Rochester Gas & Electric filed with the New York State Public Service Commission on Nov. 10 a heavily-redacted copy of an Oct. 27 report on what it is doing, and plans to do, in case the Ginna nuclear plant of Exelon (NYSE: EXC) is retired later this decade.
Since last year, Exelon has been working at the New York PSC and the Federal Energy Regulatory Commission (FERC) to extend the life of Ginna, which the company says is not economic to operate in the current power market following the expiration last year of a long-term contract to supply power to Rochester Gas & Electric (RG&E). The R.E. Ginna Nuclear Power Plant is located in Ontario, New York, and consists of one pressurized water reactor unit with a capacity of 581 MW. RG&E is the interconnecting transmission owner.
In January 2014, Ginna communicated to the New York ISO and RG&E its intent to potentially retire the plant due to insufficient revenues. The NYISO and RG&E then conducted a reliability study which determined that retirement of this unit would result in bulk transmission system and non-bulk local distribution system reliability violations.
RG&E said in the Oct. 27 report that it is working with the New York ISO on ways to mitigate the potential retirement of Ginna. It said that for one thing, the transformers of Station 122 would be overloaded whenever the RG&E peak load reaches 1,430 MW during System Normal and post-contingency conditions without Ginna in service. At an RG&E area load of 1,430 MW, two of the transformers at Station 122 are loaded to 100% of Normal rating.
The following projects are required in service to solve reliability problems caused by the retirement of Ginna. This work is combined as the Ginna Retirement Transmission Alternative (GRTA):
- Station 122 345kV reconfiguration and transformer replacements;
- three new transformers with Normal LTE/STE rating 494/603/630 MVA;
- 345 kV bus reconfiguration to breaker-and-a-half scheme;
- 115 kV bus reconfiguration to GIS breaker-and-a-half scheme; and
- Upgrade 34.5-kV circuits 718, 735, 770 and 11.5-kV circuit 623.
"Resolving the thermal overloads at Station 122 becomes the most pressing issue for RG&E because all other pending projects do not resolve the overloads during peak conditions," the report noted. "The upgrade of Station 122 transformers will be done in combination with a reconfiguration of the station from the ring bus to breaker-and-a-half arrangement. The Station 122 reconfiguration ensures that only one bulk transformer can be lost in a single contingency."
The upgrade of the 34.5-kV and 11.5-kV circuits enables the RG&E network to transfer power from Station 80 to Station 122, and vice versa, which allows the reduction or elimination of thermal overloads under normal and contingency conditions. Additionally, resolving stuck breaker problems at Station 80 ensures that only one bulk transformer is lost in a single contingency.
The RG&E report concluded: "This updated report has demonstrated that GRTA will solve the violations which would be caused by the retirement of Ginna. The components will be placed in service in a specific sequence. Any needs arising from a delay in the completion of the components would be met with operational protocols and other measures."
Said Exelon's Oct. 30 quarterly Form 10-Q statement about the situation: "A formal study conducted by the ISO-NY and RG&E concluded that the Ginna nuclear plant needs to remain in operation to maintain the reliability of the transmission grid in the Rochester region through 2018 when planned transmission system upgrades are expected to be completed. In November 2014, in response to a petition filed by Ginna, the NYPSC directed Ginna and RG&E to negotiate a Reliability Support Services Agreement (RSSA). On February 13, 2015, regulatory filings, including RSSA terms negotiated between Ginna and RG&E, to support the continued operation of Ginna for reliability purposes were made with the NYPSC and with FERC for their approval.
"Although the RSSA contract is still subject to regulatory approvals, on April 1, 2015, Ginna began delivering power and capacity into ISO-NY consistent with the provisions of the proposed RSSA contract. In the event that Ginna continues to operate beyond the RSSA term, Ginna would be required to make a specified refund payment to RG&E.
"The FERC issued an order on April 14, 2015, directing Ginna to make a compliance filing to ensure that the RSSA does not allow Ginna to receive revenues above its full cost-of-service and rejecting any extension of the RSSA beyond its initial term, rather requiring any extension be subject to the rules currently being developed by ISO-NY. The FERC order also set the RSSA for hearing and settlement procedures. In response to the FERC’s April 14, 2015 order, on May 14, 2015, Ginna submitted a compliance filing to FERC containing proposed revisions to the RSSA addressing FERC’s requirements and maintaining the April 1, 2015 proposed effective date.
"On July 13, 2015, FERC accepted Ginna’s compliance filing effective April 1, 2015. The FERC accepted Ginna’s proposal for market revenue sharing subject to a cap effective April 1, 2015, and rejected requests for rehearing by parties on a number of matters related to jurisdiction, the reliability need, RSSA term, and possible price suppression. In late August, Ginna reached a settlement in principle with interested parties modifying certain terms and conditions in the originally negotiated agreement. The proposed RSSA under the settlement preserves the value of the contract originally negotiated with RG&E, but shortens the term to March 31, 2017 and requires RG&E to complete a new transmission reliability study to determine if an interim reliability solution is required beyond March 31, 2017. The reliability study is expected to be completed by the end of 2015.
"If there continues to be a reliability need beyond March 31, 2017, RG&E has the right until June 30, 2016 to select Ginna as an ongoing reliability solution. If Ginna is not selected for continued reliability service and does not plan to retire shortly after RSSA expiration, Ginna is required to file a notice with the NYPSC no later than September 30, 2016. The settlement was filed at the NYPSC and at FERC on October 21, 2015 and remains subject to review and approval by both agencies, which do not expect to be completed until the first quarter of 2016."
Exelon has said it hopes that the RSSA will get the plant through the next couple of years, and that at that point a potentially stronger power market will allow it to continue to operate.