Critics blast Cuomo's $7.6B subsidy for nuclear plants

Dec 8, 2016

A long-term energy plan by the Cuomo administration that includes a nearly $8 billion subsidy to two upstate nuclear power plants is being challenged from both ends of the political spectrum, and a lawsuit has been filed to try to stop the deal.


Gov. Andrew Cuomo’s Public Service Commission plans to convert 50 percent of the state’s power sources to renewable energy over the next decade and a half. A controversial part of that program includes a $7.6 billion state-financed subsidy to a company that now runs two New York nuclear power plants ­– Nine Mile Point in Oswego and Ginna near Rochester – and is taking over a third plant, FitzPatrick, also in Oswego.

That has angered environmental groups, who filed a lawsuit, saying the PSC “acted improperly when it mandated a massive subsidy to prop up New York’s aging, failing nuclear power plants as part of the State’s Clean Energy Standard.”

The James A. FitzPatrick nuclear plant in Oswego.
Credit www.entergy-nuclear.com

Other progressive-leaning groups, including the New York Public Interest Research Group, also object to the deal.

“In some ways, it’s a straight-up ratepayer issue,” said Blair Horner, NYPIRG’s legislative director.

He said the deal will result in $2.3 billion in increased payments for residential utility customers, and even more for businesses. That’s in a state that already has among the highest utility rates in the nation.

“Roughly 800,000 New Yorkers are already having a hard time paying their existing electric bills,” Horner said. “This isn’t going to make it any better.”

Not only left-leaning groups oppose the deal. Fossil fuel companies like Shell and BP have objected, filing complaints with the PSC. Oil and gas companies would have to essentially help subsidize the deal through the price of zero emission tax credits bought and sold in New York.

Phil Kerpen with the Washington, D.C.-based free market advocacy group American Commitment calls the plan an “expensive green fantasy.” He said no one should get public money – including wind and solar power.

“The idea that, ‘Well, other energy sources have subsidies, so our solution is to go raid the ratepayer for ourselves’ is the worst kind of solution.” Kerpen said. “It actually just replicates the problem.”

He said “actual economics” should drive which types of energy sources make sense.

Kerpen said he doesn’t find it odd, though, that groups on both the traditional left and the right are opposing the governor’s plan.

“We’re seeing a different fault line in a lot of the major political and policy fights that are happening in this country right now,” Kerpen said. “It’s becoming much less about right versus left and much more about insiders, cronies, special interests versus the people at large.”

He said people across the political spectrum simply believe it’s “wrong” for ratepayers to pay a surcharge to benefit one specific corporation.

Cuomo has argued that nuclear power is cleaner than fossil fuels and is a needed bridge fuel during a transition to wind, solar and other renewable energy sources. The decision also is partly about saving jobs, as Cuomo told power plant workers at the FitzPatrick nuclear plant in Oswego during a visit over the summer.

“There’d be 615 lost jobs, average wage $120,000,” Cuomo said on Aug. 9.

A spokesman for Cuomo calls the latest attempts to derail the energy plan through a lawsuit an “absurd publicity stunt.”