nuclear-news

Focus now on Pennsylvania, in the nuclear industry’s battle to get tax-payer funding

Pennsylvania Is Newest Nuclear Subsidy Battleground, Power Magazine, 02/14/2019 | Sonal Patel, Pennsylvania, the nation’s second-largest nuclear power-producing state, is now definitively a battleground for nuclear power subsidies. 

Last week, in two memos that were circulated in the state House and Senate, seven lawmakers signaled they would soon introduce legislation that would update a 2004 state law—the Alternative Energy Portfolio Standards (AEPS)—to include nuclear power. The law currently requires that 18% of electricity sold should come from renewable sources by 2021, including at least 0.5% of solar photovoltaic power. …….

The memo specifically cites concerns about Beaver Valley and Three Mile Island, which, barring legislative remedy, will shut down soon because they cannot compete with cheaper sources of generation in PJM Interconnection’s wholesale electricity market.

FirstEnergy Solutions Banks on Reforms

FENOC, a subsidiary of FirstEnergy Solutions (FES) that sought bankruptcy protection in March 2018, last year notified PJM Interconnection it would shutter Beaver Valley in 2021 (as well as two Ohio plants, the single-unit 908-MW PWR at the Davis-Besse Nuclear Power Station in Oak Harbor by 2020, and the single-unit 1,268-MW BWR at the the Perry Nuclear Power Plant in Perry in 2021). At the time, a company executive said, “Though the plants have taken aggressive measures to cut costs, the market challenges facing these units are beyond their control.”…….

Pennsylvania Could Be Newest Victory for Exelon

Meanwhile, Exelon in May 2017 announced it would shutter Three Mile Island in September 2019 unless policy reforms are enacted in Pennsylvania. Industry observers, however, point out that the gambit is similar to one employed in Illinois to help enact the Future Energy Jobs Act in December 2016 (it went into effect in June 2017), keeping Exelon’s Clinton and Quad Cities plants running. Exelon also strongly backed New York’s Clean Energy Standard, a measure that became effective in April 2017, to preserve the at-risk Nine Mile Point, FitzPatrick, and Ginna reactors in upstate New York. And in 2018, New Jersey also enacted zero-emission credits (ZECs) to bolster profitability of the Hope Creek plant, which is owned by PSEG, and Salem, whose output Exelon owns jointly with PSEG. 

As financial documents Exelon filed on Feb. 8 show, the New York and Illinois ZEC measures have proven beneficial for the company, whose 32.7 GW generation portfolio comprises a 20.3 GW nuclear fleet—the largest in the nation. In 2017, Exelon recorded ZEC revenues from New York and Illinois of $343 million. For the full year of 2018, Exelon Generation recorded a net income of $370 million, while adjusted operating earnings for 2018 soared to $1.3 billion (its net income was $2.7 billion in 2017, and adjusted operating earnings were $989 million).

The company noted that 2018 adjusted operating earnings reflect “the favorable impacts of New York and Illinois ZEC revenue (including the impact of ZECs generated in Illinois from June 1, 2017 through Dec. 31, 2017), increased capacity prices, tax savings related to the [2017 Tax Cuts and Jobs Act], realized gains on nuclear decommissioning trust (NDT) funds and decreased nuclear outage days, all of which were partially offset by lower realized energy prices and the absence of earnings from Exelon Generation Texas Power due to its deconsolidation in the fourth quarter of 2017.”……..

Widening ZEC Horizons

If Pennsylvania backs nuclear subsidies, it will become the fifth state in the U.S. to do so on a statewide basis. Along with Illinois, New York, and New Jersey, in 2017, Connecticut also enacted legislation to allow Dominion’s Millstone nuclear plant to become eligible for a state procurement process for ZECs, upon certification of financial need. ……..

The nation’s 98 licensed nuclear power reactors at 59 sites in the U.S. generate about 20% of the nation’s power. However, the nuclear sector is facing severe financial pressure from cheaper power produced by natural gas plants, growing supplies of renewables, and stagnant electricity demand. Between 2013 and 2018, seven U.S. reactors were permanently shuttered, and 12 others are planned for closure through the mid-2020s. Dismal economics have stymied plans to build up to 30 new U.S. reactors, which were announced over the past 10 years. Only two reactors are under construction today—at Plant Vogtle in Georgia, which continues to face major challenges.   https://www.powermag.com/pennsylvania-is-newest-nuclear-subsidy-battleground/?pagenum=1

February 16, 2019 - Posted by Christina Macpherson | politics, USA