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NY nuclear subsidy may survive as budget fight drags on past deadline

Legislative efforts to limit New York state's nuclear subsidy are in jeopardy as lawmakers continue to hash out a budget three days past both the intended start date of those payments and a deadline to pass a budget for the upcoming fiscal year.

Amidst breakdowns of budget talks, ongoing deal haggling and calls by Gov. Andrew Cuomo to pass emergency budget extenders, Exelon Corp. will come out ahead if a budget proposal provision to stop a nuclear subsidy is cut from the final passed version. The state legislature was originally scheduled to go on a two-week break starting April 6.

"Things seem to be changing by the minute so we now think we maybe on the verge of something," said Assemblyman Jeffrey Dinowitz, D., in an interview. The Bronx representative and chairman of the Assembly Committee on Corporations, Authorities, and Commissions led a group of leading Democrats that on March 22 inserted a provision into a budget proposal to block the governor's zero-emissions credit, or ZEC, program for three "at-risk" upstate nuclear plants owned by Exelon until state regulatory officials testify before a public hearing.

As part of Cuomo's larger clean energy standard to boost renewables and reduce greenhouse gas emissions 40% by 2030, the ZEC program was approved by the PSC in August 2016 as a means of safeguarding those emissions cuts. Downstate lawmakers like Dinowitz view the upstate nuclear subsidy as a "tax" that burdens the more energy-intensive consumers of the greater New York City area. They are also aggrieved that PSC officials did not testify before a recent joint committee hearing.

Dinowitz said the desired questioning of regulatory officials has nothing to do with keeping the plants open and determining the needs of Exelon and the subsidy payments, which could be as high as $7.6 billion over 12 years.

"The public has a right to know," Dinowitz said. "How much of the money that's going to go to Exelon is going to keep the plants open versus how much of it is going to be pure profit because this money is probably the biggest subsidy to a single corporation in the history of the state of New York."

The ZEC moratorium provision might be scrapped but Dinowitz said lawmakers like himself will continue to raise the subject.

"We want to hear from some top officials at the PSC as to how they determine the methodology used to figure out these subsidies, how they came up with those numbers and what the financials of Exelon Corp. that would justify those numbers; and how they determined that downstate should pay for most of the costs of these subsidies," Dinowitz concluded.