PSC-37-16-00009-P Transfer of the James A. FitzPatrick Nuclear Power Plant from Entergy Nuclear FitzPatrick, LLC to Exelon Generation Company, LLC

9/14/16 N.Y. St. Reg. PSC-37-16-00009-P

NEW YORK STATE REGISTER

VOLUME XXXVIII, ISSUE 37

September 14, 2016

RULE MAKING ACTIVITIES

PUBLIC SERVICE COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PSC-37-16-00009-P

Transfer of the James A. FitzPatrick Nuclear Power Plant from Entergy Nuclear FitzPatrick, LLC to Exelon Generation Company, LLC

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

The Commission is considering a joint petition by Entergy Nuclear FitzPatrick, LLC and Exelon Generation Company, LLC for approval of the transfer of the James A. FitzPatrick Nuclear Power Plant.

Statutory authority:

Public Service Law, section 70

Subject:

Transfer of the James A. FitzPatrick Nuclear Power Plant from Entergy Nuclear FitzPatrick, LLC to Exelon Generation Company, LLC.

Purpose:

To ensure safe and adequate electric generation facilities.

Substance of proposed rule:

The Public Service Commission (Commission) is considering the joint petition of Entergy Nuclear FitzPatrick, LLC (Entergy) and Exelon Generation Company, LLC (Exelon) for authority to transfer from Entergy to Exelon the James A. FitzPatrick Nuclear Power Plant (FitzPatrick Facility) and related assets. Petitioners also request that the Commission declare that the lightened regulatory regime approved for the owner and operator of the FitzPatrick Facility will continue unchanged as applied to Exelon after the transfer. Petitioners also request that the Commission take action and issue an order on the joint petition no later than November 18, 2016.

Entergy owns the FitzPatrick Facility, a boiling water nuclear reactor located in Scriba, New York in Oswego County with a generating capacity of approximately 882 MW. The FitzPatrick Facility began operations in 1975 and its current Nuclear Regulatory Commission (NRC) operating license expires in 2034. The FitzPatrick Facility is a lightly regulated merchant generating facility that sells energy, capacity, and ancillary services in the wholesale markets administered by the New York Independent System Operator, Inc. and through bilateral contracts.

Under the terms of the Asset Purchase Agreement (APA) between Exelon and Entergy, Exelon will acquire Entergy’s right, title, and interest in and to the FitzPatrick Facility and related assets. This will include, but will not be limited to, (1) real property, buildings, and improvements; (2) all machinery and equipment; (3) all transferrable permits; (4) all spent nuclear fuel, waste, source and byproduct material, and inventory; and (5) all books and records relating to the FitzPatrick Facility.

The APA also addresses decommissioning the FitzPatrick Facility, including provisions that detail the transfer of decommissioning funds to Exelon. Upon closing, Exelon will assume the decommissioning obligations for the FitzPatrick Facility. Exelon will be obligated to meet the Nuclear Regulatory Commission’s minimum funding assurance requirements once it becomes the licensed owner and operator of the FitzPatrick Facility. In addition, prior to closing the proposed transaction, Exelon will offer employment to substantially all of the Entergy employees at the FitzPatrick Facility.

Entergy is a party to two interconnection agreements: (1) an Interconnection and Operation Agreement, dated March 28, 2000, between Entergy and the Power Authority of the State of New York; and (2) a Large Generator Interconnection Agreement between Entergy and Niagara Mohawk Corporation (d/b/a National Grid). Closing the transaction will include, among other things, assignment of these interconnection agreements to Exelon.

Pursuant to Section 70 of the Public Service Law, no electric corporation shall transfer or lease its works or system or any part thereof to any other person or corporation or contract for the operation of its works and system, without the written consent of the Commission. Among other things, the Commission may consider whether (a) the proposed transfer, lease or contract for the operation of the works or system is in the public interest; (b) the proposed transfer or contract for the operation will result in a concentration of wholesale generation ownership that may enable the excise of horizontal market power; (c) the purchasing entity is affiliated with entities that own or control traditional public utilities, electric transmission facilities, or fuel inputs into generation that operates in markets affecting New York or that otherwise have the ability to impose prices on captive ratepayers; (d) the transferee is financially sound; and (e) the assets being transferred or subject to contract for operation will be safely operated following the transaction.

A “lightened regulatory regime” is a concept that the owners and operators of wholesale generation facilities that do not make retail sales to consumers may be more lightly regulated than traditional monopoly electric utilities that serve retail consumers and may also own or operate electric generation facilities. Lightened regulations does not relieve a wholesale generator of regulatory oversight regarding enforcement, investigation, safety, reliability, system improvement, among other matters. In addition, nuclear generation facilities are subject to certain regulatory requirements that are not applied to non-nuclear wholesale generators.

The Commission may adopt, reject, or modify, in whole or in part, the relief proposed and may address and resolve other matters related to the issues raised in the petition.

Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website http://www.dps.ny.gov/f96dir.htm. For questions, contact:

John Pitucci, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Katheen H. Burgess, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(16-E-0472SP1)