On October 12, Entergy ended speculation surrounding its embattled Pilgrim Nuclear Power Station, located in Plymouth, Massachusetts, by announcing its intent to shut down the 43-year-old plant. Though the specific date for shutdown of the 680 MW plant has not been set, the company notified ISO-New England that it would no longer provide capacity into the market effective June 1, 2019. The primary factors cited by Entergy for the closure of the Pilgrim Nuclear Power Station were depressed gas prices and subsidized renewables. These two factors reduced revenues that, when coupled with rising operating costs, made continued operation of the plant uneconomical. Additional cost pressure materialized in the weeks prior to the announcement when the Nuclear Regulatory Commission placed the plant in Column 4, a categorization that requires enhanced inspections over the next several years that Entergy estimates will result in an additional $45M to $60M in operations and maintenance expenses. This estimate does not include the cost of potential capital investment or other costs to address issues that arise during the inspection.
Less than a month later on November 2, Entergy announced that it would also be closing its 40-year-old James A. FitzPatrick Nuclear Power Plant, which is located in Scriba, New York, at the end of its current fuel cycle (late 2016 or early 2017). Much like Entergy’s rationale for the closure of Pilgrim, company leadership determined that it could no longer run the 838 MW plant due to the “continued deteriorating economics.” More specifically, Entergy highlighted reduced revenues associated with current and long-term wholesale energy prices driven by low natural gas prices, a poor market design that fails to properly compensate nuclear generators for their reliability, the higher cost structures associated with single-unit facilities, and a combination of excess power supply and low demand in the local region.
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Contributing Author: Eric Hanson
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