Nuclear Bailout in Pennsylvania – Fact vs. Myth
In 2018, nuclear power generators in Pennsylvania were projected to make more than $600 million in profits, according to data from PJM Interconnection’s Independent Market Monitor.
Former PJM Interconnection chief economist Paul Sotkiewicz released a report detailing his research around the high profitability of four of the five Pennsylvania nuclear power generators through at least 2028.
Although there is no need for a nuclear bailout, profitable nuclear corporations are pushing for legislative action that would hurt Pennsylvania’s most vulnerable citizens, including seniors and those on fixed incomes, as well as small businesses, manufacturers and school districts.
Pennsylvania’s nuclear power industry isn’t going away; it is making way too much money
Fact: In 2018, nuclear power generators in Pennsylvania were projected to make more than $600 million in profits, according to data from PJM Interconnection’s Independent Market Monitor.
A 2019 report, titled “The Market and Financial Position of Nuclear Resources in Pennsylvania,” offers a 10-year outlook that shows Pennsylvania nuclear power generators are projected to make more than $3.4 billion in profits. These plants include Limerick, Peach Bottom, Beaver Valley and Susquehanna.
In fact, Exelon recently applied to extend the license at its Peach Bottom Atomic Power Station through 2054.
Pennsylvania’s nuclear power industry is not at risk.
A nuclear bailout would force you to pay more for electricity
Fact: Bailout proponents claim that, to save money, you need to pay more to subsidize nuclear power plants that are making hundreds of millions of dollars each year.
What? It doesn’t make sense to us, either.
Bailout proponents claim the cost of doing nothing will be higher; however, the nuclear power industry as a whole isn’t going anywhere. Companies that were projected to make more than $600 million in profits last year aren’t going to close and certainly don’t need more money from ratepayers.
Additionally, recent bailouts enacted in Ohio ($150 million), Illinois ($230 million), New York ($583 million) and New Jersey ($300 million) will cost those taxpayers more than $1.2 billion in higher electricity rates EVERY YEAR. This is nothing more than a corporate cash grab.
A nuclear bailout isn’t about jobs; it’s about shareholders
Fact: The nuclear industry likes to claim bailouts are necessary to save “good-paying jobs.” If you need more evidence that nuclear bailouts are nothing more than a profit-hungry industry crying wolf, look no further than Ohio.
FirstEnergy Solutions, which spearheaded the push to secure more than $1 billion in public funds for a nuclear bailout in Ohio, said it was necessary to save “good-paying jobs” at the state’s two nuclear power facilities.
Now, FirstEnergy Solutions is trying to renege on its obligations to its union workers, including at its Perry Nuclear Power Plant in Ohio and the Beaver Valley Power Station in western Pennsylvania. Ohio state Rep. David Leland said it best when he told The Columbus Dispatch in August: “Obviously, FirstEnergy cares more about its friends on Wall Street than the workers at the two facilities.”
When it comes to seeking bailouts, nuclear operators do not have their hardworking employees in mind. They are more concerned with additional lining of their shareholders’ pockets.
Calling nuclear power an “alternative energy” to increase profits is a bailout
Fact: A subsidy that forces consumers to pay more for electricity so that nuclear corporations can increase their profits is clearly a bailout, no matter how it is derived or what it’s called.
A nuclear bailout would eliminate choice and increase consumer electricity bills significantly, year after year, INDEFINITELY, hurting Pennsylvania’s most vulnerable citizens, including seniors and those on low or fixed incomes, as well as small businesses and manufacturers.
Adding nuclear power generation as a new tier under Pennsylvania’s Alternative Energy Portfolio Standard essentially would reregulate the state’s competitive electricity markets by taking away choice and forcing consumers to buy nuclear energy — no matter the cost. Further, removing nuclear power generation from competition guarantees capacity and removes any need or incentive to innovate or prioritize efficiency.
Exelon, FirstEnergy Solutions and Talen Energy have publicly stated that they would not support legislation that is based on financial need, further exposing the true motives of these out-of-state corporations.
Nuclear power is not clean, renewable, alternative American energy
Fact: Nuclear power is not renewable energy. Carbon-free power production doesn’t take into account the negative environmental impacts of the entire life cycle of generating nuclear power. Uranium used to generate nuclear power is mined and is a finite, nonrenewable resource.
According to the Energy Information Administration, U.S. nuclear power generators purchased approximately 43 million pounds of uranium in 2017. Of that total, only 7% was produced in the United States and 93% came from other countries, including Russia, Kazakhstan and Uzbekistan.
To make matters worse, the United States lacks a plan or location to store spent fuel, meaning that radioactive waste is stored on-site at Pennsylvania’s five nuclear facilities, including 650 metric tons at Three Mile Island alone.
Pennsylvania’s rural electric cooperatives are not at risk
Fact: The Pennsylvania Rural Electric Association (PREA) has a small ownership stake in the Susquehanna Steam Electric Station, which PJM’s Independent Market Monitor projected would rake in a profit of more than $170 million in 2018. “The Market and Financial Position of Nuclear Resources in Pennsylvania” report projects Susquehanna will make more than $600 million in profits through 2028.
At an April Pennsylvania House Consumer Affairs hearing, Debra Raggio, Talen Energy senior vice president for regulatory and external affairs, when asked about the need for a subsidy, said: “Today, Susquehanna — our station, which is owned 10% by Allegheny Electric Cooperative — is making money. It is not a need base. We have not announced a shutdown.”
Talen Energy and PREA are setting lawmakers up so they can receive other ratepayers’ money to increase dividends to corporate executives and association members in Pennsylvania and New Jersey.
Three Mile Island’s closing will not impact consumers
Fact: PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity in all or part of 13 states, including Pennsylvania, has confirmed that the electricity grid will remain reliable and resilient, even with the planned closure of the cost-inefficient plants in the U.S. nuclear fleet.
Pennsylvania’s competitive markets are driving private investment in the growth of renewables, as well as 16 new natural gas power plants in operation or under construction in the state. These new plants will generate nearly 15,000 megawatts of power, drive nearly $14 billion in private investments and create more than 8,000 construction jobs.
Also, a 2018 Penn State University study concluded that electricity prices would not be impacted and the lights would stay on if the aging and uneconomical TMI and Beaver Valley nuclear power generating stations were to close as scheduled. In fact, the Penn State study concluded that prices could decline when nuclear capacity is replaced with lower-cost, more efficient power generating resources.
Decommissioning Three Mile Island could take at least a decade and require hundreds of jobs
Fact: Exelon’s business decision to close Three Mile Island is unfortunate for the employees and local community; however, the process of decommissioning TMI will require a complex construction project that typically lasts at least 10 years.
The plant cannot close until a specialized structure is built to store the 650 metric tons of spent nuclear waste fuel on-site, and many current employees will be involved in this process.
For example, New Jersey’s Oyster Creek Nuclear Generating Station is expected to take at least eight years to decommission using the facility’s $980 million decommissioning fund. In May 2018, Exelon said the majority of the remaining 400 employees at the site would continue to work at the plant during the decommissioning process.