A fast-tracked Trump administration proposal and a separate plan by regional grid operator PJM Interconnection could boost the financial fortunes of struggling nuclear and coal power plants, including Three Mile Island.
Both would raise the cost of electricity for consumers.
TMI owner Exelon has said it will close the nuclear plant in the fall of 2019 — 15 years before its license expires — unless it gets financial help, similar to the subsidizes wind and solar power sources receive.
Exelon says nuclear energy has similar environmental benefits, including no releases of carbon dioxide, a gas most scientists say is a key factor in climate change.
The U.S. Department of Energy has asked the Federal Energy Regulatory Commission to approve new rules that would subsidize nuclear and coal plants, as well as some hydroelectric plants.
Action on the plan is expected by Dec. 11.
The rationale for subsidies under the plan is that such power plants are less likely to face a disruption in generating electricity and are needed for the nation’s power supply to maintain “reliability and resiliency.”
Meanwhile, PJM, which controls power distribution and pricing in 13 states and has opposed the federal tariffs plan, announced its own market reform plan on Nov. 15.
It would change its rules to allow so-called “inflexible” power plants like coal and nuclear — which can’t quickly scale power up and down — to set energy prices, as gas-fired plants and other sources have done under current rules.
An “optimal mix of resources” is needed to power production in the long term, PJM said.
The costs of electricity would likely rise 2 to 5 percent under the plan, PJM said.
In recent years, wholesale prices have been largely dictated by gas-fired power plants, and nuclear and coal plants have had a hard time competing.
The PJM plan would have to be approved by FERC.
State efforts stalled
While FERC weighs the federal proposals, efforts at the state level have made little progress.
Some Pennsylvania legislators, including state Sen. Ryan Aument of Landisville, have formed a pro-nuclear energy caucus to try to keep TMI running.
But the Nuclear Energy Caucus has not met in months. No legislation has been forthcoming on a discussed proposal to give nuclear plants in Pennsylvania financial credits for zero-carbon emissions.
On Oct. 25, however, the state House and Senate both voted overwhelmingly to approve an Aument resolution urging FERC to swiftly adopt the proposal by the federal Department of Energy.
Tariff on ratepayers
Under the DOE’s proposal, regional transmission organizations such as PJM would be required to establish tariffs on ratepayers to cover the costs of generating power at coal and nuclear plants, and allow them to make a “fair” profit.
The rule, if approved, would also reverse the competitive power market that was established in the late 1990s when the electricity industry was deregulated. Since then, electricity has been purchased on the basis of who could provide it the cheapest.
Power plants that run on natural gas are the current benefactors.
Lancaster County’s congressman, U.S. Rep. Lloyd Smucker, had no comment on the DOE proposal, spokesman Bill Jaffe said this week.
At the state level, a spokesman for Aument answered affirmatively when asked if the federal proposal could save TMI.
“I would guess it would keep TMI open,” said the spokesman, Jake Smeltz.
Illinois-based Exelon said it was “pleased” to see the federal initiative and is working with FERC on the proposal.
“Absent action at the federal level, other measures at the state level, such as zero-emissions credit programs that promote zero-carbon energy and create and preserve clean-energy jobs, will be necessary for Three Mile Island to remain operational,” said Exelon spokeswoman Robin Levy.
Lots of opposition
But there is strong opposition to the federal DOE proposal.
Consumer and environmental groups, and the gas industry, for starters, have decried the plan, which they say would hike electric bills for everyone and prop up polluting fuel sources that are no longer competitive.
“Survey after survey shows that Americans want more clean and safe renewable energy and there is very little support for perpetuating the old, unsafe and dying coal and nuclear industries,” said Tim Judson of the Nuclear Information and Resource Service, which recently filed 10,000 comments with FERC against the proposal.
Reaction to PJM plan
The more recent PJM proposal, meanwhile, has already drawn the ire of the environmental group PennFuture.
Since PJM’s own studies have shown coal and nuclear plants aren’t needed to ensure adequate power supplies, they should be allowed to go out of business, the group said, rather than force ratepayers to subsidize them.
PJM Interconnection recently had filed comments on the DOE plan, saying that guaranteeing to cover the costs of running nuclear and coal plants is not the right approach.
But PJM did agree that reliability, resilience and fuel security concerns are valid in the face of rapidly changing power sources and need to be addressed.