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Pennsylvania Nuclear Energy Caucus outlines ways it says Three Mile Island can be saved

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 11/29/18

The Pennsylvania Nuclear Energy Caucus presented options for how state government can act to prevent the premature closings of the Three Mile Island and Beaver Valley nuclear power plants during an …

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Pennsylvania Nuclear Energy Caucus outlines ways it says Three Mile Island can be saved

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The Pennsylvania Nuclear Energy Caucus presented options for how state government can act to prevent the premature closings of the Three Mile Island and Beaver Valley nuclear power plants during an event at the Londonderry Township fire hall on Thursday, Nov. 29.

The caucus, a bipartisan group of 80 state House and Senate members formed in March 2017 — two months before TMI owner Exelon announced plans to close TMI by September 2019 — presented three options as part of a report that the caucus released at the event.

One is to modify Pennsylvania’s Alternative Energy Portfolio Standard to put nuclear power on an “equal footing” with other zero-carbon emission electricity generators, such as wind and solar.

This option also proposes establishing a Zero Emission Credit program, or “ZEC,” instead of modifying the portfolio standard. A Zero Emission Credit program could provide payments to compensate nuclear plants for not emitting greenhouse gases in making electricity.

Another option — perhaps the most viable at this time to save TMI and Beaver Valley, according to caucus Co-Chairman Sen. Ryan P. Aument, a Republican from Landisville in Lancaster County — also calls for modifying the portfolio standard or creating a ZEC, but doing that consistent with policy proposed by the Federal Energy Regulatory Commission meant to allow individual states to pursue their own energy policy goals, within the broader framework of the PJM.

Pennsylvania-based PJM is the regional grid operator that holds capacity auctions each year to ensure that enough power generation resources are available to meet demand in its region covering all or part of 13 states and the District of Columbia.

The third option is to establish a state carbon-pricing program, where a price is placed upon the emission of carbon in order to try and lower the amount of such emissions.

The caucus report also includes a fourth option — to “do nothing” — that Aument does not see as viable, as it would “allow the market to play out in its current forms” and lead to the closing of TMI and Beaver Valley and eventually the three other nuclear plants in Pennsylvania.

Exelon in May 2017 said it would close TMI by September 2019, unless federal or state government act to put nuclear power on a level playing field economically with other forms of energy, including solar and wind and natural gas.

TMI has not made a profit in six years, according to Exelon.

On March 28, FirstEnergy announced plans to close its Beaver Valley plant in 2021.

Joining Aument and other members of the caucus for the presentation on Thursday were 60 to 70 employees of TMI, and 20 to 25 employees of the Beaver Valley plant, who came to the fire hall by bus from about four hours away.

“Basing long-term energy decisions on the short-term price — the short-term marginal price — and not recognizing the importance of reliability and resiliency, the fuel diversity, the environmental benefits — I think that’s foolish,” Aument said in remarks following the presentation. “We need to have an energy policy that takes into account these long term benefits, and the current market simply doesn’t do that.”

Other than to dismiss the “do nothing” option, Aument said he is not advocating for any of the other three options in particular.

He defined the role of the caucus as “being able to present all these options in a neutral way to the members of the General Assembly … to identify the most viable path forward.”

At the same time, Aument suggested the option of a state program in tandem with FERC may be the most “viable” path, given the “mixed message” that FERC has been sending states such as New York, Illinois, Connecticut and New Jersey that have acted to avert the early shut down of nuclear plants.

For example, Aument said FERC has taken actions indicating that the agency views these state interventions as “disrupting” the PJM capacity market.

But at the same time, FERC has also indicated that states “ought to be able to advance state specific policy goals, such as Pennsylvania already has” with the portfolio standard, Aument added.

“It seems to be two conflicting pieces of guidance we are receiving from FERC…but certainly they have provided this alternative where a PJM market can be maintained while at the same time supporting state policy goals, so I think there is an opportunity to pursue that path,” he said.

A statement released by PJM reacting to the caucus report  noted that FERC has determined that “subsidies distort the wholesale electricity markets, and will have the effect of driving competitive generators out of the market and raising costs.”

PJM’s current generation mix is “30 percent less carbon intensive than 10 years ago, and Pennsylvania consumers have seen wholesale energy costs decline between 30 and 50 percent over that time.”

Carbon pricing may ultimately be the best long-term solution. However, Aument sees no “clear consensus” among state legislators on such a program, nor does he see carbon pricing being put in place in Pennsylvania in time to avert the shutdown of TMI and Beaver Valley.

Aument also dismissed as “disingenous” critics who oppose state action to prevent closure of the nuclear plants as a bailout.

The term bailout oversimplifies “a very complex conversation,” Aument said. Moreover, he contended that the oil and gas industry has used a “no nuke bailout” campaign to line itself up to benefit financially from closure of the nuclear plants.

“We’re not talking about a bailout. We’re not talking about a subsidy. We’re talking about very specifically valuing each resource appropriately for the value they bring to the system,” Aument said.

He did however acknowledge that all four options — including doing nothing — will come at some cost to the taxpayer.

One group opposing what it calls a bailout of the nuclear industry — Citizens Against Nuclear Bailouts — issued a statement shortly following release of the caucus report.

The group said that the caucus report takes a “singular view of a complex issue” and was done without input from consumer groups, state and federal regulators, independent power generators and, “most important, ratepayers, who are benefiting from the state’s deregulated electricity markets.”

The report is at odds with testimony before the caucus from PJM that said there is “no concern over grid resiliency or reliability” if the nuclear plants close, the CANB statement said.

“The nuclear industry will argue that Pennsylvania can’t afford to do nothing. The fact is that competition, innovation, energy efficiency and sustainability are driving an electricity grid that is more diverse than ever and an environment that is improving every day,” the group said. “CANB will continue to ask the state Legislature to heed the call of our members and ratepayers in Pennsylvania who have overwhelmingly said they refuse to pay more to prop up nuclear corporations that are failing to compete.”

However, the impact of closing nuclear plants on greenhouse gas goals in Pennsylvania would be “devastating,” caucus Co-Chairwoman Rep. Becky Corbin, R-Chester, said during the event at the Londonderry Fire Hall.

“The reality is this — the shutdown of nuclear plants across the country is a greenhouse gas emergency,” Corbin said. “Losing the Beaver Valley and TMI nuclear plants will negate five times the emissions benefit of all the solar and wind power installed in Pennsylvania to date.”

Also attending the event at the fire hall was Dauphin County Commissioner Mike Pries, co-chairman of the regional Clean Jobs for Pennsylvania coalition that formed shortly after Exelon’s May 2017 announcement to close TMI.

Pries again recited some of the numbers behind the economic impact of closing TMI, such as the combined loss of $1 million a year in annual tax revenue to the township, Lower Dauphin School District, and the county.

As a heads up for what could happen here, Pries also spoke of the experience of the closing of the Vermont Yankee plant in 2014 — also recited in the caucus report — which led to the immediate loss of more than 500 jobs, a 20 percent increase in property taxes, and an economic downturn that continues today.

“Make no mistake, this isn’t about Exelon. Exelon will be just fine. This is about the communities and the workers, this is about the loss they will fact if these plants close. It’s the local economies and the families that will be hurt, it’s the men and women who are with us today,” Pries said. “It’s time for the Legislature to act, and the time to act is now.”

Action by the state is needed by spring 2019 in order to avert the closure of TMI, Aument said.