energy Standard (CES), as part of a REV-related proceeding (Reforming the Energy Vision). As directed by Governor Andrew Cuomo in late 2015, the white paper addresses four policy objectives of the CES, which are to:
The policy objective to prevent premature closure of the upstate nuclear facilities is in direct response to the November 2, 2015 announcement by Entergy declaring their intention to close the James A. FitzPatrick Nuclear Power Plant on January 27, 2017. Entergy maintains that FitzPatrick will be closed regardless, indicating it is too late for the CES program to take effect. Other nuclear facilities that could benefit from the proposed CES are R.E. Ginna (currently operating under a Reliability Support Services Agreement through April 2017) and Nine Mile Point 1 and 2.
The scheduled plant closure is a result of worsening economic conditions for nuclear generation, as it competes with lower cost options such as natural gas. In order to encourage the nuclear generators to continue providing emissions-free electricity, the white paper proposes “creating a market to recognize the value of fully licensed nuclear power plants that face financial difficulties… which is not adequately captured in the energy market today.”1 Zero Emission Credits (ZECs) would be created and earned by eligible nuclear plants. Similar to renewable energy credits, ZECs would be traded on the market to provide qualifying nuclear plants with financial support for their cost of operations. As with the renewable energy credits, Load Serving Entities (LSEs) will be required to procure a predetermined amount of ZECs to demonstrate compliance with the CES.
This report is part of the Nuclear Minute series. To view all featured Minutes, please click here.
Contributing Author: Chris Sturgill
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