Exelon agrees to acquire Entergy’s FitzPatrick nuclear-power plant for $110 million, preserving more than 600 jobs at plant

SCRIBA, N.Y. — Exelon Generation (NYSE: EXC) has agreed to assume ownership and management of operations of Entergy Corp.’s (NYSE: ETR) James A. FitzPatrick nuclear-power plant in Scriba.

The agreement to continue operation of the plant will save about 600 jobs, the office of Gov. Andrew Cuomo said in a news release issued Tuesday morning.

Under the deal totaling $110 million, New Orleans, Louisiana–based Entergy would transfer FitzPatrick’s operating license to Chicago, Illinois–based Exelon, according to a joint news release that Entergy issued Tuesday. Exelon describes itself as the “owner of the nation’s largest nuclear fleet.”

The New York Power Authority (NYPA) has agreed to transfer the decommissioning trust fund and liability for FitzPatrick to Entergy. Entergy would then transfer the fund and associated liability to Exelon, if regulatory approvals are obtained and the transaction closes.

Transaction closure is dependent upon regulatory review and approval by state and federal agencies, including the U.S. Department of Justice; the Nuclear Regulatory Commission; the Federal Energy Regulatory Commission; and the New York State Public Service Commission (PSC).

The companies expect the transaction to close in the second quarter of 2017.

The firms credited Gov. Andrew Cuomo with helping to facilitate the transaction. Cuomo had asked the PSC to adopt a clean-energy standard, which will provide hundreds of millions of dollars in subsidies, funded by utility customers, to help keep nuclear-power plants open in upstate New York.

Clean-energy standard
The PSC on Aug. 1 approved New York’s clean-energy standard (CES), a decision that the IBEW contended would save more than 600 jobs at the FitzPatrick nuclear-power plant.

New Orleans, Louisiana–based Entergy Corp., which owns the FitzPatrick nuclear-power plant, on July 13 announced that it was in discussions with Exelon for the potential sale of the FitzPatrick nuclear-power plant.

Entergy on Nov. 2, 2015 announced plans to close and decommission the plant.

Chicago, Illinois–based Exelon operates the Nine Mile Point nuclear-power station, which is also located in Scriba.

The July 13 Entergy news release included a quote from Bill Mohl, president of Entergy wholesale commodities, who indicated “we are working with Exelon to come to commercial terms on a sale transaction that depends largely on the final terms and timeliness of the New York State Clean Energy Standard.”

The clean-energy standard provides “bridge support” to Upstate nuclear-power plants to “ensure that critical progress on greenhouse-gas emissions reductions is sustained” as the state works toward achieving its goal to generate 50 percent of New York’s electricity from renewable-energy sources like wind and solar by 2030, according to Cuomo’s office.

Maintaining zero-emission nuclear power is a “critical element” to achieving New York’s ambitious climate goals, Cuomo’s office added.

The CES, which the PSC approved last week, will also “spur hundreds of millions of dollars in short-term investments” in energy infrastructure in upstate New York, both Entergy and Exelon contend.

Without the CES, upstate nuclear plants “would have been at risk of closure,” the firms added.

Cuomo, IBEW reaction
Cuomo announced the pending sale at a Tuesday morning rally in support of the FitzPatrick Plant in Oswego County.

“Saving FitzPatrick is an enormous win for Central New York and the entire state, preserving hundreds of jobs and maintaining a reliable, carbon-free power source for New Yorkers,” Cuomo said in the release his office issued. “FitzPatrick’s continued operation is essential both to the regional economy and our nation-leading efforts to power the state with 50 percent renewable energy by 2030.”

The FitzPatrick nuclear-power plant has helped shape Oswego’s middle class by offering well-paying, high-skilled jobs and “providing a ladder of opportunity” for all New Yorkers, Ted Skerpon, president and chair of the IBEW Local 97 Utility Labor Council, said in Cuomo’s release. IBEW is short for International Brotherhood of Electrical Workers, which represents workers at the FitzPatrick and other upstate New York nuclear-power plants.

Contact Reinhardt at ereinhardt@cnybj.com