Read a draft of Pennsylvania’s nuclear bailout bill
Draft legislation aimed at helping Pennsylvania’s ailing nuclear industry would reclassify the plants as “zero emission energy” and create new requirements about how electric companies are to purchase power.
The draft bill, labeled “confidential” and dated Feb. 6, adds nuclear to the state’s Alternative Energy Portfolio Standard — requiring companies to purchase 50 percent of their electricity from a newly-created “tier 3” list of sources: nuclear, solar, wind, low-impact hydropower and geothermal.
The draft, obtained by StateImpact Pennsylvania, is being actively worked on by state lawmakers, and the specifics could change.
Rep. Thomas Mehaffie (R-Dauphin) said he and Sen. Ryan Aument (R-Lancaster) plan to introduce companion bills next Wednesday or Thursday.
“I can’t comment on a draft that’s three weeks old and has changed probably six times,” Mehaffie said. “I’m sure some things in there will be the same. It shouldn’t come out being being half-baked. That’s why we haven’t brought it out yet. This is a really, really serious bill. This has to do with a lot of different things: the economy of Pennsylvania, national security issues.”
The bill comes amid more than two years of intense lobbying on the issue in Harrisburg, as two of Pennsylvania five nuclear power plants are set to close early. Exelon is planning to shutter its Three Mile Island plant near Harrisburg this fall. FirstEnergy intends to retire its Beaver Valley plant ahead of schedule in 2021. The early closures are part of a broader trend across the U.S. as the industry has struggled amid slowing demand for electricity and competition from cheaper natural gas and renewables.
“While we can’t comment until we see legislation introduced, the principles outlined in the recent co-sponsors memo represent an important next step toward valuing the carbon-free energy that nuclear energy provides Pennsylvania,” said David Marcheskie, a spokesman for Exelon’s Three Mile Island nuclear plant. “The loss of these plants would cost the Commonwealth $4.6 billion annually in the form of increased pollution, higher electricity prices to consumers, lost jobs and reduced economic activity.”
The natural gas industry and other groups have been lobbying against the notion of a nuclear bailout, which they see as unnecessary and expensive. Steve Kratz is spokesman for Citizens Against Nuclear Bailouts, a gas industry-funded group.
“It’s still unclear what the problem the legislature is trying to solve is other than the corporate greed of three nuclear corporations that were projected to make more than $600 million in profits in Pennsylvania in 2018 and continue to dole out dividends to shareholders,” Katz wrote in an email.
Pennsylvania’s Alternative Energy Portfolio Standard contains two tiers. By 2021, companies have to purchase eight percent of their overall power from so-called “tier 1” renewable energy sources — a list including wind farms, low-impact hydroelectric plants, and methane converted from landfills. A second tier of energy sources – including converted coal waste and larger hydroelectric projects – are to make up 10 percent of energy purchases by the end of the timeline. Solar power is in its own category, and tops out at half a percent.
In addition to creating a new tier 3 mandate, the Feb. 6 draft bill keeps the current requirements for tier 1 and tier 2 sources, as well as the special solar carve-out.
“It’s certainly interesting and opens up a lot of lines of questioning,” said John Quigley, director of the Center for Environment, Energy, and Economy at Harrisburg University and a former state environmental secretary.
Quigley suggests the inclusion of solar, wind, low-impact hydropower and geothermal sources may not be as good for renewables as it first appears. They are already part of the existing tier 1 requirements. The draft bill duplicates that list in the new tier 3 category, and then adds several qualifying provisions — for example, the energy source may not have received any other kinds of tax credits or payments.
“This draft just seems purely focused on nuclear energy,” said Quigley. “Why add all that qualifying language? It would appear the intent is to take out everything but nuclear.”
In recent years, other states — including New York, Illinois, New Jersey and Connecticut — have used various, controversial mechanisms to give billions of dollars to prop up their ailing nuclear plants by recognizing them as a source of carbon-free power.