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Responding to a statewide trend, Rochester Gas and Electric Corp. is exploring the sale of its Robert E. Ginna nuclear power plant in Ontario, Wayne County.
The 490-megawatt plant, which opened in 1970, supplies about half the electricity used by RG&E customers. RG&E has an application pending with the Nuclear Regulatory Commission to extend the plant’s license until 2029.
RG&E says it is looking into the sale to comply with a state policy encouraging utilities to sell their generating facilities and concentrate instead on delivering power, with a goal of making prices more competitive.
In a statement, RG&E said that it is “the only utility in New York state that has not implemented the state policy on utility-owned generation.”
Fifteen of the nation’s 103 nuclear plants have been sold since 1999, including five in New York. Ginna is the only nuclear plant in New York that hasn’t changed ownership.
Dick Marion, spokesman for RG&E, declined further comment.
David Flanagan, spokesman for the state Public Service Commission, said it’s too early to say what effect Ginna’s sale would have on RG&E customers. RG&E could meet customers’ needs by entering into contracts to purchase electricity from the company that buys Ginna, he said.
Flanagan said RG&E has not taken the first step of filing with the PSC, which would have to approve any sale along with the Nuclear Regulatory Commission.
“We do our review to ensure that the company to whom the license is transferred has the financial and technical ability to safely operate the plant,” said Diane Screnci, NRC spokeswoman.
The divestiture policy is followed by RG&E parent company Energy East Corp., which derives most of it earnings and cash flow from delivering, rather than generating and selling power.
RG&E, which stated its willingness to sell generation plants in a rate filing with the PSC in May, also operates Russell Station, a 250-megawatt coal-fired plant on Lake Ontario in Greece.
“RG&E will develop protocols and explore the feasibility of a generation divestiture ... that would transform RG&E into a delivery company by mid-2004,” the filing said.
In 1996, New York state began to encourage utility companies to sell their hydroelectric and fossil-fuel-burning generating plants.
“The (Public Service) commission felt that divestiture would help promote a more competitive market on the wholesale side,” Flanagan said. “It opens up the generation portion of the business to competition with more market participants competing against one another to sell power.”
A market for nuclear plants followed.
“As we went along, that market developed,” Flanagan said. “We had concrete offers coming in and some real interest in nuclear plants in New York state.”
The commission was able to reach generation divestiture agreements as part of rate negotiations.
RG&E agreed to sell its 14 percent share in the Nine Mile Point 2 reactor to Constellation Nuclear Group. And in October 2001, the PSC approved the sale of Nine Mile 1 and Nine Mile 2 to Constellation for $780 million.
“New York state is still a very attractive market and the generation assets in New York state are attractive assets,” Flanagan said.
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