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Pennsylvania's competitive electricity markets are good for business: Guest view

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The Three Mile Island nuclear plant, operated by Exelon Corp., is slated to close in 2019.
The Three Mile Island nuclear plant, operated by Exelon Corp., is slated to close in 2019. - (Photo / )

Comparing the potential closing of Three Mile Island to the recent closing of the Vermont Yankee nuclear generating station does not add up — especially for midstate businesses and consumers.

The energy and power generation markets in Vermont and Pennsylvania are very different.

Pennsylvania is home to a diverse mix of power generating resources, including natural gas, coal, renewables and nuclear. The diversity and competitive pricing are due in large part to a favorable, deregulated energy market that encourages investment in new, innovative and efficient power generation and the accompanying infrastructure needed to move energy and electricity to consumer markets. In fact, Pennsylvania is a net exporter of natural gas and electricity.

Even if TMI closes, Pennsylvania will still boast a diverse and robust power generation portfolio that will include four nuclear generating stations in Limerick, Beaver Valley, Peach Bottom and Susquehanna. Additionally, Pennsylvania added more than 1,800 megawatts of electricity last year, with construction underway on six additional natural gas-fired power generating facilities throughout the state.

Pennsylvania consumers will still have access to abundant and affordable electricity, and the midstate will survive. This forecast, of course, makes the assumption that policymakers continue to allow competitive markets to work for consumers.

Innovation and the emergence of abundant, domestic natural gas and renewable energy technology have allowed for a more competitive, robust marketplace. In any industry, innovation and technological advances — and the ability of a business to adapt to the current consumer and economic climate — determine who thrives, survives or goes off into the sunset. The nuclear industry failed to adapt, and now it wants all of us to pay up — again.

Corporations such as Exelon, which operates TMI, Limerick and Peach Bottom, already received nearly $9 billion from Pennsylvania ratepayers in additional payments as part of electric deregulation to prepare for increased competition.

In fact, in the 1990s and early 2000s, while nuclear corporations were raking in profits and boasting their power was "too cheap to meter," manufacturers throughout Pennsylvania were closing and tens of thousands of jobs were lost.

When the nuclear facility closed in Vermont, the state was woefully unprepared and lacked the power generating resources and infrastructure to ensure an affordable and reliable electricity market. Thankfully, Pennsylvania is not Vermont.

The cost of federal and state intervention in these markets would be catastrophic for all consumers.

Monitoring Analytics LLC, the independent market monitor for PJM Interconnection, the regional transmission organization responsible for the high-voltage electric grid for 65 million people across 13 states, including Pennsylvania, said the Department of Energy proposal would increase customers’ costs from $18 billion to $288 billion over 10 years.

Additionally, Industrial Energy Consumers of Pennsylvania, representing the large-scale industrial employers in the state, estimated that, based on average usage, hospitals could see electricity costs increase by as much as $600,000 annually. Can Penn State Hershey, Geisinger Health System and UPMC Pinnacle afford these increases?

Manufacturers could have energy costs increase by up to $2.8 million annually. For large manufacturers with multiple facilities, that total could balloon to more than $6 million in additional energy costs annually. How will this impact ArcelorMittal, Dura-Bond, Ames Companies and the many others?

It’s not only industrial users that would get hit with higher energy bills. Look no further than New York and Illinois, which have enacted multibillion-dollar nuclear bailouts.

In Illinois, estimates show that the nuclear bailout will cause Chicago’s city government, public schools and transit authority to incur additional costs of nearly $250 million over the next 23 years. Can Central Pennsylvania’s city governments and schools afford these massive cost increases?

Let’s call policy reforms at face value what they would actually be: a bailout for nuclear corporations that will increase energy costs for all Pennsylvania consumers. Just as we don’t need community leaders from Vermont meddling in our competitive electricity markets, Pennsylvania lawmakers should allow deregulation to continue without government interference.

Steven Kratz is a spokesperson for Citizens Against Nuclear Bailouts, a diverse coalition of Pennsylvania citizens’ groups, energy consumers, power generators and energy, business and manufacturing associations opposed to any federal or state effort to require consumers to pay higher energy bills to bail out the nuclear energy industry in Pennsylvania.

The group is responding to an editorial that appeared earlier on www.cpbj.com.

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Write to the Editorial Department at editorial@cpbj.com

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Comments

Dorrah March 16, 2018 7:50 am

I have gone through this blog post and the guest view about this topic was really outstanding. Recently we heard about lots of ups and downs in the Pennsylvania’s competitive electricity markets and now we can conclude that it is suitable for business. Nice share!! troubleshooting printer problems

Peter Puck January 14, 2018 10:48 am

Mark my words, if TMI is allowed to close, this is very short-sighted by our elected officials. Within 10 years, they will be looking to reopen TMI for the carbon free electricity it provides - at a bigger cost to the public (you) than if it never closed.

PA's decision not to subsidize Exelon's TMI nuclear power generation plant to stay open is ill advised. Other states are taking action to make sure their nuclear power plants stay open. PA would be well advised to do the same.

It has come to light in the January 2018 issue of Power Magazine that the New York Public Service Commission approved a "Clean Energy Standard", which subsidizes upstate nuclear power plants for their carbon-free power generation.

Illinois passed legislation called the "Future Energy Jobs Bill", which subsidizes nuclear power plants in that state for their zero-emission power.

Connecticut has modified its rules, allowing their nuclear power plant to sell up to 75% of its output in a competitive solicitation with other zero-carbon sources.

Ohio introduced a bill to set up a zero-emission nuclear resource program to help its nuclear power plants remain viable.

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