Clean Air Interstate Rule (CAIR) Allowance Trading Program Ends

Dear CAIR Designated Representatives and Authorized Account Representatives:

As you know, the Clean Air Interstate Rule (CAIR) trading programs ended after 2014. This e-mail is to inform you that EPA will remove all remaining CAIR NOx ozone season and NOx annual allowances from all allowance accounts on Wednesday, August 10^th, 2016. When the allowances are removed you will receive an e-mail confirmation report for your records.  After removal of these allowances, EPA will end account representative associations with CAIR for both compliance and general accounts in the CAMD Business System (CBS). A few items such as updating screens in the CBS will be finished later.

If you have any questions about these activities, please contact any of the following persons:

Paula Branch at (202) 343-9168 or branch.paula@epa.gov

Kenon Smith at (202) 343-9164 or smith.kenon@epa.gov
Robert Miller at (202) 343-9077 or miller.robertl@epa.gov

Janice Wagner, Chief
Market Operations Branch
Clean Air Markets Division

cc:

Alternate Designated Representatives

State Holding Account Primary Representatives

State Holding Account Alternate Representatives

Exelon Would Save FitzPatrick Nuclear Plant If State Okays Subsidies

Entergy aims to sell FitzPatrick nuclear plant by mid-August

Entergy Corp. has confirmed that it is negotiating to sell the FitzPatrick nuclear plant in Oswego County to Exelon Corp. Entergy said it will close the plant in January, as previously announced, if the sale cannot be completed.

Entergy said in a news release that it aims to complete the negotiations with Exelon by mid-August. The transaction depends on approval by the New York Public Service Commission of a new nuclear subsidy program that was proposed Friday as part of the state's clean energy standard.

The proposed nuclear subsidy program, estimated at $482 million a year split between FitzPatrick and three other nuclear reactors in Upstate New York, still faces review by the commission. The PSC scheduled a brief 10-day period for public comments on the proposal, which would allow the commission to consider it at its Aug. 1 meeting.

Entergy announced in November 2015 that it would close FitzPatrick in January 2017 because the plant loses money. Gov. Andrew Cuomo, whose administration helped facilitate the negotiations, issued a statement today applauding the developments.

A sale to Exelon would require regulatory approval by the U.S. Nuclear Regulatory Commission and others before it could be finalized.That process is likely to take nine months to a year, company officials said.  Entergy said it will begin preparations for both of the plant's possible futures -- a shutdown, or continued operation and sale. (Syracuse .com, 7/13/2016)

Subsidies For New York Nuclear Power Plants?

State utility regulators today released a proposal to subsidize Upstate nuclear plants with annual payments totaling an estimated $482 million a year. The public has a brief opportunity to comment -- until July 18 – an indication that the PSC is likely to rule on the proposal at its Aug. 1 meeting.

Note: Only Nine Mile Point and Ginna have one cooling tower each.

Exelon Corp., which owns three of the four Upstate nuclear reactors, recently told the commission that the oldest two facilities might close unless subsidies were approved by September.  The proposal unveiled recommends that the PSC sign 12-year agreements with nuclear operators, as Exelon had previously recommended. The subsidies would be set administratively by the PSC.

According to estimates provided in the proposal, the subsidies would start at $17.48 per megawatt-hour for the first two years and rise gradually to $29.15 per MWH in years 11 and 12. At the expected combined output of 27.6 million MWH for the Upstate nukes, the total cost would be up to $482 million a year during the first two years, rising to $805 million per year for the final two years.

Those estimates appear to anticipate the continued operation of the FitzPatrick plant, which is scheduled to close in January 2017. FitzPatrick typically accounts for more than 20 percent of the Upstate nuclear output. The subsidies are based on wholesale electric prices of about $39 per MWH. If future prices rise above that level, as the PSC staff expects, the subsidies will decrease commensurately.

The PSC staff argues that the cost, which would be borne by utility ratepayers, would be dwarfed by the benefits of preserving reliable sources of carbon-free electricity. The staff proposal estimates that continued operation of the nuclear plants provides benefits of at least $2.5 billion a year, including the societal benefit of preventing additional carbon emissions plus other positive impacts such as jobs and property tax payments provided by the nukes.

Nuclear operators have complained that wholesale electric prices are too low in Upstate New York to sustain the cost of operating nuclear plants. Entergy Corp. announced last fall that it would close the 850-megawatt FitzPatrick plant in Scriba in January 2017. Exelon told the PSC last month that the 620-megawatt Nine Mile 1 reactor in Scriba and the 580-MW Ginna nuclear plant in Wayne County might close next year too unless subsidies are approved soon. Nine Mile 1 is scheduled to be refueled next spring, a $55 million expense Exelon might forego if the plant is still losing money, company officials said.

According to a study by The Brattle Group, paid for by Exelon and Upstate Energy Jobs, the four nuclear power reactors in Upstate New York are responsible for $3 billion in economic activity and nearly 25,000 jobs.  (Syracuse. com, 7/8/2016)

Low Gasoline Prices At The Pump

The national average for gasoline is $2.29 a gallon. That’s 48 cents cheaper than last year on the same date and 4 cents cheaper than a month ago. Throughout 2016, prices nationally averaged $2.07, compared with $2.43 in 2015, $3.36 in 2014 and $3.50 in 2013.

The drop in price is a reflection of the huge worldwide surplus in crude oil. Production in the United States has jumped as companies used a process called fracking and horizontal drilling to extract oil from shale, while Iran saw its exports soar with the lifting of economic sanctions after it agreed to reign in its nuclear program. Iran’s reentry into the global market came as Saudi Arabia and other Persian Gulf region players continued to pump freely as well.

Crude is about $48 per barrel right now.  

Low gas prices ranged this week from $1.99 a gallon in South Carolina up to $2.90 in California.

Gas prices tend to be higher in the Washington area than the nation as a whole. Within the District, the average on Wednesday was $2.54 a gallon, according to GasBuddy.com, a website that tracks gas prices at 130,000 stations in the United States and Canada. Just over the D.C. border in Bethesda, prices topped $3. Prices were hovering around $2.40 in Silver Spring and $2.30 in Tysons Corner. Gas in Manassas is averaging above $2 and around $2.20 in Annapolis. It’s below $2 a gallon in Virginia Beach.  (Wash Post, 6/30/2016)