A new version of Pennsylvania’s contentious nuclear rescue proposal would steer as much as $541 million of ratepayer subsidies annually to clean-energy power producers, though in a nod to environmentalists, not all of it would go to nuclear generators.
State Sen. Ryan P. Aument, (R., Lancaster), who has led a two-year bipartisan legislative effort exploring a nuclear rescue, introduced a bill on Wednesday that is similar in scope to a House rescue package unveiled last month by State Rep. Tom Mehaffie (R., Dauphin), but different in several critical details.
The General Assembly will need to act in the next few months if it wants to avert a threatened closure of Three Mile Island Unit 1, which owner Exelon Generation says is losing money. Aument, in an interview Wednesday, framed the bill as a means to prevent the early closure of zero-carbon power producers, which would largely be replaced by pollutant-emitting fossil-fuel plants.
“The goal is not to bail out Exelon,” he said. “The goal is not to bail out an industry. The goal is to do all we can in Pennsylvania to promote innovation and clean energy resources.”
Pennsylvania is the fifth state to take up a proposal to support nuclear power plants, which have struggled to compete in energy markets where low-cost natural gas has driven down the price of electricity. The nuclear rescues are opposed by some environmentalists, consumer advocates, and the natural gas industry, whose production of new shale-gas resources has fundamentally reshaped energy markets in the last decade.
Both the Senate and the House nuclear rescue proposals would amend the state’s 2004 Alternative Energy Portfolio Standards Act (AEPS) to add a category of zero-emission power reserved largely for nuclear producers that would supply 50 percent of the state’s electricity demand.
Aument said his proposal, Senate Bill 510, differs from the House bill by imposing penalties on power producers that fail to meet their clean-energy commitments, by creating a procedure for the Pennsylvania Public Utility Commission to audit compliance and by allotting some of the new zero-emission credits to renewable producers, such as wind, solar, and hydroelectric plants.
“This is not just a nuclear bill,” said Aument. “The broader policy goal is promoting innovation, clean energy, and carbon reduction.”
The proposal would add 0.3 to 0.37 cents per kilowatt hour to customer bills, or up to $1.83 a month for a residential customer using 500 kilowatt hours. A customer using 875 kWh monthly, the average usage for all residential customers including those who heat with electricity, would pay up to $38.28 more a year.
The costs are unlikely to win over advocates of price-sensitive customers, such as large manufacturers and the AARP. But Aument said the costs of allowing nuclear power plants to close prematurely, and reducing the state’s entrenched nuclear industry, are greater than the subsidies.
“We certainly believe there would be a far greater costs in the future to consumers if the premature retirements of these plants were to take place and there would be a lack of diversity in the market,” Aument said.
Critics say all of the state’s nuclear power plants except Three Mile Island are currently profitable (though First Energy Corp. has announced it plans to shut down its twin-unit Beaver Valley Power Station in 2021). Aument said the legislation intentionally does not include a financial test for power producers to receive support.
“I did not want this bill to be a bailout, to be a financial rescue,” he said. “I wanted it to be about the broader policy goal.”