Tuesday, November 03, 2015

Dropping Shoes . . .

A couple shoes were dropped on Upstate NY yesterday: (1) The FitzPatrick Nuclear Power Plant in Oswego County will be closed in 2017 putting 600 people (many highly paid) out of work. (2) An ALCOA aluminium smelting operation will close in Massena taking almost 500 more jobs.  

The FitzPatrick shut down is motivated by "economics" -- in this case the low prices of natural gas.

According to USA today:

The Oswego plant, which has been in operation since 1975, loses about $60 million annually, and its financial viability is worsening lately because of cheaper electricity generated through natural gas, according to the company.

The Alcoa shut down is apparently also based on economics:
A source close to the situation said Alcoa has been losing about $1 million a week at the West smelter.
Official reaction to these announcements was both predicable and illustrative of New York's wrongheaded approach to business. 

 In the case of FitzPatrick . . .
"The state of New York will pursue every legal and regulatory avenue in an attempt to stop Entergy’s actions and its callous disregard for their skilled and loyal workforce," said Gov. Andrew Cuomo in a statement . . .
Demonize the company?  The plant is losing money!  The company needs to stop losing money! What is so difficult for the political class to understand? Entergy is shutting down a plant worth $Billions . . . the shutdown process itself will likely to take years and cost over a $Billion (based on the projected cost of shutting down the Vermont Yankee facility.)  I am sure this decision was made with much angst.  To accuse the company of disregarding its workforce is not only nonsense . . . it demonstrates the "anti-business" climate existing in New York State that cannot be masked by "Startup NY" or whatever other crony gimmick there is to entice a business get into bed with state government.

In the case of Alcoa, The Watertown Times quoted Massena Mayor Currier . . .
“The industrial model has changed in this country. It’s no longer there. We have to stop chasing that; it’s not going to happen,” he said. Instead, Mr. Currier said, the region should focus on areas such as tourism and recreation. “I’m a firm believer that the 1 gig broadband we have, combined with Massena Electric’s affordable, dependable power, is a great economic development tool for this community as we move forward,” he said.
Travel and tourism? or 1 gig broadband? The political class has all the answers but fails to grasp the simple: ALCOA loses money in Massena.

Until New York State governs itself more like Texas, where businesses can make money, look for more shoes to drop.

2 comments:

Anonymous said...

With this and all the other consistent and unrelenting BAD news coupled with the lack of ANY good news, what do we do? We just had an election and out of about 10 offices on the ballot I saw only 1 was contested so 90% unopposed!!!

The corruption and depression will not end until we can cast meaningful votes and that will not happen as long as the political machines run things. Since that isn't going to change anytime soon the only option is if you have the means get out while you can, don't let your family be trapped here.

Sad. True. Pathetic.

Arnie Talgo said...

Take a look at these rate maps--Residential--Commercial and Industrial
So Fitzpatrick can't afford to stay in business at $10/mWhr? That's 1 cent per kWhr.
So the question is how does the residential bill get to 20 cents per kWhr?
http://www.consultbai.com/images/stories/publications/maps15_274805.pdf