WEBVTT - Bloomberg's Konolige on NY Approving Nuclear Subsidies (Audio)

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<v Speaker 1>Bloomberg business slash. This is taking stock with Gableen Hayes

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<v Speaker 1>and Prim Fox on Bloomberg Radio. New York State has

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<v Speaker 1>proved a plan to generate half of the state's power

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<v Speaker 1>from renewable source sources by the year twenty thirty. They

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<v Speaker 1>joined California and setting one of the most ambitious clean

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<v Speaker 1>energy goals in the nation. And in addition, the plan

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<v Speaker 1>includes billions of dollars in subsidies to keep upstate nuclear

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<v Speaker 1>plants operational while the use of solar and wind energy

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<v Speaker 1>ramps up. Here to tell us more is Kit Connelledge.

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<v Speaker 1>He is senior Industrials and Utilities analysts for Bloomberg Intelligence,

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<v Speaker 1>providing unique in real time research and context on a

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<v Speaker 1>variety of industries as well as markets and government factors

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<v Speaker 1>that affect businesses. Our terminal customers can access this function

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<v Speaker 1>at b I go. Kit thanks very much for coming

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<v Speaker 1>into the studio. Tell us about this plan that has

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<v Speaker 1>passed the New York State Public Service Commission sure UM.

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<v Speaker 1>The idea is to subsidize three nuclear plants upstate. They're

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<v Speaker 1>along Lake Erie. UH, they've been losing money. Um. Nuclear

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<v Speaker 1>is a zero emissions source of power. UH. It also

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<v Speaker 1>provides a lot of jobs and a lot of tax

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<v Speaker 1>taxes for the local communities. So those are all important

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<v Speaker 1>factors and why Governor Cuomo UH and the members of

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<v Speaker 1>the Public Service Commission and unions in the area all

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<v Speaker 1>supported giving subsidies to the nuclear plants. So with zero missions,

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<v Speaker 1>with these very important link to communities and jobs, what

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<v Speaker 1>has been the problem for nuclear power and power plants

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<v Speaker 1>and upraim seems to me that a lot of government

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<v Speaker 1>policies have been against nuclear because they're worried about the

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<v Speaker 1>possibility of a meltdown. They're worried about in of course,

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<v Speaker 1>and that not in my backyard, etcetera. So it's nice

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<v Speaker 1>that York State is turning it around, But hasn't that

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<v Speaker 1>been the problem for nuclear? Yeah? Absolutely, it's Uh, it's

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<v Speaker 1>certainly the problem for building a new nuclear plant. That's

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<v Speaker 1>not going to happen in too many places, although it's

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<v Speaker 1>happening in Georgia and South Carolina. Um. Also, it's very

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<v Speaker 1>expensive to build a new one for the existing plants.

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<v Speaker 1>I think we still see a very significant anti nuclear

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<v Speaker 1>um presence out there, people who are just you know,

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<v Speaker 1>don't like the idea of nuclear plants. They have had

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<v Speaker 1>some problems, some issues. You can debate how serious they were, etcetera.

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<v Speaker 1>But clearly, for example, the state of California decided that, uh,

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<v Speaker 1>within the next eight years, they would close the last

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<v Speaker 1>remaining power plant in California and basically pay off the

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<v Speaker 1>shareholders of p G and E who owns that Diablo

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<v Speaker 1>Canyon plant, uh, and just say, Okay, that's the end

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<v Speaker 1>of nuclear in California. We're going all solar and wind.

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<v Speaker 1>How much is this gonna cost rape pairs? Uh? In

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<v Speaker 1>New York it looks like about two percent. Uh, it's

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<v Speaker 1>about five dred million dollars a year additional payments. That's

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<v Speaker 1>obviously spread out over a lot of electric bills, millions

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<v Speaker 1>of electric bills. UH. It didn't get highlighted because nobody

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<v Speaker 1>has an interest in highlight at the nuclear plant owners

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<v Speaker 1>are happy to have higher profit margins. UH. Governor Cuomo

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<v Speaker 1>and the Public Service Commission are happy to have a

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<v Speaker 1>zero emission source and happy to have the unions supporting them.

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<v Speaker 1>So nobody's going around saying this is really costing your money,

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<v Speaker 1>but it will raise bills by two percent. Some people

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<v Speaker 1>may say that's perfectly well worth it. Well, your excellent

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<v Speaker 1>work on the your North America Dashboard for bluebrig Intelligence

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<v Speaker 1>Electric Utilities. Looking at this whole there, there's a great

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<v Speaker 1>note of political melodrama in here, though, because you point

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<v Speaker 1>out that Excellent and Entergy will perhaps get the first

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<v Speaker 1>nuclear subsidies, but you also point out that Calpine and

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<v Speaker 1>dyning Gy aren't done finding this nuclear aid. Tell us

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<v Speaker 1>about that part of the now. Absolutely, I think there's

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<v Speaker 1>in in other states. When, for example, the state of

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<v Speaker 1>Ohio tried to subsidize h one nuclear plant and some

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<v Speaker 1>coal plants because they were losing money. UH, they were

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<v Speaker 1>overturned by the federal authorities who who ran the UH

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<v Speaker 1>merchant power grid UH the PGM grid. So I think

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<v Speaker 1>that we're gonna see the UH the merchant power gas

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<v Speaker 1>and they don't have metch Cole in New York, but

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<v Speaker 1>the gas plants in New York are gonna be fighting

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<v Speaker 1>against the subsidy because if if you didn't have the subsidy,

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<v Speaker 1>the gas plants would be operating in a market with

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<v Speaker 1>no nuclear plants upstate, and they expect to get higher prices.

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<v Speaker 1>So they're saying, hey, wait a minute. You know, since

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<v Speaker 1>when do they get subsidized and we don't get subsidized.

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<v Speaker 1>It was supposed to be an open market. This is

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<v Speaker 1>a new rule. Now I understand that the three upstate

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<v Speaker 1>plants that are going to participate, this is what Gina

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<v Speaker 1>near Rochester UH, plus the James A. Fitzpatrick and the

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<v Speaker 1>nine mile Point facilities. Those are all north of Syracuse.

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<v Speaker 1>Excellent wants to buy the fitz Fitzpatrick plant from Energy. Correct, Yeah,

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<v Speaker 1>that's correct. The Entergy wants to get out this merchant business.

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<v Speaker 1>They've had enough of it. It's a very volatile business

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<v Speaker 1>and utilities, as you know, are very risk averse company

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<v Speaker 1>owned Indian Point and that's not eligible for at least

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<v Speaker 1>like two years. Well, that's right. They they they're sort

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<v Speaker 1>of stuck with Indian Point. They'd rather not own it,

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<v Speaker 1>but they feel like it's worth a couple of billion dollars.

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<v Speaker 1>So until they get paid, they're they're not shutting it down.

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<v Speaker 1>But if Excellent wants to buy this from them, and

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<v Speaker 1>Excellent is very committed to the nuclear merchant business and

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<v Speaker 1>if they're getting higher margins, they're happy to buy it potentially. Well,

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<v Speaker 1>we're very happy it had you on the show today.

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<v Speaker 1>Kit Connellege, senior industry analysts for Bloomberg in Intelligence, Electric utilities,

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<v Speaker 1>Nuclear subsidies coming to New York State. This is Bloomberg.

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