PA Environment Digest Blog: Exelon To Retire Three Mile Island Nuclear Power Plant In 2019

Exelon Tuesday announced it will prematurely retire its Three Mile Island Generating Station on or about September 30, 2019, absent needed policy reforms.

Officials met with employees and informed community leaders, and pledged continued open dialogue as they prepare for this transition.

“Today is a difficult day, not just for the 675 talented men and women who have dedicated themselves to operating Three Mile Island safely and reliably every day, but also for their families, the communities and customers who depend on this plant to produce clean energy and support local jobs,” said Chris Crane, Exelon president and CEO. “Like New York and Illinois before it, the Commonwealth has an opportunity to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide. We are committed to working with all stakeholders to secure Pennsylvania’s energy future, and will do all we can to support the community, the employees and their families during this difficult period.”

Exelon is taking the first steps to shut down the nuclear plant, including:

-- Informing key stakeholders, which will include sending PJM a deactivation notice and making permanent shutdown notifications to the Nuclear Regulatory Commission within 30 days;

-- Immediately taking one-time charges of $65-110 million for 2017, and accelerating approximately $1.0-1.1 billion in depreciation and amortization through the announced shutdown date;

-- Terminating capital investment projects required for long-term operation of TMI; and

-- Canceling 2019 fuel purchases and outage planning, impacting about 1,500 outage workers.

Absent policy reforms, the loss of Pennsylvania nuclear plants would increase air pollution, compromise the resiliency of the electric grid, raise energy prices for consumers, eliminate thousands of good-paying local jobs and weaken the state’s economy.

Despite producing 93 percent of the Commonwealth’s emissions-free electricity and avoiding 37 million tons of carbon emissions - the equivalent of keeping 10 million cars off the road every year - nuclear power is not included in the state’s Alternative Energy Portfolio Standard (AEPS).

Yet 16 clean power sources including solar, wind and hydro energy are supported by this state energy policy.

Amending the AEPS is one of many potential solutions to preserve Pennsylvania’s nuclear plants. Other options include establishing a zero emissions credit program, similar to the approach being implemented in Illinois and New York.

Exelon is committed to working with its stakeholders to find the best solution for Pennsylvania - one that will maintain nuclear energy’s $2 billion annual contribution to the state’s economy and its approximately 16,000 direct and indirect Pennsylvania jobs.

TMI directly employs 675 workers and contracts another 1,500 local union workers for refueling outages. The station provides more than $1 million in state property taxes and more than $300,000 in local community giving each year.

Exelon’s highly trained employees will continue to operate the plant at world-class levels of excellence, with staff transitions expected within six months of the plant’s final shutdown.

PJM Deactivation Notice

In it’s official deactivation notice to the PJM Interconnect Tuesday, Exelon said, “In summary, Three Mile Island Unit 1 is unprofitable and has lost more than $300 million over the past five years despite being one of Exelon’s best-performing plants.

“The energy market in PJM has not adapted to the evolution of the fleet, which has caused the devaluation of resources like Three Mile Island Unit 1.

“The facility is highly dependent on energy market prices that are at all time low levels as a result of a number of factors, including market rules that do not value the clean, resilient electricity provided by nuclear energy. As PJM’s CEO has acknowledged, policymakers have “tried to politely ignore these things, but they . . . are no longer ignorable.”

“Sixteen other types of clean energy are supported by the Commonwealth of Pennsylvania through the alternative energy portfolio standard, and though Three Mile Island Unit 1 produces more clean energy than all of those sources combined, it is not eligible for support under that program.

“While we are committed to working with all stakeholders to secure Pennsylvania’s energy future, unfortunately we cannot ignore the losses at the facility and must take this action now.”

Reaction

Senators Ryan Aument (R-Lancaster) and John Yudichak (D-Luzerne) along with Representatives Becky Corbin (R-Chester) and Rob Matzie (D-Allegheny), who co-chair the General Assembly’s Nuclear Energy Caucus, issued the following statement Tuesday regarding the announcement that Exelon Corporation will be closing the Three Mile Island Nuclear Generating Station.

“Today’s announcement confirms what we have suspected for many months - that there are serious and consequential underlying issues in Pennsylvania’s energy sector that must be addressed.

“The premature closure of the Three Mile Island Nuclear Generating Station will mean a significant loss of family-sustaining jobs, high capacity baseload clean energy, and the many direct and indirect economic benefits that surround the production of electricity from a nuclear power plant.

“As state lawmakers, we take seriously our obligation to set energy policies that help promote Pennsylvania’s economy. We equally are concerned about meeting the Commonwealth’s environmental goals. The closure of Three Mile Island will make meeting these challenges even more difficult.

“One of our top priorities in creating the Nuclear Energy Caucus was to focus on the value that each energy resource offers Pennsylvania and our citizens. We remain committed to that goal and will continue to invite all members of the General Assembly to participate in this important discussion so that together, we can advance policies that promote long-term economic, environmental and consumer benefits.

“Today, however, we are mindful of how difficult this news is for the many workers and their families who are affected, as well as the communities in central Pennsylvania that will be directly impacted.”

Natural Gas Industry

The natural gas industry-funded Citizens Against Nuclear Bailouts released this statement in response to Exelon’s announcement—

“Today’s announcement by Exelon to close TMI is unfortunate for the employees and local community; however, it does not change the fact that Pennsylvania ratepayers should not have to pay to bail out an outdated nuclear facility.

“Lawmakers created a deregulated electricity market that has delivered low energy costs for all Pennsylvania consumers.

“The decision to close TMI is a direct result of Exelon’s failure to adapt to the changing market conditions after the nuclear industry received nearly $9 billion from ratepayers for transitional costs to prepare for Pennsylvania moving to a competitive electricity market.

“A bailout of the nuclear industry may temporarily extend the lifespan of TMI for a few years, but the negative effect of higher energy costs as a result of a bailout would have a major impact on all energy users, including senior citizens, manufacturers, small businesses and many others.

“Last year, legislation was rushed through in Illinois that burdens ratepayers with the obligation to provide Exelon with $235 million per year in subsidies to prop up its nuclear power generation facilities in the state.

“The nuclear industry in New York will receive about $7 billion over 12 years, assuming the industry can keep its three financially distressed nuclear power plants in operation.

“The closing of TMI will not impact electric supply, and the grid will remain reliable. PJM Interconnection confirmed this year that the electricity grid for its 13-state region has a stunningly high reserve margin of 42,000 megawatts of excess capacity — TMI currently produces approximately 837 megawatts of power.

“The bottom line is that Pennsylvania ratepayers should not endure higher electricity bills to bail out aging nuclear plants that can no longer compete and leave behind a legacy of nuclear waste.”