Cuomo’s $8 billion nuclear subsidy is a bad deal for New Yorkers

Get out your wallets. Governor Cuomo’s energy plan just got very expensive, not to mention dirty and dangerous. On August 1, the New York Public Service Commission, stacked with the Governor’s appointees, followed through on his directive to subsidize uncompetitive nuclear reactors into profitability in upstate New York.

The rationale behind the nearly $8 billion in subsidies committed to nuclear operators over the next 12 years was that their reactors are needed to keep New York on track to meet the state’s climate goals. But the necessity of the continued operation of the state’s uneconomical nuclear generators was never proven during this case, and no alternatives were considered. Instead, the Public Service Commission rushed toward the governor’s pre-ordained outcome, one that will raise rates on every electricity consumer in New York – residential, commercial and municipal.

The plan was approved despite widespread opposition from environmentalists, consumer advocates, businesses, elected officials and more than 15,000 people who submitted comments opposing the nuclear subsidies.

Nuclear proponents claim that nuclear power is “clean” because its carbon footprint is smaller than that of coal or gas. But no one can deny that nuclear power has serious environmental and safety pitfalls: radioactive contamination during uranium mining, routine radioactive emissions, accidental radioactive spills and leaks, and the intractable problem of nuclear waste. There is also the risk of major accidents. Researchers recently calculated the odds of another Chernobyl-size nuclear accident in the world before 2050 to be 50:50.

Nuclear supporters often paint themselves as the pragmatic ones. When at their most honest, they embrace nuclear power as a lesser of evils, as a necessary if unfortunate technology that must be preserved in the era of escalating global warming.

But how pragmatic is this approach to climate action?

The nuclear bailout will simply put off for 12 years the inevitable closure of reactors in New York. The truth is we will have to replace these plants sooner or later. Governor Cuomo has just kicked the can down the road, running up enormous costs in the meantime.

There is no reason we have to wait 12 years to close nuclear reactors. The New York Independent System Operator’s (NYISO) most recent “Power Trends” report includes enough projected energy efficiency and wind projects already proposed to replace in the near-term the output of the two reactors most close to closure: FitzPatrick and Ginna. The NYISO also found in an earlier report that both those reactors could close, along with three coal plants and two gas plants, and the lights wouldn’t go out.

Meanwhile, if you compare the high price of nuclear power against alternative ways to reduce greenhouse gas emissions, the nuclear bailout seems like a massive rip-off. The nuclear subsidies approved last week will guarantee that the nuclear operators receive $56 for every megawatt hour they produce during the first two years of the program, about 45 percent more than the market price for power. That price, which includes market rates and subsidies, will rise gradually, adjusting every two years, until it reaches $68 per megawatt hour in 2027.

Compare that to energy efficiency, which has proven itself as a resource in its own right. The cost per megawatt hour of energy saved through efficiency measures – such as LED lightbulbs, efficient appliances and weatherization – is between $25 and $40 per megawatt hour. This is well below the cost of nuclear power. Wind, too, is cheaper. The “Lazard Levelized Cost of Energy Analysis,” which creates an apples to apples comparison absent subsidies, says wind power in the Northeast can be purchased for as low as $44 per megawatt hour.

Why on Earth should consumers be forced to buy $56 megawatts from nuclear plants when they can save all that energy for less than $40 per megawatt hour or buy wind for $44?

The Public Service Commission went into this case with one goal: follow Governor Cuomo’s directive to subsidize away the economic problems plaguing upstate nuclear reactors to put off their inevitable closure for a few years.

The nuclear industry knew it could get anything it demanded in a scenario like that, so we ended up with a 12-year commitment to extraordinarily high-cost nuclear power. Under this program, nuclear plants will never have to compete with renewable energy or energy efficiency providers, even in cases where others might offer more environmental benefits for lower costs.

That's an unnecessarily painful price for communities and businesses throughout New York to pay for a program from which most will see little to no benefit. It would be far cheaper, and more effective, simply to invest in building our clean energy economy, in which all New York communities can have a share.

Jessica Azulay lives in Syracuse, NY and is program director of Alliance for a Green Economy, a New York State based coalition working toward a nuclear-free and carbon-free New York.