This page was last updated 1/25/21.
The nuclear industry in Ohio, Illinois, New York, and New Jersey were able to successfully secure subsidies to bail out uneconomical plants.
Currently the New Jersey Board of Public Utilities is considering a three-year extension of $300 million in zero emission credits for nuclear power operators. In Illinois, Exelon is expected to push for new subsidies for additional nuclear plants that were not included in the initial legislation. FirstEnergy and spinoff company, Energy Harbor are embroiled in an FBI investigation for its role in an alleged $60 million bribery scheme involving the Ohio Speaker of the House and House Bill 6, which provided subsidies to nuclear power operators. Potential legislative activity could begin in Ohio this spring.
Instead of a direct subsidy bailout In Pennsylvania, in 2019, the nuclear industry approached the Pennsylvania legislature to request an alteration to the Alternative Energy Portfolio Standard allowing nuclear, as a zero carbon emitter, to be included.
PCIC is engaged with a coalition of businesses, utilities, consumers and manufacturers opposing any action to subsidize nuclear power because of the electric market impacts and associated costs. PCIC sent a letter to the Pennsylvania Legislature to voice opposition to House Bill 11 and Senate Bill 510. This proposed legislation would increase all consumer electric bills, including those of the state’s chemical and petrochemical manufacturers.
According to an analysis by the Industrial Energy Consumers of Pennsylvania, if nuclear power generation were to be added to the Alternative Energy Portfolio Standard, the state’s industrial consumers would face at least $192 million in additional electricity costs annually.
Small manufacturers could annually pay an extra $60,000 on average, while larger manufacturers could see a nearly $2 million annual increase in electric costs. Large manufacturers with multiple facilities could face a nearly $4 million annual hike.
The legislation did not pass and there were limited attempts to advance nuclear subsidy legislation in the 2020 legislative session. However, in 2020,the industry set sights on pushing a carbon cap and trade program or Pennsylvania joining the Regional Greenhouse Gas Initiative (RGGI) in an attempt to layer costs on the natural gas and coal industries, making nuclear more competitive. These additional costs would be pushed down on Pennsylvania consumers, including manufacturers. In addition to higher energy costs, there are concerns that the nuclear industry may try to carve out a portion of the RGGI credit proceeds in the form of a direct subsidies. In other states proceeds have been used to support energy efficiency, vehicle electrification and consumer offsets.
In addition to RGGI, 2020 was a down year for the economy as a whole, including all power generators. Record low wholesale power prices, combined with a reduction in power demand caused by numerous state lockdowns, resulted in significant losses for many power generators, including nuclear. While the pandemic has impacted everyone, nuclear operators may use reported losses and its clean energy messaging as a platform to make another run at pushing nuclear subsidies in Pennsylvania.
PCIC will keep the membership updated on this issue as it evolves when the legislature returns in September.
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