USA’s Inflation Reduction Act is a game-changer for the nuclear industry -says Public Service Enterprise Group

PSEG to consider nuclear plant investments, capitalizing on the IRA’s production tax credits, CEO says

Utility Dive, Feb. 22, 2023, Stephen Singer

Dive Brief:

• Public Service Enterprise Group will consider “small but important value-added investments” at its nuclear plants, capitalizing on production tax credits in the Inflation Reduction Act, President and CEO Ralph LaRossa said Tuesday…………………

Dive Insight:

The passage of the IRA last August will “help to preserve the financial viability of our carbon-free nuclear fleet into the next decade,” the Newark, New Jersey-based parent company of Public Service Electric and Gas said in a statement.

“While the industry waits for clarifications, we believe the Inflation Reduction Act is a game-changer that should provide the stability required for long-term viability of the U.S. nuclear fleet,” LaRossa said.

Guggenheim analyst Shahriar Pourreza said in a client note Tuesday that “longer term upsides for nuclear” could come from U.S. Treasury Department guidance on production tax credits. Guidance will take time and “further drive strategic decision-making,” he said……….

Daniel Cregg, executive vice president and chief financial officer, said PSEG is engaged in a “waiting game” as the Treasury Department provides details on the nuclear production tax credits. “I don’t even have a date to tell you when Treasury is going to come out with it,” he told analysts.

The IRA, with $369 billion in climate provisions, provides tax credits for existing nuclear power plants and new facilities, advanced reactors and small modular reactors. The law provides a choice between a technology-neutral production tax credit of $25/MWh for the first 10 years of plant operation or a 30% investment tax credit on new zero-carbon power plants that begin operating in 2025 or later.

Tax credits have drawn interest from other energy companies. Constellation announced Tuesday it will spend $800 million for new equipment to increase the output of two nuclear generating stations in Illinois by about 135 MW.

“Support for nuclear in the IRA has made extending the lives of U.S. nuclear assets to 80 years more likely assuming continued support,” Constellation said. “It has caused Constellation to examine nuclear uprate opportunities that were canceled a decade ago due to market forces.”

LaRossa reiterated PSEG’s decision to exit offshore wind generation………… -more https://www.utilitydive.com/news/pseg-ira-nuclear-production-tax-credits/643221/—

February 22, 2023 - Posted by Christina Macpherson | business and costs, Canada, politics