Clearwater Opposes $7 Billion Ratepayer Subsidy to Bail Out Upstate Nuclear Plants

On Friday, July 8 the New York State Department of Public Service staff issued a recommendation to the Public Service Commission that drastically adds to the cost that ratepayers will incur to subsidize the nuclear bailout of unprofitable nuclear power plants in the western part of the state, as part of the Clean Energy Standard proceedings.  The proposal imposes a tax on the ratepayers of the state of approximately $7.6 billion (up from an estimated $1.8 billion in the previous version) and dramatically changes the formula for how these funds will be levied.  Staff’s earlier cost estimates for the Tier 3 nuclear subsidies ranged from $59 million to $658 million over the first 7 years.  Now, under the new proposal, Staff estimates the first two years will cost nearly $1 billion.  Over the life of the program, this could amount to over $7 billion that will be paid by New York low-, middle- and higher-income residents, large and small businesses, local, county and state municipalities, schools, health care facilities and many others.  The proposal also leaves open the possibility of including a subsidy to Indian Point, which is estimated to cost as much as $4 billion more through 2030.

Comments are due on Monday, July 18 – only six business days after the PSC Staff’s revised proposal was issued.   In response to the revised proposal, Hudson River Sloop Clearwater joins a growing group of organizations and businesses that have severely criticized the plan and the rushed process being used to pass it.  They have  asked Governor Cuomo and PSC Chairperson Zibelman to issue a 45-day extension to review this greatly expanded proposal because the revisions are so extensive that there will be significant new impacts on ratepayers, utilities, and electricity markets.   Under the NY State Administrative Procedures Act (SAPA), 45 days is the customary period for public comment.  A project that will have such a huge impact on New York’s economy certainly warrants that level of review.

Signers include Alliance for a Green Economy, New York Public Interest Research Group (NYPIRG), Physicians for Social Responsibility, and more.  “There are cheaper, fairer and less costly ways of meeting the laudable goals of economic development and carbon reduction.  Under this new proposal, New York will spend more than twice as much on nuclear subsidies than it will for renewable energy under the Clean Energy Standard.  This is an opportunity cost and a waste of money that New Yorkers cannot afford,” wrote the groups.

The 25 groups (and growing) that have signed onto the letter so far are adding their voices to several parties in the Clean Energy Standard case who have called for an extension to the comment deadline. Entities that previously filed extension requests in the case include Multiple Intervenors (an association of 60 businesses), the City of New York, Nucor Steel Auburn, Environmental Advocates, and Citizens for Local Power.

“These subsidies are tantamount to a massive nuclear tax, which the PSC is levying to bail out an industry that can no longer compete as fuel-free renewables are rapidly coming on line,” says Manna Jo Greene, Clearwater’s Environmental Director.  “This may be one of the worst examples of corporate welfare in New York State in recent times.  If Exelon purchases Fitzpatrick from Entergy, instead of allowing it to close, this one company may receive over $7 billion – with a “b” – in subsidies between 2017 and 2030.  Most of the individuals, businesses, non-profits and municipalities that will be impacted are barely aware of this proposed action, but they will suffer its consequences over the next decade and beyond in much higher fuel bills.”

“The great challenge of this time is how to transition to a renewable energy economy without burning more fossil fuel,” Greene added.  “Clearwater believes that these subsidies would be much better invested in the rapid deployment of large-scale solar, on and off-shore wind, hydroelectric, storage and efficiency, than in propping up aging and unprofitable nuclear facilities without the public even understanding what is being proposed.

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