Organized Power Markets Not Delivering Optimal Outcomes for the Long Term

Sept. 25, 2016

Organized power markets have led to the poor economic outlook we are seeing for existing nuclear plants

Organized power markets have led to the poor economic outlook we are seeing for existing nuclear plants because these markets historically have not valued the zero carbon emissions nuclear plants produce or their high availability even under extreme conditions.

In New York State it has become evident that aggressive goals for reducing carbon emissions would not be achieved without the continued operation of existing nuclear plants. To deal with this the state public service commission has just adopted a clean energy standard that calls for subsidizing operating nuclear units through the sale of zero emission credits to support them economically and allow their continued operation. For the present, the upstate Ginna, Fitzpatrick and Nine Mile units are covered by the program. Further consideration of the politically embattled downstate Indian Point Power Station in the plan will take place down the road. Realistically, however, the plant which provides over 25% of the power to New York City should ultimately qualify for a subsidy.

The same market conditions in New York also exist in other parts of the country, especially Illinois. For the survival of nuclear power in these areas, the climate change attributes of this source will have to be taken into account from a valuation perspective similar to what New York has done. The economic outlook for dealing with climate change and future energy needs awaits the next steps to be taken on a national basis.

About the Author

Matthew Cordaro, PhD | Trustee at Long Island Power Authority

Dr. Matthew C. Cordaro, whose career spans many years as a senior executive in the utility industry, an educator, scientist and researcher in the fields of business, energy and environment, most recently was the Dean of the Townsend School of Business at Dowling College. Before moving over to Dowling he was at the C.W. Post Campus of Long Island University in the College of Management where over his tenure he served in a number of high level administrative, academic and research positions. Dr. Cordaro has served as the Chairman of the Suffolk County Legislature’s Utility Oversight Committee and recently was appointed by the New York State Assembly Leader to the Long Island Power Authority’s Board of Trustees.

Just prior to joining Long Island University Dr. Cordaro served as the first President and Chief Executive Officer of the Midwest Independent System Operator (Midwest ISO) based in Indianapolis, Indiana, the largest independent transmission system operator in the nation. Today the Midwest ISO is responsible for electric reliability and markets covering 57,000 miles of transmission lines and 150,000 Megawatts of electric generation and clears over 23 billion dollars in energy transactions, over an area exceeding 200,000 square miles, and extending into 13 states and one province of Canada.

Previously, Dr. Cordaro was employed as President and Chief Executive Officer of Nashville Electric Service, one of the ten largest public electric utilities in the nation. He also previously served as President of Long Lake Cogeneration Corporation and as Senior Vice President of Long Lake Energy Corporation, a major alternative energy producer. For 22 years he was with Long Island Lighting Company, a major investor-owned utility, finally holding the position of Senior Vice President of Operations, Engineering, and Construction.

Dr. Cordaro is currently a member of the New York Affordable Reliable Electricity Alliance’s advisory board. He is a past member of the board of directors of the Electric Power Research Institute, the American Public Power Association, and the Nature Conservancy of Tennessee, and has served on the editorial advisory boards of World Transmission and Distribution magazine and the Long Island Business News. Dr. Cordaro has also testified many times before congressional and state legislative committees and is frequently sought by the media for expert commentary.

Dr. Cordaro holds a Ph.D. in Physics and Engineering from Cooper Union, an M.E. in Nuclear Engineering from New York University, a B.S. in Engineering Science from C. W. Post College and completed the Executive Management Program at the University of Michigan. He has also been an Atomic Energy Commission Fellow, a Guest Research Associate at the Brookhaven National Laboratory, and has served as an adjunct faculty member at Polytechnic Institute of New York and C. W. Post College. Dr. Cordaro has also authored many publications on education, business, energy, environment and utility issues.