Pennsylvania Nuclear Subsidy Proposal Gathers Differing Opinions

16 May, 2019 | Blogs

The United States’ second largest nuclear-power-producing state Pennsylvania, is in the public policy battle to keep its retiring five nuclear power plants operational for the upcoming years. 

Lower-priced natural gas generators and renewable energy in wholesale power markets and the increased use of renewable energy have marked running nuclear power plants as uneconomical. Two of the five plants are scheduled for closure even earlier than expected.

Over the last few years, Neighboring states such as New Jersey and New York have secured subsidies from policies for their nuclear industry. While Ohio is also seeking a similar bill.

The state currently acquires 42% of its power from a nuclear source. It also accounts for 93% of Pennsylvania’s carbon-free electricity. 

Tom Mehaffie, the representative of the State, recently introduced a bill that would help compensate the state’s nuclear facilities in an effort to keep them running. 

This proposed bill will expand the state’s Alternative Energy Portfolio Standard, creating a third tier to the state’s renewable energy standards. 

Mehaffie advocates the bill saying that it will cost taxpayers around $500 million in total. However, it would still be less than the $4.6 billion loss for the state in higher electric bills, lost jobs, tax revenue, and other factors if the facilities close. 

If the bill is approved, a standard residential customer would have to pay an additional $1.80 per month or $2.50 a month increase with nuclear plant shutdowns. 

Though the minute details remain undetermined, the University of Pennsylvania's Kleinman Center for Energy Policy computes yearly payments to the plants could cost around $981 million.

Proponents of the bill argue that closing all the state's nuclear plants would cost Pennsylvania $788 million annually in electricity cost increases and $2 billion annually in state GDP.

The deadline for a decision is currently set for June 1, 2019. Legislators will have to move quickly to preserve the state's nuclear generation as operator Exelon has already threatened to begin shutdown procedures at its Three Mile Island plant.

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