Pa. bill would add nuclear power to alternative energy lists
Legislation announced Monday would effectively add nuclear energy to the list of alternative energy sources benefiting from state policies.
Financially struggling plants such as Dauphin County's Three Mile Island could be saved from premature closure if the legislation passes, said the bill's prime sponsor, state Rep. Thomas Mehaffie, R-Dauphin County.
TMI's Unit 1 reactor — owned by Exelon Generation — is scheduled to be decommissioned in September, and the company does not want to take significant financial steps to keep the plant open without legislation ensuring that nuclear energy is included in policies favoring alternative and carbon-free energy producers.
David Fein, Exelon's senior vice president of state governmental and regulatory affairs, urged support for the Keep Powering Pennsylvania Act (HB 11), which was introduced Monday, March 11, at the Ironworkers Local Union 404 in Harrisburg.
The bill would update the Alternative Energy Portfolio Standards Act of 2004 to allow carbon-free energy producers — including nuclear power plants — to take advantage of a credit program that would bring them additional revenue.
Twenty state representatives, including Mehaffie and Rep. Carol Hill-Evans, D-York City, are listed as sponsors.
Update: Under the existing law, the state's approximately 200 electricity suppliers must purchase alternative energy credits from two tiers of producers — including sources such as wind, solar and hydroelectric — and those credits must equal 18 percent of their electricity sales by 2021.
The update would add a third tier to the law in which the state's 11 electricity distributors must buy credits from carbon-free energy producers that equal 50 percent of their sales each year.
An administrative body would be responsible for the credit sale at the end of each year, and the cost would be added to consumers' utility bills.
The credit price could be set at about $7, based on current market costs, and a ceiling of about $8 and floor of about $6 would be applied to protect consumers from fluctuating prices.
Tier 3 will not affect the percentages of the first two tiers, and carbon-free renewable energy sources could potentially benefit from credits in multiple tiers.
Any nuclear plant in-state or out-of-state could apply for credits and would be ranked according to which would have greater detrimental effect on the state's environment if it were to close or not be created.
Plants must make a commitment to operate for six years to qualify.
Companies cannot apply if they are participating in another state's program or have rates recovered through a public utility commission, which is not the case in Pennsylvania since the market is deregulated.
The bill has not yet moved to the speaker of the House and been assigned to a committee, Mehaffie said.
Saving plants: The Delaware County Chamber of Commerce, Central Pennsylvania Building and Construction Trades and other local unions came out in support of the bill, which they said would potentially save 16,000 jobs.
"The markets do not treat all clean sources of energy the same, and they do not penalize polluters," Mehaffie said.
Nuclear energy advocates have long argued for its environmental benefits, seeking an even playing field for nuclear in the marketplace among renewables, but opponents feel that any efforts to prop up the industry are a bailout for unprofitable plants.
The combined profits for nuclear energy corporations operating in Pennsylvania were $640 million in 2018, according to Citizens Against Nuclear Bailouts, a natural gas-funded coalition.
And Exelon already receives $580 million annually from New York and $230 million annually from Illinois in subsidies, the coalition said in a statement.
FirstEnergy Corp.'s Beaver Valley plant is due to close two reactors in 2021, and the state's other three plants, including Peach Bottom Atomic Power Station in southern York County, are not far behind, Mehaffie said.
Costs: "If we fail to act and these plants close, our consumers will be paying higher rates in the long term than if we passed legislation and keep them open," he said.
"The cost of doing nothing is $4.6 billion dollars," Mehaffie said, including $788 million annually in higher electricity costs to consumers, but the cost of the bill is about $500 million.
"The typical residential electricity bill would increase $2.39 per month without nuclear, but with nuclear and the AEPS credit, the typical bill will only increase $1.77 per month," he said, citing a comparison of the average cost from the state's 11 distributors.
Gov. Tom Wolf will be formally reviewing the bill now that it has been introduced, Wolf's office said in a statement, emphasizing that "any solution to ensure the sustainability of nuclear facilities should have a fair cost-benefit ratio for consumers and be based on full transparency from operators seeking assistance."
Andrew Williams, director of regulatory and legislative affairs for the nonprofit Environmental Defense Fund, argued it would be more cost-effective to place a limit on power sector carbon emissions — and Pennsylvania is the only state from Maine to Virginia not to have one.
"This is an expensive Band-Aid that saddles consumers with the majority of risk,” he said in a statement.