Tuesday, April 11, 2017

Natural Gas, Oil Square Off Against Nuclear Power Over Potential Bailout

A diverse coalition of Pennsylvania citizens’ groups, power generators and energy, business and manufacturing associations Tuesday launched Citizens Against Nuclear Bailouts in opposition to any legislative effort to require consumers to pay higher energy rates to bail out an uncompetitive nuclear energy industry.
Members of the Citizens Against Nuclear Bailouts Coalition include: AARP, Americans for Prosperity PA, Associated Petroleum Industries of PA, BASF, Calpine, Dynegy Inc., Industrial Energy Consumers of Pennsylvania, Marcellus Shale Coalition, Moxie Energy LLC, National Federation of Independent Businesses - Pennsylvania, NRG, Pennsylvania Manufacturers’ Association, Panda Patriot LLC, Pennsylvania Chemical Industry Council, Pennsylvania Independent Oil & Gas Association, Tenaska, and UGI Energy Services.
The bailout would mean higher energy costs for all consumers, including Pennsylvania senior citizens, manufacturers, small businesses and public institutions such as transit systems, hospitals and schools.
“AARP opposes any proposed bailout that would raise electricity rates for older adults living on fixed incomes and working families simply to increase profits for nuclear plant owners,” AARP Pennsylvania State Director Bill Johnston-Walsh said. “Having ratepayers prop up failing nuclear plants also directly conflicts with Pennsylvania’s deregulated electricity market, which was created to help consumers of all ages save money by shopping for competitive electricity rates.”
If Pennsylvania follows recent actions in Illinois and New York, the state’s electric customers could pay an additional monthly fee or have electricity prices artificially inflated to prop up the nuclear industry, according to the group.
Those same customers already shouldered this burden when the nuclear industry benefited from recovering an estimated $10 billion in “stranded” costs, said the group. The industry calls this new proposed fee a subsidy, but coalition members likened it to yet another tax increase on working families.
“The funding for nuclear bailouts will come from the pockets of hardworking Pennsylvania families and job-creating businesses,” said Michael Messer, president of the Industrial Energy Consumers of Pennsylvania. “In 1996, Pennsylvania implemented electric industry restructuring because our lawmakers determined that competitive market forces are more effective than economic regulation in controlling the cost of generating electricity.
“For years after, the nuclear generation industry boasted about how well they could compete in the wholesale market and kept the profits,” Messer added. “Now, when market conditions have changed, they want to return to ratepayer subsidies and a bailout.”
PJM Interconnection, responsible for the reliability of the transmission grid serving a 13-state region that includes Pennsylvania, recently released a study on the impact of reductions in coal and nuclear power generation related to electric reliability.
It concluded that reliability would not be impacted if generators burned more natural gas and renewables to replace other declining sources of power generation.
While noting the unnecessary burden placed on ratepayers, coalition members also responded to the “zero emissions” claims of the nuclear industry by pointing to the radioactive waste that nuclear plants create.
“We believe in market-based energy production,” said David N. Taylor, president of the PA Manufacturers’ Association. “Like every other industry, nuclear power providers should be free to compete for customers in the electricity market, but they shouldn’t benefit from a taxpayer or ratepayer bailout. If nuclear power generators didn’t want to compete in a deregulated electricity market, they shouldn’t have accepted billions of dollars in ratepayer ‘stranded’ cost payments to assist in their transition to a competitive market.”
Taylor said electric competition, combined with inexpensive, abundant natural gas, has driven down the cost for electricity and lessened demand for coal and nuclear power.
Consumers are crying foul in other states that recently enacted bailouts.
In March, nearly 70 local elected officials from New York called on the governor to halt a nuclear bailout program. The New York Public Interest Research Group found that the cost to public institutions, such as transit systems, housing authorities and hospitals, was a staggering $112 million a year in just the first two years of the bailout plan.
In Illinois, IMPLAN modeling found that the total cost of the nuclear bailout through 2030 is projected to result in at least 44,000 jobs being lost while slashing economic output by $14.7 billion and reducing state and local government tax revenue by $429 million.
Pennsylvania is struggling to address a budget deficit for the upcoming fiscal year, and a bailout to the nuclear industry would result in yet another increase on Pennsylvania’s taxpayers. The bailouts enacted recently in Illinois and New York provide a clear picture of what to expect the nuclear industry to push for in the Commonwealth.
For more information, visit the Citizens Against Nuclear Bailouts website.
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