Pennsylvania electric customers would pay hundreds of millions of dollars a year in subsidies to the state’s nuclear industry — about $5 more per month for a typical household, by one estimate — under a draft nuclear rescue bill widely circulated in Harrisburg.
The long-awaited legislation, which proponents say is still undergoing revisions before it is formally unveiled, would direct a massive infusion of ratepayer funds to the state’s nine reactors. The owners of three reactors have announced their imminent retirement if they do not receive subsidies that they say would put the plants on equal footing with other zero-emission power generators, such as wind and solar.
But some of the state’s reactors are not in immediate danger of closure. The state’s most profitable nuclear plant, the twin-unit Limerick Generating Station in Montgomery County, is projected to earn hundreds of millions of dollars in the next few years, without a subsidy.
Supporters say the proposal would correct “market flaws” by including nuclear energy into 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 draft proposal would create 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.
“You can’t be serious about fighting climate, you can’t be serious about reducing smog in Pennsylvania, and stand idly by as a distorted market closes down nuclear plants,” said John Hanger, former Pennsylvania Department of Environmental Protection secretary, who works as a consultant to Exelon Corp., which has promised to shut down its Three Mile Island Unit 1 reactor in September without a rescue. Unit 1 is located next to Unit 2, the infamous reactor that shut down 40 years ago this month after a partial meltdown.
The proposal has already generated fierce opposition from the natural gas industry, large industrial customers, and consumer groups such as the AARP, which deride 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 state’s nuclear plants, which are competitive without a subsidy.
“They’re crying this is an emergency," said Kathleen Duffy Bruder, a lawyer with McNees Wallace & Nurick, LLC in Harrisburg, which represents the Pennsylvania Consumer Energy Alliance, a trade group of large industries. “They’re pressuring legislators to rush this through based on scare tactics -- `If you don’t do this, you’re losing jobs, you’re losing the nuclear industry, you’re losing all these things.'”
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.