Save Three Mile Island?
It’s an almost incomprehensible notion to people of a certain age in central Pennsylvania who - for several days in 1979 - worried the nuclear power station on the Susquehanna River was a ticking time bomb poised to destroy the world as they knew it.
But fast forward 40 years, and a major effort to save TMI and the rest of Pennsylvania’s relatively large nuclear power fleet is the energy issue du jour in the Pennsylvania Capitol.
The essential question is this: Should state lawmakers and Gov. Tom Wolf agree to a plan to subsidize the state’s five commercial reactors at a time when the nation’s natural gas boom is starting to push some of them toward early retirement? Should everyone pay higher electricity bills to keep TMI operating, as some suggest?
It’s a high-stakes decision that forces us to think through a lot of questions for which there aren’t easy answers. And it will force some TMI survivors to set aside some long-held biases stamped on the region’s consciousness by the accident.
What’s the problem?
As Pennsylvania and other states have tapped into their vast Marcellus Shale gas reserves, gas prices have lowered and energy companies have begun switching from coal to gas as the primary source for their power plants. Coupled with a stagnant demand for power since the Great Recession, the resulting dip in energy prices has made power generated by some of the state’s five nuclear power stations less competitive.
So much so that Three Mile Island, operated by Chicago-based Exelon Corp. - the largest nuclear power generator in America - has operated at a loss since 2015.
As a result, Exelon has said it will start taking steps to close the plant by this summer in the absence of state help. A second plant, Beaver Valley in western Pennsylvania, is also being targeted for a 2021 retirement by its operator, First Energy.
If those plants came off line, Pennsylvania would lose 26.8 percent of its nuclear generating capacity.
Do we need it? From a strict keeping-the-lights-on perspective, probably not.
But the question is more complex than that.
Nuclear energy also happens to be the nation’s largest source of carbon-free power, which means that it is kind of a foundational piece in the building fight to reduce greenhouse gas emissions to limit the effects of climate change.
Supporters of the subsidy effort here note that at present, nuclear provides 93 percent of the all the zero-carbon energy produced in Pennsylvania.
Any near-term drop in that nuclear generation would most likely be picked up by burning more natural gas which, while cleaner than coal, is still a fossil fuel and would add to Pennsylvania’s carbon loading and undermine progress the state has made in reducing greenhouse gas emissions over the last decade.
Changes in Pennsylvania's energy mix since the turn of the century.Arcadia Power Blog
"I personally do think it’s important to keep these plants on line for the zero-carbon power” they produce, said Christina Simeone, director of policy and external affairs for the University of Pennsylvania’s Kleinman Center for Energy Policy, which has not taken a position on the bail-out.
“At the end of the day, if we’re talking about de-carbonizing our power sector we’re going to need these resources,” Simeone said in a recent interview with StateImpact Pennsylvania. "Renewables (wind, solar, water) are going to be a part of it too, but we’re pretty slow on that front. And you need a lot of renewable energy to match a nuclear power plant where you’re talking about 2000 megawatts (of power generation).
“That’s a lot of wind farms.”
That is the heart of the case nuclear subsidy supporters are making: American energy markets as structured today simply don’t appropriately value the benefit of the carbon-free nature of nuclear energy even as tax credits and other incentives have been used to increase the affordability of renewables.
“Here in Pennsylvania you have 16 other technologies that get to participate in an alternative energy portfolio program that rewards them" with inclusion in a sub-set of clean power sources electric utilities must buy a certain share of their power from, said David Fein, Exelon’s senior vice president of state government and regulatory affairs.
“Nuclear power on the other hand has 93 percent of the carbon-free electricity in the state. And they don’t get to participate in that program.”
Other subsidy supporters say they like having nuclear around because of its proven reliability (accidents at TMI, Chernobyl and Fukishima notwithstanding) and simply for the fact of preserving a long-term diversity of energy sources as a protection in the case of natural gas price spikes.
And if you retire a nuclear power station, it’s next to impossible to bring it back.
“Our energy market has worked well because you had diversity" in the supply, said Sen. Robert “Tommy” Tomlinson, a Republican from Bucks County who is leaning in favor of the subsidy proposal. But as coal dwindles and nuclear struggles, he worries Pennsylvania’s traditional three-legged stool of power sources may be turning into more of a natural gas pillar.
“And I am very concerned that if you end up with a monopoly of one, then they can call whatever price they want,” Tomlinson said.
The debate.
The primary solution being advanced in the state legislature this spring is a plan to add nuclear energy to Pennsylvania’s Alternative Energy Portfolio Standard, a 2004 law requiring electric companies to buy part of their power from clean and alternative sources.
Under Rep. Tom Mehaffie’s plan, electric utilities would face a new requirement to buy clean energy credits - one per megawatt hour of energy produced from a zero-emission power generation source - for up to 50 percent of the total megawatts consumed in their respective service territories.
The price of the new credits would be tied to the value of existing credits for solar, wind and other alternative energy sources in the earlier program. Based on current values for those alternative energy credits, Mehaffie’s plan has been estimated by the Kleinman Center to cost about $500 million annually.
Rep. Tom Mehaffie, R-Dauphin County, introduces on March 11, 2019 the first of what will likely be several competing bills to assist struggling nuclear power plants in Pennsylvania.WITF
That’s a cost that would be ultimately passed on to industrial, commercial and residential electric ratepayers going forward. Mehaffie, a Dauphin County Republican, estimated that price at about $1.77 per month extra for the typical residential electric bill, though that couldn’t be independently confirmed by press time.
In the Senate, Sen. Ryan Aument, R-Lancaster County, and some colleagues are working on a similar bill that, while not introduced yet, is said to be less costly to ratepayers.
“The markets do not treat all clean sources of energy the same, and they do not penalize polluters," Mehaffie said as he unveiled his bill at a union hall outside Harrisburg, flanked by ironworkers who get regular work at TMI. "For the state legislature to ignore the challenges facing these nuclear plants, it would be one of the most irresponsible and irreversible decisions we’ve made in a generation.”
Opposition to the subsidy is widespread, coming from groups as varied as natural gas producers seeing artificial limits placed on their sales, to big businesses that count themselves among the state’s highest users of electricity, to the AARP, which says it is looking out for senior citizens on fixed incomes.
Advocacy groups aligned with the natural gas and coal industries have called the proposed subsidy unnecessary tampering in the energy market that will ultimately hurt consumers both as they pay their own electric bill, and absorb higher costs throughout the business cycle.
“When your basic necessities (electricity) are increased because of a decision that the people in Harrisburg make, it makes all of those other nice-to-haves more difficult, especially for individuals that have less income,” said Anna McCauslin, deputy state director for the state chapter of Americans For Prosperity.
AFP is a political advocacy group organized and funded by the conservative Koch brothers, whose family made much of its fortune on the fossil fuel side of the energy industry.
Steve Kratz, spokesman for a gas industry-supported coalition called Citizens Against a Nuclear Bailout, argued the evolution of Pennsylvania’s energy markets since a 1990s deregulation effort has brought steady declines in wholesale energy prices and a 20-year-low in carbon emissions from power generation.
As a result, Kratz said, “our members don’t feel like they should have to pay more for electricity just to bail out three major corporations (the owners of Pennsylvania’s nuclear fleet) that say they’re struggling.”
Opponents also argue that nuclear operators are really trying to leverage the struggles of a few plants to get a payday for the industry as a whole.
According to an economic analysis prepared for PJM Interconection last fall, all but three of the 18 nuclear plants in its grid should be profitable over the next four years. The three that project at a loss, including TMI in Pennsylvania, are all single-reactor sites that have higher operating costs per megawatt hour than multiple-reactor plants.
In other words, some argue, doing nothing won’t be a death knell for the overall nuclear industry.
“I have a hard time saying that somebody that’s making $640 million (the estimated net profit of the five Pa. nuclear plants in 2018) needs help from the government,” said Sen. Gene Yaw, R-Williamsport and the chair of the Senate Environmental and Energy Resources Committee.
But subsidy supporters push back on that argument by noting that the same PJM report shows a period of declining profits ahead for all of the nuclear power plants, suggesting that it may be only a matter of time till more of them are losing money.
The politics.
The Pennsylvania Legislature has a decision to make about nuclear energy.file
Most energy policy experts concede that the best way to attack the climate change issue would be to implement some kind of carbon pricing scheme at the national, or even regional, level.
But no energy or policy experts expect that to happen in the near-term future.
Which means that the nuclear subsidy issue is playing out at the state level. Over the last two years, New York, Illinois and New Jersey have all moved forward with policy measures intended to preserve their nuclear fleets.
In Pennsylvania, pro-subsidy forces appear to have already won the first round, which occurred mostly behind the scenes in the 2017-18 legislative session: According to Department of State lobbying disclosures, energy was lobbied as heavily as any industry besides health care in the 2017-18 legislative session, with expenditures in excess of $20 million.
That work has won legislative leaders’ commitment to take up the issue and see if a plan can be hammered out.
That doesn’t mean the leaders have already committed to a specific subsidy proposal. It does mean that they are letting supporters work the issue, and will lend their time and effort to see if a plan can be hashed out that can win majority support in the House and Senate, and in their respective majority GOP caucuses.
“I think the nuclear industry is important to Pennsylvania,” Senate Majority Leader Jake Corman, R-Centre County, said during an appearance before the Pennsylvania Press Club last month. "It’s an industry that if it went away, we would regret it in years to come.
“Now, I’m not interested in a bail-out," Corman continued. “... I’m interested in moving this issue forward to continue to have discussions so that hopefully - whether it be nuclear, whether it be alternative energies, whether it be natural gas - all of that can be successful here in Pennsylvania.”
So, the subsidy supporters have earned a spot on the agenda.
Winning will be a different story. Here’s a starter’s guide to the political dynamics ahead.
There are a lot of free market Republicans in the legislature - perhaps as many as 35 in the House and seven or eight in the Senate - who start this debate with a broad philosophical opposition to what could be a nine-digit tax on ratepayers to support one industry over other competitors.
Sometimes that means even neighbors to the nuclear plants will be hard to get on board.
Take Sen. John DiSanto, R-Dauphin County.
In an interview last week, he pointed to the inefficiencies of Three Mile Island in particular. DiSanto said it might be wiser and more efficient for the state to create a funding pool that could help local school districts and municipalities absorb the loss of property and income taxes if and when a struggling plant retires.
“How many times to we have to continue to assist this industry?” DiSanto asked last week, referring to the $1 billion-plus already spent on helping TMI’s owners with clean-up and recovery of so-called stranded costs.
“Jobs transition in and out all the time; that’s a fact in America," DiSanto said. "I think it would be significantly cheaper if the state looked at a five-year window to buffer the loss of some of these tax revenues, if that occurs.”
Translation? These subsidy bills are highly unlikely to pass just on majority Republican votes alone, and bipartisan coalitions have to be built.
There are several paths to do that.
Pro-subsidy Republicans can pair with pro-labor legislators - organized labor is strongly behind the subsidy bill, largely because of the thousands of plant maintenance jobs the nuclear industry provides to the construction trades on an annual basis.
Then, there is a group of so-called “Green Dog” Democrats - estimated at about two dozen in the House alone - whose vote will be driven solely by whether they see the final product as fair to ratepayers and a long-term win for the environment.
Rep. Greg Vitali, a Haverford Democrat who is a leader of that wing, says they see the value in keeping the nuclear plants on board but have their own conditions for any subsidy program, including:
- A much more finely-tailored assistance program that “only gives financial aid to nuclear plants that show substantial financial distress," and;
- Expand the existing market carve-outs for wind, solar, hydro and geo-thermal power and strengthening energy efficiency standards. A memo circulated recently by state PUC Commissioner Andrew Place said as little as a 1 percent increase statewide in energy efficiency could make up for the lost emissions reductions from TMI and Beaver Valley in five to 11 years, respectively.
That latter point has already happened elsewhere. New Jersey’s nuclear subsidy program was twinned last year with requirements that renewable energy account for 35 percent of the state’s power generation by 2025, and 50 percent by 2030.
Vitali said he’d like to see a Pennsylvania plan push renewables from their current 8 percent carve-out, to 30 percent by 2030.
The key, all sides know, is getting to a final bill that commands the support of at least a majority of the Republican majorities in both the House and Senate.
And that, as much as anything else, may come down to the costs to constituents.
As Sen. Tom Killion, R-Delaware County, put it recently, “I don’t think all the nukes are going to be closing... so it’s not like we’re going to be losing 40 percent (of Pennsylvania’s power generation) tomorrow. So if we’re going to be increasing costs to constituents, the question is, 'Is it worthwhile?’”
Senior legislative leaders have been noticeably reticent about the issue thus far, presumably because bills are just now being introduced and they are still getting the pulse of their own memberships at the start of a legislative session with many new faces in the House and Senate.
None responded to requests for interviews for this story.
On the other hand, none have declared themselves outright opponents.
Same with Gov. Tom Wolf. The Democratic governor has very carefully measured his words on the issue to date. Some believe, as on several other controversial issues in his first term, he’s going to let the legislature lead, and react if and when the leaders feel they’ve reached a plan they can pass.
The last big unknown is the legislative process itself.
The biggest hazard many subsidy supporters worry about is keeping the bill from collapsing under the weight of too many demands as all energy stakeholders work to preserve, or increase, their piece of the pie.
Subsidy opponents’ biggest concern, meanwhile, is that all of their best defensive efforts get swept away by a late-in-the-game deal in which the issue becomes part of a larger set of inter-locking political deals.
Exelon has said it needs to know what Pennsylvania is going to do by June 1, when it must decide whether to refuel the reactor at Three Mile Island. Senior lawmakers have already interpreted that as meaning that they have to make a decision one way or another before the General Assembly breaks in the summer.
Expect lots of efforts to change your, and your state legislator’s, minds as the debate continues through the spring.
StateImpact Pennsylvania reporter Marie Cusick contributed to this report.
This month marks the 40th anniversary of the partial meltdown at the Three Mile Island nuclear power plant. PennLive is collaborating with PA Post and WITF on a multimedia, month-long look at the accident, its impact and the future of TMI and the nuclear industry. That includes new documentary television and radio programs, long-form audio stories, photos, and digital videos. The work will include the voices of people affected as well as community events to engage with listeners, readers and viewers.