On March 11, Rep. Tom Mehaffie (R-Dauphin) announced the introduction of legislation-- House Bill 11-- updating the Pennsylvania Alternative Energy Portfolio Standards (AEPS) Act to recognize nuclear energy for its significant contribution to the state’s zero-carbon energy production.
Even though Pennsylvania’s nuclear power plants generate 42 percent of the Commonwealth’s electricity and provide 93 percent of the Commonwealth’s zero-carbon electricity, nuclear energy has been excluded from Pennsylvania’s AEPS program, which currently recognizes 16 other forms of electricity generation.
Known as the Keep Powering Pennsylvania Act, House Bill 11 would amend Pennsylvania’s AEPS Act to include nuclear energy as a qualifying energy resource under a new Tier III.
The new third tier of AEPS will recognize the value that all zero-emission electric generation resources provide, including carbon-free nuclear energy. As is the case with the existing AEPS law, Tier III will include a structure that requires the purchasing of credits.
“While much discussion will occur in the coming months about costs, the cost of doing nothing is $4.6 billion, including $788 million annually in higher electricity costs to consumers, whereas the cost of this bill is approximately $500 million – that’s an 8-to-1 benefit-to-cost ratio,” Rep. Mehaffie said. “I see this situation as a win-win. Without nuclear energy, the typical residential electric bill will increase by $2.39 per month, but with nuclear energy, the typical monthly residential electric bill will only increase $1.77 per month, so the legislature can save Pennsylvania consumers money, keep our nuclear plants open and keep our air clean.”
Exelon Corporation announced plans to shut down Three Mile Island (TMI) by September 2019, and FirstEnergy Corporation said it plans to shut down Beaver Valley Power Station in western Pennsylvania in 2021 if current market flaws are not addressed.
The Nuclear Energy Caucus, a bicameral and bipartisan legislative body held hearings throughout 2018 with the key stakeholders to formulate a legislative solution.
“We’ve been working together with industry experts for many months on a comprehensive policy solution that levels the playing field for nuclear power while being mindful of consumers and taxpayers,” Rep. Mehaffie said. “The result is legislation, supported by labor groups, business leaders, environmental advocates and workers, that will preserve Pennsylvania’s nuclear energy plants and the clean, reliable energy and good-paying jobs they provide.”
Irreversible preparations for the shutdown process at TMI, however, would begin in June 2019, adding to the urgency for a legislative remedy.
“We can’t wait another day to act on this. The hourglass is running low and peoples’ paychecks and utility bills are at stake,” Rep. Mehaffie said. “It’s time we finally acknowledge nuclear energy for its long-term employment, economic, environmental and grid resilience benefits. Let’s Keep Powering Pennsylvania!”
Pennsylvania’s five nuclear power plants account for nearly 16,000 full-time jobs and provide $69 million in net state tax revenues annually.
Click Here for a video of Rep. Mehaffie’s announcement (Facebook).
Click Here for Rep. Mehaffie’s Keep Powering Pennsylvania Act webpage for a copy of the bill, a summary and other background information.
Sen. Ryan Aument (R-Lancaster), a co-chair of the Nuclear Energy Caucus, was expected to introduced a bill to prevent the premature closure of Pennsylvania’s nuclear power plants by the end of last week but did not.
Competitive Markets
Competitive Markets
Interestingly, at the same time as this announcement, an official from the PJM Interconnection, the interstate electricity grid operator, told 2 House committees electric competition in Pennsylvania has significantly reduced prices for consumers, the electric grid remains reliable and fuel secure even with expected power plant closures.
He said there was no action Pennsylvania needed to take from a grid reliability standpoint to maintain that reliability. Click Here for more.
Reactions
Andrew Williams, Director of Regulatory and Legislative Affairs, Environmental Defense Fund, issued this statement on the legislation--
The bill fails to address the immediate need to develop a durable strategy to clean up the carbon pollution from Pennsylvania's energy sector.
Placing a binding, declining limit on power sector carbon emissions that creates the opportunity for flexible, low-cost and efficient market-based solutions to achieve the limit will ensure Pennsylvania actually cuts pollution at the lowest cost while fostering investment in, and deployment of, zero emission electricity.
This is the foundation for any sustainable long-term energy strategy.
"It's time for Pennsylvania to focus on cost-effective policies to reduce pollution and figure out what their neighbors have already: clean energy solutions can be deployed at cost savings to customers. Pennsylvania must take concrete action to reduce its carbon emissions. It's the only state from Maine to Virginia without a limit on carbon pollution from the power sector, and today's proposed legislation will leave Pennsylvania even further behind.
“This is an expensive Band-Aid that saddles consumers with the majority of risk.”
Ten Pennsylvania environmental groups issued this statement on the proposal--
“Pennsylvanians need and deserve a forward-thinking, long-term strategy to fight climate change and invest in a clean energy economy centered around renewable energy. This legislation does nothing to advance the deployment of renewable energy in Pennsylvania and further locks us into increasingly expensive nuclear power from old and outdated equipment.
“Pennsylvania’s policymakers ought to be working to significantly scale up clean, safe and affordable renewable energy from wind, solar, geothermal and low-impact hydro power. Building a clean energy economy around renewable energy in tandem with a declining, enforceable limit on carbon pollution from power plants will reduce emissions significantly in Pennsylvania as well as create jobs and protect health and the environment.
“We urge Pennsylvania legislators to shift their focus from preserving the aging energy sources of the past and instead look ahead toward real climate solutions that will advance a clean energy future in our Commonwealth.”
The groups included: Sierra Club, Natural Resources Defense Council, Clean Air Council, PennFuture, PennEnvironment, Keystone Progress, Clean Water Action, Physicians for Social Responsibility Philadelphia/Pennsylvania, Conservation Voters of Pennsylvania and the Philadelphia Solar Energy Association.
AARP Pennsylvania State Director Bill Johnston-Walsh said the nuclear bailout bill would saddle consumers with unfair and unnecessary surcharge--
Johnston-Walsh said the legislation will unfairly raise rates for Pennsylvania utility customers to pay for electric power delivered to customers in 12 other states. The state’s nuclear plants currently sell electricity to the regional power grid which supplies 13 states, including Pennsylvania.
He added that Pennsylvania electric utility customers should not be forced to pay higher rates to benefit corporations already making millions in profits. Four out of five nuclear power generators in Pennsylvania are profitable according to their owners – and were projected to make a profit of more than $600 million, according to PJM Interconnection's Independent Market Monitor.
“Pennsylvania utility customers expect to pay fair and reasonable prices for electricity – and not a dollar more,” said Johnston-Walsh. “Our residents expect their elected leaders to protect their interests above the interests of already profitable nuclear power companies.”
Johnston-Walsh said AARP will continue to fight any proposed nuclear bailout legislation in the General Assembly.
The PA Chamber Of Business and Industry issued this statement on the proposal--
“This legislation – which would result in Pennsylvania immediately having the most coercive energy mandate law in the country – stands in stark contrast with our organization’s energy policy, which provides for supporting competitive markets and opposing government actions that force, subsidize or mandate energy choices.
“This policy was established by the PA Chamber’s board of directors, whose membership ranges across various commercial and industrial sectors. Not only would this legislation impose greater costs on Pennsylvania residents and businesses, it would also stifle private sector innovation in the energy sector and threaten the Commonwealth’s role as leader in energy production and manufacturing.
“Our organization opposed the original Alternative Energy Portfolio Standards Act out of concerns it would harm ratepayers and distort the market – which it very clearly has. As such, we must voice our opposition to this new proposal.
“By walling off nearly 70 percent of the market, Pennsylvania is in jeopardy of losing its position as the largest net exporter of power in the country. It is quite possible that the Commonwealth would end up importing power from other states with higher emissions footprints, in essence negating any environmental benefits associated with preserving one at-risk nuclear facility.
“Imposing further mandates on utilities and ratepayers are sure to increase costs – with some estimating that families and businesses would be forced to pay more than $1 billion a year in higher energy costs.
“In particular, it is estimated that Pennsylvania manufacturers in a variety of industries will see higher energy costs up to several hundred thousand dollars per year.
“The business climate in Pennsylvania is already challenging enough; the legislature should seriously consider whether it wants to layer another substantial cost to this sector and hamper our state’s ability to retain existing and attract new investment.
“Additionally, the Federal Energy Regulatory Commission recently directed PJM to adjust its electricity auction rules out of concern for the impact of state policies distorting the market.
“The General Assembly must be aware of the possibility that FERC will soon direct the grid operator to deduct the value of these state subsidies out of market payments, leaving the state in an even worse position – significantly higher energy costs with no tangible benefit.
“To be clear, we continue to support PJM’s proposed amendments to its energy market reserve pricing rules, which address some of the challenges identified by generators over the past several years.
“Pennsylvania’s competitive energy market has helped to lower energy costs, while at the same time reducing emissions throughout the Commonwealth.
“Rather than imposing additional mandates that will stifle innovation in the energy space, we are urging lawmakers to support thoughtful, durable and rational energy policy that focuses on a nationwide approach that relies on competitive markets and private sector innovation to help ensure the country’s energy security while at the same time reducing carbon and other pollutant emissions.”
Pennsylvania Coal Alliance Executive Direct Rachel Gleason released this statement in response to the nuclear power plant proposal--
“The Pennsylvania Coal Alliance strongly opposes any proposal that would inappropriately prop up one type of electric generation over another in our state, and do so at the expense of ratepayers, taxpayers and other producers of reliable electricity in the Commonwealth.
“Legislation that would provide subsidies or force utilities to purchase electricity that is more expensive than other sources is a disservice to individuals and businesses that pay energy bills, as well as to all the stakeholders involved in energy generation and distribution.
"Solutions to address any challenges presented by a multi-state, diversified grid that serves over 65 million people must be developed at the national level.”
Leaders of Nuclear Powers Pennsylvania welcomed the formal introduction of bipartisan legislation – known as the Keep Powering Pennsylvania Act – in the House of Representatives that would reform an existing state law to recognize the contributions the state’s nuclear industry makes throughout the Commonwealth.
“If you care about keeping electricity prices affordable, care about keeping good-paying jobs in Pennsylvania, and care about keeping harmful greenhouse gases out of our environment, then this is legislation you can feel good about,” said Bill McGee, Co-Chair of Nuclear Powers Pennsylvania and the business manager of Local 23 of the International Association of Heat and Frost Insulators and Allied Workers. “Our thousands of members across Pennsylvania are excited to see this legislation introduced, because it gets us one step closer to protecting our state’s valued nuclear fleet. Nuclear power is our state’s largest source of clean energy. It helps keep our energy costs low, all while keeping 16,000 jobs right here in Pennsylvania.”
“More than 600,000 rural Pennsylvanians living in 42 counties count on the reliability and affordability of electricity that comes largely from nuclear power,” said Frank Betley, President & CEO of the Pennsylvania Rural Electric Association. “It’s clear that nuclear power plays a vital role in Pennsylvania, especially in our rural communities that have long been invested in this carbon-free resource. Electric cooperatives are pleased the General Assembly is taking a forward-leaning approach in recognizing nuclear power’s positive contributions to the Commonwealth. We look forward to working on this bipartisan effort to secure the future of nuclear power in Pennsylvania.”
The AEPS approach was first detailed in a bipartisan report from Pennsylvania’s Nuclear Energy Caucus released in November 2018.
That report states, “Allowing any nuclear plant in the Commonwealth to close would have significant consequences for fuel diversity, resiliency, the environment, customers, and the state’s economy.” The impacts would be felt in both urban and rural parts of Pennsylvania.
According to economists at The Brattle Group, failure to address this energy imbalance will cost Pennsylvanians an estimated $4.6 billion annually. This includes:
-- $788 million in increased electricity costs;
-- $2 billion in lost state GDP;
-- $1.6 billion in carbon emissions-related costs; and
-- $260 million in costs associated with harmful emissions.
Click Here for the full announcement by the Nuclear Powers Pennsylvania group.
Click Here for the full announcement by the Nuclear Powers Pennsylvania group.
Leaders of Clean Jobs for Pennsylvania applauded the formal introduction of bipartisan legislation that would reform an existing state law to recognize the contributions the state’s nuclear energy makes throughout the Commonwealth.
“This legislation is important to the economic and environmental well-being of the entire state and in particular central Pennsylvania,” said Mike Pries, co-Chair of CJFP and a Dauphin County Commissioner. “Without its passage, Three Mile Island will be shuttered in September and our region will lose more than 600 full-time, family-sustaining jobs and thousands of supplemental jobs forever.”
“Passing this legislation is extremely important to the thousands of skilled craftsmen and women who work in Pennsylvania,” said Joe Gusler, President of the Central Pa. Building Trades Council and a co-Chair of CJFP. “With its passage 1,600 additional workers will be employed at TMI this fall performing maintenance on the plant. Those jobs don’t exist if the plant closes.”
Click Here for the full announcement by Clean Jobs for Pennsylvania.
Click Here for the full announcement by Clean Jobs for Pennsylvania.
Clean Jobs for Pennsylvania is a diverse coalition of business, labor, environmental, education, civic and local elected leaders who have come together to support the continued operation of Three Mile Island and the Commonwealth’s four other nuclear plants and the benefits they provide to their local communities.
(Photo: Three Mile Island, Dauphin County.)
[Note: This post will be updated as more information becomes available.]
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