Could the Three Mile Island nuclear plant be headed for premature closure?
Last week, no one bought a year’s worth of TMI’s electricity at a key energy-buying auction held by PJM, the regional transmission organization that coordinates the movement of power in all or parts of 13 states and the District of Columbia.
The PJM Capacity Auction is not the only place TMI owner Exelon can sell the plant’s electricity, but it’s a key and profitable one.
The results have led to speculation that Exelon may be considering closing TMI as it is considering doing at three of its nuclear plants in Illinois.
Asked if the plant was in a troubled financial situation, Ralph DeSantis, Exelon’s spokesman at TMI, issued this statement: “The fact that TMI did not clear the 2018-2019 auction makes it clear the plant’s economics are challenged.
“We will continue to work with the Commonwealth of Pennsylvania and stakeholders to improve market design to recognize the significant reliability and environmental value TMI provides.”
Asked if Exelon was seeking protective legislation from Pennsylvania state legislators, DeSantis replied, “We mean everyone involved in creating policy for environmental regulations and market regulations…could include legislators.”
Exelon’s corporate headquarters also addressed the situation after power at three of its nuclear plants, including TMI, were not purchased at the auction.
“Although capacity revenue in a single year is an important consideration in a plant’s long-term viability, it is just one of several factors Exelon will use to make decisions about its plants’ future operations,” Exelon said in a statement.
Said Exelon CEO Chris Crane, “We will consider auction results. along with other data points, including EPA’s Clean Power Plan, as we make decisions about the future of these critical long-life assets.”
In Illinois, Exelon has threatened to close as many as three of its money-losing nuclear plants because of competition from natural gas and subsidized wind energy.
Two of those three plants are in the PJM, as is TMI, and neither of the Illinois plants were competititive enough to sell electricity in the last auction in May 2014.
Exelon has sought support from Illinois legislators and one bill being considered would require the state's utilities to buy 70 percent of their power from "low carbon" sources such as that generated by nuclear plants. The utilities could offset that cost by charging ratepayers with a surcharge of up to 2 percent.
Eric Epstein of the clean-energy group Three Mile Island Alert had this to say about TMI’s shutout at the capacity auction: “Single reactor sites like TMI are more vulnerable to closure since they are unprofitable and require government and ratepayer subsidies.
“Several developments this summer have weakened the nuclear industry and wrought havoc on Exelon's corporate fortunes: EPA devalued nuclear's role in combating carbon emissions, three Exleon plants, including TMI, did not clear PJM capacity auctions, and the DC Public Service Commission nixed the Exelon-Pepco merger.
“TMI's shuttering creates long-term problems for the local community, and will intensify the shortfall in cleanup funding, and postpone the storage of high-level radioactive waste from spent fuel pools to dry casks.
“It's hard to imagine a scenario where Three Mile Island does not become a permanent nuclear garbage site in the middle of the Susquehanna River."
The increasing building of power plants fired by cheaper natural gas is clearly resulting in cheaper electricity being sold on the wholesale market.
Talen Energy announced recently that it would retrofit its coal-fired Brunner Island power plant along the Susquehanna River in York County so it can also burn natural gas.
On the other hand, owners of nuclear plants are hoping that the President Obama administration's Clean Power Plan to cut back on sources of carbon dioxide, such as coal plants, will raise the value of nuclear plants.
Says DeSantis, “Exelon is continuing its ongoing work to educate policymakers and others about the fact that markets are failing to properly value nuclear power’s environmental and reliability benefits and the need to find solutions that will correct that.”
In 2009, Exelon received a license extension from the U.S. Nuclear Regulatory Commission to continue operating TMI until 2034.
Exelon is the nation’s largest owner and operator of nuclear plants, with 22 reactors in 13 locations, including TMI and the Peach Bottom nuclear plant in York County.
TMI produces enough electricity to power 800,000 homes. The plant has 520 employees, the majority of whom live in Lancaster and Dauphin counties.