New Jersey

Funding Bill for Pennsylvania Nuclear Plants Sparks Debate in Capitol

The proposal would cost ratepayers around $500 million a year, an average of $1.77 a month, per household.

What to Know

  • If the funding bill is not passed, Three Mile Island will begin the process of closing in June.
  • In total, Pennsylvania customers paid more than $14 billion for electricity in 2018, including distribution charges and taxes.
  • Pennsylvania, the nation's No. 2 nuclear power state, has five nuclear power plants.

Legislation designed to pump hundreds of millions of ratepayer dollars into Three Mile Island and Pennsylvania's other nuclear power plants was introduced Monday and could usher in heated debate over whether the plants deserve what critics call a bailout.

The debate in Pennsylvania's Capitol will run up against a June 1 deadline in the nation's No. 2 nuclear power state.

That's when Three Mile Island's owner, Chicago-based Exelon Corp., has said it will begin the monthslong process of shutting down the financially struggling plant that was the site of a terrifying partial meltdown in 1979.

As the anniversary of the incident at the Three Mile Island nuclear plant comes upon us, we look back at the events that transpired.

The bill's sponsor, Rep. Thomas Mehaffie, R-Dauphin, said the plan is projected to cost ratepayers around $500 million a year by requiring that all five nuclear power plants get preferential treatment like what solar power, wind power and a few other niche energy sources received under a 2004 state law.

In total, roughly 6 million Pennsylvania electric customers paid more than $14 billion for electricity in 2018, including distribution charges and taxes, according to federal data.

By all accounts, three of five nuclear power plants in Pennsylvania are profitable for the foreseeable future, and there is no plan to prematurely shut down all five.

But the plants' owners warn that the same market dynamics that make Three Mile Island unprofitable will eventually affect Pennsylvania's entire nuclear fleet.

They contend that the legislation ensures the plants' survival against hostile market conditions, sustains "carbon-free" energy sources in the fight against global warming and, should all five shut down at once, prevents electricity bills from rising.

"So the Legislature can save Pennsylvania consumers money, keep our nuclear power plants open and keep our air clean," Mehaffie said at a news conference Monday at a Harrisburg-area Ironworkers hall.

Without nuclear power, the regional grid will lack a hedge for electricity bills against a growing natural gas power sector should prices spike, Mehaffie and others say.

Under the proposed legislation, regulated utilities would bill electricity customers for the cost of buying nuclear power credits at a premium similar to what the utilities pay wind and solar producers now.

Mehaffie estimated that his plan would cost the average household $1.77 a month. An amount, he said, that pales in comparison to the multibillion-dollar hit to Pennsylvania's economy if the five plants shut down at once. That would push the average household bill up by $2.39 per month, he said, although that scenario envisions no new power sources replacing the plants.

Ohio-based FirstEnergy Corp. projects that its Beaver Valley nuclear power plant in western Pennsylvania will become unprofitable in 2021 and has said it will shut it down by then, unless the state rescues it.

Independent analysts do not predict much effect, if any, on ratepayer bills if Three Mile Island and Beaver Valley shut down. What they foresee, however, is nuclear power being replaced by electricity from carbon-emitting natural gas- and coal-fired plants that typically run below capacity in a saturated market.

The bill's future in the Republican-controlled Legislature is unclear.

Opponents are lining up and include anti-nuclear activists, the AARP, large industrial electricity buyers and the state's considerable natural gas industry. They say the bill would effectively undo the state's competitive electricity market has kept power prices low for consumers.

A bailout means investing in outdated, inefficient and expensive power plants, and benefiting shareholders of profitable companies — Exelon reported $2 billion in profits last year — and largely profitable plants on the backs of Pennsylvania ratepayers, they say.

Environmental groups criticized the bill for failing to do more to fight climate change, like imposing a cap on carbon emissions in Pennsylvania.

Gov. Tom Wolf, a Democrat, said any legislation would need to provide benefits for consumers and that nuclear power plant owners must be transparent about their plants' finances.

Pennsylvania's five nuclear power plants are owned by Exelon, FirstEnergy, Texas-based Talen Energy, PSEG Inc. of New Jersey and 14 rural electric cooperatives.

They support Mehaffie's bill, elements of which emerged publicly last month, and Exelon is fresh off winning subsidies for plants in New York and Illinois and, with PSEG, in New Jersey.

The companies release little power plant-specific financial information, but Three Mile Island is widely viewed as unprofitable and at a disadvantage because it has just one generating unit after the second one partially melted down in 1979.

Analysts project the other three plants — Limerick, Peachbottom and Susquehanna — will be profitable for the foreseeable future.

Copyright AP - Associated Press
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