Thursday, May 24, 2018

FirstEnergy Nuclear Power Plants Fail To Clear PJM Power Auction

FirstEnergy Solutions Thursday announced none of its nuclear power plants-- including Beaver Valley in Pennsylvania-- cleared the PJM capacity auction.  
"The auction results that PJM announced on Wednesday are as unfortunate as they are unsurprising," said FES President Don Moul.
He noted that none of FES's three nuclear plants – with combined capacity of 4,048 megawatts – received a commitment in the auction, and that a total of 7,400 megawatts less nuclear capacity cleared in this year's auction than last year's.
"That is 7,400 megawatts of highly-reliable, resilient, clean nuclear power, the majority of which will be replaced with a mix of generation that is less resilient and more carbon-intensive," Mr. Moul said.
The result of the current auction reveals that there will be "constraints," and thus higher prices, in the ATSI (American Transmission Systems Inc.) zone in Ohio, where FES has announced plans to deactivate two major nuclear power plants – the Davis-Besse Nuclear Power Station, in 2020; and the Perry Nuclear Power Plant, in 2021.
The base clearing price in the auction was $140 per megawatt-day. The clearing price in the ATSI zone was $171.33.
"This situation is a call to action for policy makers in Ohio and Pennsylvania to take effective action to support these important base-load nuclear power plants that can and should operate for many years into the future," Mr. Moul said. FES has also announced the deactivation of its nuclear power plant in Pennsylvania, the Beaver Valley Power Station, in 2021.  
"Other states in the PJM region and elsewhere have developed policy solutions to keep their nuclear plants in operation – most recently, New Jersey," Mr. Moul said, adding, "FES is committed to working with policy makers to find creative solutions to make this happen in Ohio and Pennsylvania as well."
PJM has previously stated that the deactivation of the FES nuclear power plants in Ohio and Pennsylvania will have no effect on the reliability of the electric power grid to provide sufficient power when needed.  
"While that finding may address the mere availability of bulk power sources in PJM, it fails to address other key attributes of these plants, such as fuel resilience, an issue PJM is separately reviewing" Mr. Moul noted.
This auction, importantly, tells a story of how electric power customers will be affected by the loss of these major electric power generation assets.  
Deactivating more than 2,000 megawatts of reliable and resilient power generation from the Ohio plants because they do not receive fair and adequate compensation for the power they produce will produce the effects this auction is showing in the ATSI zone.
The loss of these nuclear power generating plants will have a range of adverse impacts:
-- Higher costs for electric power capacity in ATSI, as demonstrated by this auction;
-- Need for upgraded and/or new transmission lines to bring replacement power into the constrained region, ATSI – facilities that will earn a guaranteed rate-of-return paid by ratepayers;
-- Replacement power that will almost surely come from fossil fuel plants that, unlike the nuclear plants, are not emission free; and from power plants outside Ohio, substantially increasing Ohio's dependence on out-of-state electric power supplies; and
-- Loss of large numbers of high-paying jobs and revenue for the communities in which these plants operate.
(Photo: Beaver Valley Nuclear Power Plant.)
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