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Bloomberg's Konolige on NY Approving Nuclear Subsidies (Audio) · Bloomberg Intelligence

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  Speaker 1: and Prim Fox on Bloomberg Radio. New York State has
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  Speaker 1: proved a plan to generate half of the state's power
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  Speaker 1: from renewable source sources by the year twenty thirty. They
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  Speaker 1: joined California and setting one of the most ambitious clean
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  Speaker 1: energy goals in the nation. And in addition, the plan
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  Speaker 1: includes billions of dollars in subsidies to keep upstate nuclear
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  Speaker 1: plants operational while the use of solar and wind energy
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  Speaker 1: ramps up. Here to tell us more is Kit Connelledge.
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  Speaker 1: He is senior Industrials and Utilities analysts for Bloomberg Intelligence,
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  Speaker 1: that affect businesses. Our terminal customers can access this function
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  Speaker 1: at b I go. Kit thanks very much for coming
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  Speaker 1: into the studio. Tell us about this plan that has
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  Speaker 1: passed the New York State Public Service Commission sure UM.
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  Speaker 1: The idea is to subsidize three nuclear plants upstate. They're
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  Speaker 1: along Lake Erie. UH, they've been losing money. Um. Nuclear
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  Speaker 1: is a zero emissions source of power. UH. It also
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  Speaker 1: provides a lot of jobs and a lot of tax
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  Speaker 1: taxes for the local communities. So those are all important
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  Speaker 1: factors and why Governor Cuomo UH and the members of
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  Speaker 1: the Public Service Commission and unions in the area all
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  Speaker 1: supported giving subsidies to the nuclear plants. So with zero missions,
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  Speaker 1: with these very important link to communities and jobs, what
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  Speaker 1: has been the problem for nuclear power and power plants
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  Speaker 1: and upraim seems to me that a lot of government
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  Speaker 1: policies have been against nuclear because they're worried about the
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  Speaker 1: possibility of a meltdown. They're worried about in of course,
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  Speaker 1: and that not in my backyard, etcetera. So it's nice
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  Speaker 1: that York State is turning it around, But hasn't that
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  Speaker 1: been the problem for nuclear? Yeah? Absolutely, it's Uh, it's
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  Speaker 1: certainly the problem for building a new nuclear plant. That's
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  Speaker 1: not going to happen in too many places, although it's
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  Speaker 1: happening in Georgia and South Carolina. Um. Also, it's very
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  Speaker 1: expensive to build a new one for the existing plants.
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  Speaker 1: I think we still see a very significant anti nuclear
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  Speaker 1: um presence out there, people who are just you know,
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  Speaker 1: don't like the idea of nuclear plants. They have had
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  Speaker 1: some problems, some issues. You can debate how serious they were, etcetera.
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  Speaker 1: But clearly, for example, the state of California decided that, uh,
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  Speaker 1: within the next eight years, they would close the last
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  Speaker 1: remaining power plant in California and basically pay off the
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  Speaker 1: shareholders of p G and E who owns that Diablo
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  Speaker 1: Canyon plant, uh, and just say, Okay, that's the end
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  Speaker 1: of nuclear in California. We're going all solar and wind.
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  Speaker 1: How much is this gonna cost rape pairs? Uh? In
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  Speaker 1: New York it looks like about two percent. Uh, it's
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  Speaker 1: about five dred million dollars a year additional payments. That's
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  Speaker 1: obviously spread out over a lot of electric bills, millions
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  Speaker 1: of electric bills. UH. It didn't get highlighted because nobody
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  Speaker 1: has an interest in highlight at the nuclear plant owners
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  Speaker 1: are happy to have higher profit margins. UH. Governor Cuomo
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  Speaker 1: and the Public Service Commission are happy to have a
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  Speaker 1: zero emission source and happy to have the unions supporting them.
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  Speaker 1: So nobody's going around saying this is really costing your money,
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  Speaker 1: but it will raise bills by two percent. Some people
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  Speaker 1: may say that's perfectly well worth it. Well, your excellent
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  Speaker 1: work on the your North America Dashboard for bluebrig Intelligence
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  Speaker 1: Electric Utilities. Looking at this whole there, there's a great
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  Speaker 1: note of political melodrama in here, though, because you point
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  Speaker 1: out that Excellent and Entergy will perhaps get the first
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  Speaker 1: nuclear subsidies, but you also point out that Calpine and
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  Speaker 1: dyning Gy aren't done finding this nuclear aid. Tell us
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  Speaker 1: about that part of the now. Absolutely, I think there's
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  Speaker 1: in in other states. When, for example, the state of
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  Speaker 1: Ohio tried to subsidize h one nuclear plant and some
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  Speaker 1: coal plants because they were losing money. UH, they were
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  Speaker 1: overturned by the federal authorities who who ran the UH
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  Speaker 1: merchant power grid UH the PGM grid. So I think
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  Speaker 1: that we're gonna see the UH the merchant power gas
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  Speaker 1: and they don't have metch Cole in New York, but
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  Speaker 1: the gas plants in New York are gonna be fighting
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  Speaker 1: against the subsidy because if if you didn't have the subsidy,
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  Speaker 1: the gas plants would be operating in a market with
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  Speaker 1: no nuclear plants upstate, and they expect to get higher prices.
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  Speaker 1: So they're saying, hey, wait a minute. You know, since
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  Speaker 1: when do they get subsidized and we don't get subsidized.
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  Speaker 1: It was supposed to be an open market. This is
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  Speaker 1: a new rule. Now I understand that the three upstate
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  Speaker 1: plants that are going to participate, this is what Gina
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  Speaker 1: near Rochester UH, plus the James A. Fitzpatrick and the
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  Speaker 1: nine mile Point facilities. Those are all north of Syracuse.
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  Speaker 1: Excellent wants to buy the fitz Fitzpatrick plant from Energy. Correct, Yeah,
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  Speaker 1: that's correct. The Entergy wants to get out this merchant business.
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  Speaker 1: They've had enough of it. It's a very volatile business
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  Speaker 1: and utilities, as you know, are very risk averse company
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  Speaker 1: owned Indian Point and that's not eligible for at least
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  Speaker 1: like two years. Well, that's right. They they they're sort
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  Speaker 1: of stuck with Indian Point. They'd rather not own it,
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  Speaker 1: but they feel like it's worth a couple of billion dollars.
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  Speaker 1: So until they get paid, they're they're not shutting it down.
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  Speaker 1: But if Excellent wants to buy this from them, and
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  Speaker 1: Excellent is very committed to the nuclear merchant business and
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  Speaker 1: if they're getting higher margins, they're happy to buy it potentially. Well,
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  Speaker 1: we're very happy it had you on the show today.
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  Speaker 1: Kit Connellege, senior industry analysts for Bloomberg in Intelligence, Electric utilities,
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  Speaker 1: Nuclear subsidies coming to New York State. This is Bloomberg.
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