Fee to subsidize nuclear plants in effect

Utilities across the state on April 1 begin collecting billions of dollars from ratepayers to subsidize three upstate nuclear plants, including one partly owned by LIPA, as part of Gov. Andrew M. Cuomo’s energy strategy.

LIPA is not regulated by the Public Service Commission, and it didn’t have to pay the assessment but agreed to do so voluntarily. LIPA trustees approved the plan at the state’s request last year after the state strategy was approved by the Public Service Commission.

While the new charge will increase the power supply portion of bills by $1.85 a month for average residential customers, lower natural gas prices this month will more than offset the new charge, PSEG Long Island said. Accordingly, bills actually decline slightly next month. April’s power supply charge will be 9.17 cents, compared with 9.19 cents in March.

“Even as the policy for the zero emissions credit goes into effect April 1, our customers will not see any increase in the monthly power supply charge,” said PSEG spokesman Jeff Weir. Had the charge not been assessed beginning in April, he acknowledged, customer bills would have been slightly lower.

PSEG power supply charges have declined about 15 percent so far this year after increasing 45 percent between December and January, primarily because of charges that were shifted within customer bills.

Buying zero-emission credits from the nuclear plants will cost LIPA $65 million a year. The amount is partially offset by $20 million LIPA will receive for its 18 percent ownership stake in one of them, Nine Mile Point Two.

The PSC in a statement acknowledged that LIPA, along with the New York Power Authority, agreed to pay the costs voluntarily. Con Ed’s New York City customers, who use less than half the electricity of the average Long Island household, will see bills increase by about $1 a month, a spokesman said.

On Long Island, criticism of Cuomo’s plan has been acute given that customers still are paying for the shutdown of the Shoreham nuclear plant.

“No subsidy came from the State of New York to help Long Islanders crippled by LILCO’s mistake,” Assemb. Fred Thiele (I-Sag Harbor) said in a statementwhich referred to the Long Island Lighting Co., which LIPA took over in 1998. “It makes no sense to pour billions of dollars into these aging nuclear power plants.”

A group of owners of non-nuclear power plants is moving forward with a lawsuit to block the subsidy, saying it gives an unfair advantage to nuke plants. Also, consumer watchdog New York Public Interest Research Group and others have waged an aggressive statewide campaign urging customers to “Stop the Cuomo Tax.”

The groups charge that the estimated $7.6 billion cost of the bailout over 10 years gives a subsidy to an energy that is “costly, dangerous and bad for our health and environment.”

The PSC says the cost over that period is $2.86 billion, and argues that not taking action to save the nuclear plants would cost customers $7 a month.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.