Nuclear bailout a legislative failure to electric consumers
Written by: Jason Fink, President and CEO of the Williamsport/Lycoming Chamber of Commerce. April 14, 2019
Many of you probably received the same letter that my wife and I did from the gentleman who worked for a nuclear power plant in Vermont that was closed. He detailed the hardship that it created and wrote of concerns he has for his family as it appears he’s facing a similar situation at a Pennsylvania nuclear power plant. Those receiving the letter were urged to send an enclosed card to Sen. Gene Yaw. The card cited the industry supported 16,000 jobs and the proposed legislation would keep our energy rates low by aiding the nuclear industry. This and other items mentioned are laudable.
However, the biggest issue that we, the Williamsport/Lycoming Chamber of Commerce, take with this position is that it doesn’t keep energy rates lower. It actually adds to the costs for business and industry along with the residential consumer. What they are proposing is to require 50 percent of the power utilized in Pennsylvania come from nuclear power. How will that requirement drive innovation and make the existing plants invest in upgrades if they know they will be receiving revenue? Such a proposal will stifle if not eliminate competition for the nuclear facilities.
In the letter, there was the push to have the Legislature address a fundamental flaw in the energy system. Those who support the current manner in which energy is distributed should not see this as a flaw because it is based upon the foundation of the free market system.
Their proposed legislation bypasses the current manner in which energy is purchased. The way energy is traditionally purchased is that on each day, PJM — the regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia — puts a call out for electricity and states what they anticipate needing and the price at which they will purchase it. Those who produce low-cost power, no matter the source, get purchased. Pretty clear cut. It also means that the newer electric producers and those that have kept their plants up to date with current technology usually get their electricity purchased first.
The nuclear plants don’t want to play in the system anymore. One of the primary reasons is that their plants have aged and they haven’t invested in the latest technology. Go down the road about 100 miles and look at TMI. The owners of the plant are getting ready to close it because it’s too costly to operate and they can’t sell their power anymore. They are not calling this a bail out. Instead it is a subsidy for clean energy. While the emissions from a nuclear plant are non-existent, to classify them as “green” is a stretch. The residual nuclear waste from maintenance and the spent or used fuel will need to be stored. It is definitely not green when compared to hydro, wind, or solar.
If the nuclear industry is able to get you to buy their story that they’ll keep these 16,000 people employed, you’ll be paying roughly $80-$100 a year if you are a residential consumer. However, if you’re a business, that number will be significantly higher. The other thing that they don’t share is that the 16,000 people also includes anyone who works in the general vicinity of the nuclear plant that includes business like the local restaurant. In actuality, the number of people directly employed in the nuclear industry is estimated to be more like 4,000 people. Very important if you’re one of those 4,000 people but not the 16,000 that they want you to believe. The other thing is that this additional fee that we’re paying is basically a subsidy to keep open plants that are owned by corporations that could easily afford to maintain their plants had they chosen to invest in them when the necessary maintenance was required. The remaining nuclear plants in Pennsylvania continue to be profitable. Unfortunately for those employed by them, they chose not to do this but instead spent their money elsewhere. Now they want us, the consumer, to pay for their years of neglect.
It should be stated at this point that the Williamsport/Lycoming Chamber of Commerce did work closely with the developers of the now operational Panda Patriot 834MW natural gas power plant currently operational in Clinton Township, Lycoming County. We also have several businesses that are directly involved in the natural gas industry. Before someone calls us out for assisting the natural gas industry, I would like to make a point very clear; the main reason we oppose any nuclear subsidy is because nuclear is more expensive than natural gas or coal.
At this time, I also need to put something else out there in front of you to ponder. Why is it appropriate to consider paying a subsidy to the nuclear industry when we’ve watched the rapid and steady decline of the retail sector here in our community, state and country, yet no one stepped forward to suggest we provide a subsidy to the retailers to keep their doors open and maintain employment for the tens of thousands of part- and full-time employees of these companies? Is it that we don’t value this type of work as much as someone employed at a nuclear plant? Greg Dudkin, president of PPL Electric Utilities, one of the largest utilities in the country said it best in a recent column: “This proposal, if adopted, will make Pennsylvania less competitive, impacting every electric customer in Pennsylvania and raising the average price of electricity in the state for years to come.”
There are many other reasons why this doesn’t make sense in light of the competitive, fair and cost-effective manner already in place for energy to be purchased and consumed. Pennsylvania residents and businesses don’t need to pay more in their electric bills when we’re providing a convertible energy resource that should help drive down what we pay for electric. We urge our elected officials to say no to this and allow the free market to play out when it comes to electric production.