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Pennsylvania lawmakers look to include nuclear in alternative energy standards

Highlights

Memo warns of permanent shutdown of state's nuclear plants

Potential bill could add nuclear to Alternative Energy Portfolio Standards

Washington — To save at-risk nuclear power plants from closing, Pennsylvania lawmakers will try to modify the state's alternative energy requirements to include nuclear power.

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A bipartisan group of lawmakers in the House of Representatives and Senate issued a memo Monday seeking more sponsors for the still-developing proposal. The memo contains few details about how the standards would change, but said the state's nuclear fleet is at risk if lawmakers do not act.

Exelon Corp. is planning to close the remaining 829-MW reactor at the Three Mile Island plant in Dauphin County, Pennsylvania, in September. FirstEnergy Corp. affiliate FirstEnergy Solutions Corp. is planning to shut down the 1,872-MW Beaver Valley plant in Beaver County in 2021. The memo warned that Pennsylvania's three other nuclear plants -- the 2,386-MW Limerick and 2,626-MW Peach Bottom plants owned by Exelon, and Talen Energy Corp.'s 2,620-MW Susquehanna Nuclear plants -- are "likely not far behind."

"To be clear, this shutdown process is irreversible, thereby guaranteeing the permanent loss of Pennsylvania's nuclear assets," the memo said.

Pennsylvania's Alternative Energy Portfolio Standards Act requires that 18% of the electricity supplied by the state's electric distribution companies and electric generation suppliers come from alternative energy resources by 2021. The AEPS has two tiers. The first includes solar, wind and low-impact hydro resources, and the second includes distributed generation, demand-side management and large-scale hydro resources.

The bill would modify the AEPS to "recognize nuclear energy for its significant contribution to this state's zero-carbon energy production." The memo said the state's nuclear power plants generate 42% of Pennsylvania's electricity and provide 93% of the state's zero-carbon electricity.

Representatives from the offices of senators John Gordner and John Yudichak, respective Republican and Democratic lawmakers that signed on to the memo, said the bill's final language is still in the works. They did not know when lawmakers would introduce the bill. Other lawmakers were not immediately available for comment Tuesday.

Governor Tom Wolf gave a budget address Tuesday, kicking off weeks of hearings and a step back from a regular legislative session schedule.

Making a change to the AEPS to include nuclear generation was one of several ideas floated in a November 2018 report on ways to help bolster the state's nuclear fleet as the sector faces market pressure from factors such as cheaper natural gas and slow demand growth.

Pennsylvania is the latest state with nuclear power plants to take steps to keep the facilities from closing. Illinois, New York and New Jersey each have zero-emission credit programs.

OHIO COULD BE NEXT

Ohio lawmakers could be next to take action. According to a February 1 report from The Bladein Toledo, Ohio, state House Speaker Larry Householder, a Republican, has indicated support for preserving Ohio's two nuclear power plants: FirstEnergy's 908-MW Davis-Besse and 1,268-MW Perry plants. The Davis-Besse plant is slated for closure in May 2020 followed by Perry in May 2021.

FirstEnergy Nuclear Operating Co., or FENOC, filed two license amendment requests with the Nuclear Regulatory Commission on Monday to address modifications needed to prepare for the Davis-Besse plant being permanently shut down and placed in a safe storage state.

"While we proceed on a clear path toward a shutdown and placement of our nuclear facilities in a safe storage state, we continue to believe that appropriate legislative relief is warranted to preserve the safe, secure, reliable and clean energy these facilities provide," Don Moul, FENOC's president and chief nuclear officer, said in a statement.

FENOC said it would withdraw the license amendment requests should it receive legislative relief and market reforms to keep the plant operating.

While details of the Pennsylvania bill are forthcoming, stakeholders are already indicating their positions on the idea.

Citizens Against Nuclear Bailouts, a coalition of citizens' groups, power generators, and energy, business and manufacturing associations, called on lawmakers to reject the proposal that they say will "essentially re-regulate Pennsylvania's competitive electricity markets by taking away consumer choice and forcing consumers to buy nuclear energy -- no matter the cost."

A group called Nuclear Powers Pennsylvania, which lists Exelon, FirstEnergy Solutions and local business associations as members, said a bill is needed to keep thousands of jobs in Pennsylvania and keep the state's air clean.

-- Kelly Andrejasich, S&P Global Market Intelligence, newsdesk@spglobal.com

-- Edited by Annie Siebert, newsdesk@spglobal.com