Three Mile Island’s future looks bleaker as it fails at power auction

• Marie Cusick
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  Marie Cusick was the Harrisburg reporter for StateImpact Pennsylvania.

The future of Exelon’s unprofitable Three Mile Island nuclear power plant looks even bleaker after company said today it failed at an annual auction for the future sale of its electricity.

In addition to TMI, Exelon’s Dresden and Byron plants (both in Illinois) did not clear in the 2021-2022 auction to supply the Mid-Atlantic and Midwest regional power grid, known as PJM Interconnection.

Failing to clear the auction means the plants are not able to produce power at a price the market is willing to pay. Exelon says TMI has been unprofitable for six years.

A year ago, Exelon said it would prematurely close the plant, which is near Harrisburg. It has one functional reactor after the other partially melted down in 1979. It is set to close in September 2019—15 years before its operating license expires. TMI employs about 675 people.

Like coal, the nuclear industry has struggled amid slowing demand for electricity and competition from a glut of cheaper natural gas and renewable energy.

In a press release, the company blamed “persistently low wholesale energy prices and market rules that treat polluting plants the same as emissions-free sources of power.”

In 2016, both New York and Illinois gave billions of dollars to support their nuclear energy industries by essentially broadening the definition of clean power. Yesterday, New Jersey’s governor signed legislation authorizing $300 million annually to rescue its nuclear industry.

Supporters of those efforts argue the current market system is designed around how to deliver the cheapest megawatt-hour of electricity in the short term, without accounting for the broader environmental benefits of carbon free power, as well as fuel supply diversity and reliability.

“We’re hopeful we’ll be successful in working to find a solution that properly values these attributes of nuclear plants, that the market and the market rules don’t currently allow for,” said David Fein, Exelon’s vice president for state government affairs.

Eric Epstein, of the nuclear watchdog group Three Mile Island Alert, opposes the nuclear bailouts, which he says waste money that could be otherwise be going to cleaner energy sources, like wind and solar.

“Nuclear plants that are smaller, like TMI, are extremely uncompetitive,” Epstein said. “This is a natural winnowing of the nuclear herd. You don’t continue to subsidize old, substandard plants in any other industry. I don’t think the [Pennsylvania] legislature will do a subsidy for nuclear.”

Last year, state legislators formed the bipartisan Nuclear Energy Caucus, which has been examining ways to address the issue. It has held a number of hearings but has not yet taken any concrete action. On Wednesday, members heard testimony from labor leaders about how important the plants are to local workforces.

Joe Gusler, president of the Central Pennsylvania Building & Construction Trades Council, said Pennsylvania’s plants help employ 16,000 workers, including those that work at companies that supply the plants. He said those jobs are in jeopardy if there’s no help from the state.

“I bet the members of the PA House and Senate would jump at the opportunity to help if I said we were creating 16,000 new jobs in Pennsylvania,” he said. “What we are asking for is your help in saving 16,000 good paying jobs in Pennsylvania.”

The point of no return for Three Mile Island is likely at the end of this year. The company would need to order more fuel about 10 months in advance.

“We don’t anticipate this is a matter the legislature is going to consider in calendar year 2018,” Fein said. “That puts us on a tight time frame for doing something that would stave off the retirement of TMI.”

 

StateImpact Pennsylvania reporter Reid Frazier contributed to this story.

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