Nuclear Bailout
Issue:
Power generating sources like nuclear and coal-fired plants have struggled to compete against low-priced natural gas in wholesale electricity markets. America's nuclear power industry faces slowing demand for electricity, and competition from cheaper natural gas and renewables. And now, touting itself as a form of clean energy, the nuclear industry is lobbying state legislatures with a controversial pitch for help – subsidies.
IECPA Position:
Energy Intensive Consumers support a diverse power plant generation portfolio including nuclear power plants. We do not support a unique subsidy for those plants. While increasing electricity rates on households and small businesses are bad enough, the brunt of the impact will be felt by large-scale users of electricity, including our manufacturers, schools, transit systems and city governments.
IECPA will be having meetings in Harrisburg with Legislators and continuing or efforts to prevent a costly nuclear bailout in PA.
IECPA Testimony to House Consumers Affairs Committee - 04.29.19
IECPA Nuclear Bailout Memo to Legislators - 03.01.19
PA Nuclear Bailout Cost Calculation
Details:
Nuclear generation owners (Exelon, First Energy and Talen Energy Companies) are trying to achieve legislation to create nuclear plant cost subsidies.
- Energy Intensive Consumers support a diverse power plant generation portfolio including nuclear power plants. We do not support a unique subsidy for those plants.
- While increasing electricity rates on households and small businesses are bad enough, the brunt of the impact will be felt by large-scale users of electricity, including our manufacturers, schools, transit systems and city governments.
- Large manufacturers with multiple facilities could see more than $6 million in additional energy costs annually.
- Pennsylvania consumers have already paid Billions in costs for these plants during the de-regulation of the electric industry. These plants have already been paid for.
- Additionally, nuclear plant owners and their shareholders made substantial profits for many years prior to the Marcellus Shale Gas market development. The PJM Market has already provided plant owners the opportunity to collect over $1.95 Billion in revenues from 6/1/16 – 5/31/20 in the Capacity Market (in addition to energy revenues).
- Offering a subsidy to nuclear plant owners is discriminatory to the larger population of power plants supporting consumers.
- Nuclear plants are fundamentally different than a direct comparison to Solar & Wind renewables, future generations must manage the nuclear waste for thousands of years.
- Proponents of a Nuclear Bailout to continue operations at Pennsylvania's Nuclear Power plants tout a minor cost impact for consumers. A $2/month to $4/month increase to residential homeowner bills is used to represent the financial impact. Annual financial impacts for the average IECPA member is approximately $500,000 per year using the $2/month rate and $1,000,000 per year at the $4/month rate. Now consider that Bailouts are promoted for ten years or more and the impact becomes $5 to $10 million or more. This cost would dramatically impact job retention/job creation initiatives at Pennsylvania's largest employers, diminish funds for innovation, reduce investment, minimize energy efficiency efforts and generally diminish the competitiveness of Pennsylvania companies.
The passage of a nuclear subsidy in NJ (Nuclear subsidy approved, could cost NJ ratepayers billions) has re-energized the discussions in PA.
IECPA sent letters to Pennsylvania federal Congressman regarding the federal coal/nuclear bailout policies being considered.
IECPA Letter to Congressman Cartwright; IECPA Letter to Congressman Costello; IECPA Letter to Congressman Doyle
IECPA Executive Director Rod Williamson participated in interview with the Pennsylvania Business Report and made significant contribution to an article on the issue.
Nuclear bailouts not a good idea for Pennsylvania, experts say
Senator Aument and largely members of the Nuclear Energy Caucus introduced a legislation co-sponsorship memo on February 4th, 2019. Also Rep. Tom Mehaffie introduced a similar co-sponsorship memo in the House. While short on detail they reference need to amend the Alternative Energy Portfolio Standard in Pennsylvania to include the mandatory purchase of nuclear energy by electricity suppliers in Pennsylvania.
State Representative Tom Mehaffie introduced his bailout legislation (House Bill 11 of 2019) on March 11, 2019. After several hearings, the bill was not moved forward.