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Presenters At Senate Nuclear Power Hearing Agree: Putting A Price On Carbon Would Solve Nuclear’s Issues; PA Has Most Expensive Proposal To Support Nuclear Power

If there was one thing presenters agreed on at the April 10 hearing by the Senate Consumer Protection and Professional Licensure Committee, finding a mechanism to put a price on carbon emissions from all energy generation would solve the problem of appropriate pricing of energy produced by nuclear power plants.

Committee members were also told the potential solution to the nuclear power price issue suggested in Senate Bill 510 (Aument-R-Lancaster) that would add nuclear power plants to the Alternative Energy Portfolio Standards is the most expensive of any proposed by the 3 other states adopting programs to support nuclear energy.

The Senate hearing was the second this week on nuclear power issues. The House Consumer Affairs Committee held the first of 4 hearings on House Bill 11 (Mehaffie-R- Dauphin), a similar bill in the House, on April 8.

Kristy Hartman, Program Director, and Dan Shea, Policy Associate, from the National Conference of State Legislatures told the Committee Senate Bill 510 would be the most expensive proposal for providing financial support for nuclear power plants, compared to the 3 other states who have adopted programs to support nuclear power.

Senate Bill 510 would provide support to all 9 reactors in the state, compared to Illinois, New Jersey and New York where their programs require plants to demonstrate the need for the financial support.

Debra Raggio from Talen Energy, owner of the Susquehanna Nuclear Plant, told the House Consumer Affairs Committee her company would not have supported House Bill 11, which applies to all Pennsylvania nuclear plants as dones Senate Bill 510, if it was based on financial need.

NSCL estimated the cost of Senate Bill 510 to be $550 million/year, compared to New York at $482 million/year, New Jersey at $302 million/year and $235 million/year in Illinois.

The estimated cost of House Bill 11 was in the same $500 million range.

Kathleen Barron, Senior Vice President, Government & Regulatory Affairs, Exelon, told the Committee, “Fossil generators have the luxury of having the costs of their pollution borne by society so they do not have to factor those costs into their market offers. This means that a market offer from a fossil generator appears artificially lower than it should be, because the cost of emissions is not factored in, which makes non-emitting generators appear more expensive even though they aren’t,” said Barron.

[Note: Not mentioned was how the 7,560 metric tons of high-level radioactive waste fuel now stored at Pennsylvania’s nuclear power plants would be dealt with if one or more nuclear power plants closed. High-level radioactive waste from nuclear power plants is a federal government responsibility at public expense.

[Exelon filed a required decommissioning plan with the Nuclear Regulatory Commission on April 5 saying it would not begin dismantling Three Mile Island if it did close for 55 years. Spent radioactive fuel would be moved to a new dry cask storage facility onsite by the end of 2022.

[A federal bankruptcy judge recently rejected FirstEnergy’s bankruptcy plan in part because it would have allowed the company to walk away from its responsibilities for its coal and nuclear power plants, including Beaver Valley in Pennsylvania.]

Presenters from Exelon, Talen and FirstEnergy Solutions all agreed, however, that putting a price on carbon would allow energy sources to compete on a level playing field and would solve their problem by more properly pricing the attributes of power produced by nuclear energy.

Glen Thomas, former Chair Public Utility Commission, said many of the comments he made on House Bill 11 apply to Senate Bill 510 saying it is a fundamental change to Pennsylvania’s energy policy that moves away from competitive markets and having customers in charge and returning to a command and control approach of mandating where 68 percent of electricity comes from in the state.

Thomas noted as a part of the transition to competitive markets starting in 1996, ratepayers already paid nuclear power plant owners $8.6 billion in so-called stranded costs.

He said there are better ways to deal with these issues, suggesting having a conversation about putting a price on carbon would allow competitive markets to work.

Thomas said the state doesn’t pay people for not polluting as Senate Bill 510 and House Bill 11 would do. He said if a pollutant is the problem, we should deal with the pollutant through environmental policy.

He said if the objective is to address carbon pollution, the General Assembly can do it without destroying Pennsylvania’s competitive energy market.

“Pennsylvania has historically regulated pollution from power generators by directly regulating the pollutant at the source or putting a price of the problematic pollution,” said Thomas. “If the General Assembly is motivated to address carbon, then it should have a thoughtful discussion similar to the ones had with other pollutants from the power industry and develop a regulatory strategy that does not destroy 20 years of hard work to create a competitive electricity market.”

David J. Spigelmyer, President, Marcellus Shale Coalition, said, “To be clear: the MSC and its member companies recognize the importance of reduced air emissions across the board. While the MSC does not represent any power generation facilities, our member companies are incredibly proud of the role that natural gas has played in cleaning our air and helping to lead the world in historic carbon emission reductions.

“Additionally, carbon dioxide emissions in Pennsylvania from the electric power generation sector are down 30 percent since 2005 (through 2015). This is overwhelmingly attributable to the increased use of natural gas.

“Recognize that the long-term policies laid out in our Competition Act – more than two decades in the making – have worked to the benefit of consumers and our shared environment.

“Upending the markets by picking winners and losers, as the proponents of this legislation would have you do, risks significant jobs and private capital investment in our Commonwealth, and gives credence to many across the nation that Pennsylvania is not open for business.

“It is why this legislation is so vocally opposed by many consumer voices, including AARP, the Industrial Energy Consumers of Pennsylvania, the Pennsylvania Chamber of Business and Industry, the Pennsylvania Manufacturers Association, to name a few.”

Click Here for copies of written testimony and to watch a video of the hearing (when posted). Here are links to the written testimony available at this time--

-- Kristy Hartman, Program Director, National Conference of State Legislatures

-- Dan Shea, Policy Associate, National Conference of State Legislatures

-- Kathleen Barron, Senior Vice President, Government & Regulatory Affairs, Exelon

-- Steve Brame, Vice President, Public Affairs & Member Services, PA Rural Electric

-- David J. Spigelmyer, President, Marcellus Shale Coalition

-- Glen Thomas, former Chair PUC, President, GT Power Group

Additional written testimony has been provided to the Committee by: Gov. Ed Rendell.

Sen. Tommy Tomlinson (R-Bucks) serves as Majority Chair of the Consumer Protection Committee and can be contacted by calling 717-787-5072 or sending email to: rtomlinson@pasen.gov. Sen. Lisa Boscola (D-Lehigh) serves as Minority Chair and can be contacted by calling 717-787-4236 or sending email to: boscola@pasenate.com.

Next House Hearings

The tentative agendas for the 3 other hearings scheduled in the House include--

-- April 15: Electric power generators and resources, Room 140 Main Capitol, 9:00. Click Here for agenda;

-- April 29: Electric utilities, suppliers, consumers, organized labor, Room 205 Ryan Building, Noon; and

-- May 6: Regulators of the electric market, industry, Room 140 Main Capitol, 11:00.

Agendas are subject to change, but indicate the types of witnesses the Committee intents to hear from on this issue.

Rep. Brad Roae (R-Crawford) serves as Majority Chair of the Committee and can be contacted by calling 717-787-2353 or sending email to: broae@pahousegop.com. Rep. Robert Matzie (D-Beaver) serves as Minority Chair and can be contacted by calling 717-787-4444 or sending email to: rmatzie@pahouse.net.

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