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Fight Over Future Of Nuclear Plants Arrives At Pa. Capitol

March 12, 2019 GMT

After two years of preparation and months of speculation, supporters of Pennsylvania’s nuclear industry on Monday unveiled a proposed $500 million rescue package. Pennsylvania residents would pay about $1.77 a month per household under a bill introduced by Rep. Tom Mehaffie, R-Dauphin, that is likely to launch a fierce debate over how much government should tinker in setting the state’s energy mix. Mehaffie argues that consumers will pay a higher price if some of the state’s nuclear plants shut down, as threatened. Mehaffie pegged the bill’s costs at the lower end of the range of analysts’ expectations, some of whom estimated the bill would cost up to $900 million and cost residential customers more than $5 a month. Mehaffie’s district is located next to Three Mile Island Unit 1, whose owner, Exelon Generation, has threatened to shut down the plant in September without financial aid. “While much discussion will occur in the coming months about costs, the cost of doing nothing is $4.6 billion, including $788 million annually in higher electricity costs to consumers, whereas the cost of this bill is approximately $500 million — that’s an 8-to-1 benefit-to-cost ratio,” Mehaffie said in a prepared statement. He was set to unveil the bill Monday at an Ironworkers’ union hall in Harrisburg, along with labor and business leaders. The bill would amend the state’s 2004 Alternative Energy Portfolio Standards Act (AEPS), which mandates that 18 percent of all power sold in the state be derived from alternative energy sources by 2021. The bill would add a new category of zero-emission power reserved largely for nuclear producers that would supply 50 percent of the state’s electricity demand. Advocates say the rescue would save high-paying nuclear jobs, preserve a diverse mix of electricity sources, and prevent an increase in emissions of carbon dioxide and other pollutants from natural-gas plants that would step in to replace retiring nuclear plants. Opponents, including the natural gas industry, large industrial customers, and consumer groups such as the AARP, have derided the bill as a “bailout” that will increase costs, distort competitive energy markets and fail to improve the reliability of the electric grid. They say the subsidy would enrich most of the owners of the state’s five nuclear plants, including Exelon Generation, which operates three of the plants, including Limerick Generating Station in Montgomery County and Peach Bottom Atomic Power Station in York County. Critics maintain that most of the state’s plants are profitable without a subsidy. Sen. Ryan Aument (R., Lancaster), is expected to introduce a similar version of the nuclear bill later this week. Aument and Mehaffie are among the leaders of a bipartisan group of legislators that formed the Nuclear Caucus two years ago to lay the political groundwork for a nuclear rescue. The bill’s authors say that by amending an existing law, the Alternative Energy Portfolio Standards Act (AEPS), they hope to limit the grounds of an expected legal challenge. Advocates say the bill differs from nuclear rescues approved in Illinois, New Jersey, New York and Connecticut, which created a zero-emission credit specifically targeting nuclear energy. Federal courts have upheld the laws in Illinois and New York, and opponents have petitioned the U.S. Supreme Court to overturn them. In Pennsylvania, the current AEPS rewards two tiers of power producers. The first tier reserves 8 percent of the market for emerging renewable producers including wind, low-impact hydro, geothermal and biogas, and includes a 0.5 percent market share for solar photovoltaic producers. A second tier sets aside 10 percent of the market for alternative power producers, including large-scale hydro, waste-coal generators and power plants that burn solid waste. Mehaffie’s bill would create a Tier III credit that would reward zero-emission power producers that are connected to the grid (individual solar and wind producers need not apply). The producers would need to demonstrate that Pennsylvania’s environment would be negatively impacted if the power plant shut down or failed to come into service. Though out-of-state nuclear plants or even wind and solar producers could qualify for the credits, the Pennsylvania Public Utility Commission would rank applicants, under which a system that presumably would favor Pennsylvania producers. The natural gas industry, whose producers would benefit from the retirement of nuclear reactors and would be harmed by a law restricting the market for conventional gas and coal producers, are the major force behind an opposition group that formed two years ago, Citizens Against Nuclear Bailouts. Opponents said Monday they are still studying Mehaffie’s proposal. But Steve Kratz, a spokesman for the group, released a statement denouncing recent Exelon’s recent corporate earnings, which he said demonstrated the company did not need a subsidy. “This needs to serve as a wake-up call to all Pennsylvanians so they can see how corporate greed is trying to manipulate legislation in order to pad the pockets of shareholders,” Kratz said in a statement. “Why should ratepayers be egregiously taxed to bail out a corporation that boasts a record year?”