Could legislative support be TMI’s salvation?

The nascent war of words comes as Exelon announced this week that TMI failed, for the third year in a row, to sell its power at a regional energy auction.

Exelon says that could result in the plant being retired early, which has the Chicago-based company “talking to stakeholders” about potential legislative remedies, said David I. Fein, the company’s vice president for state government affairs.

Fein said it is too soon to say what elements any legislation might take, but “anything and everything hopefully will be on the table for discussion.”

He also said the company has been looking at actions taken in New York and Illinois.

Those states have approved laws enacting “zero-emissions credits” programs, which effectively provide subsidies to nuclear plants as one part of a plan to reward generation facilities that do not create fossil fuel emissions.

Critics of such plans argue they reward aging and inefficient nuclear plants at the expense of other technologies, and violate the spirit of free-market competition.

A group in Pennsylvania known as the Citizens Against Nuclear Bailouts Coalition, which includes other players in the energy industry, is gearing up to fight any use of taxpayer dollars to subsidize nuclear power.

“As we have seen in other states, our coalition fully expects Exelon will attempt to exploit the auction results and a potential closing of TMI to justify a multibillion-dollar nuclear bailout that will result in higher energy costs for all Pennsylvania consumers, including senior citizens, manufacturers, small business and public institutions,” a statement released by the coalition said.

Steve Kratz, a spokesman for the coalition, said that the state’s other four nuclear plants have succeeded in selling their power at auction, and government action should not be taken to save one plant which is having trouble turning a profit.

The coalition’s members include the Pennsylvania Independent Oil & Gas Association, the Marcellus Shale Coalition and UGI Energy Services.

Exelon’s Fein said he could not speak for any of the state’s other nuclear operators, but said he believes a zero emissions credit program could be beneficial for the nuclear industry as a whole, and for the state’s environment.

“If we believe in the environmental benefits that (nuclear facilities) provide to the commonwealth – and those benefits are undisputed – all plants should be compensated for providing those benefits.”

TMI’s future

Why is the Dauphin County nuclear plant struggling? A key reason, Fein said, is that it is a single-unit facility. Unlike dual-unit plants, TMI is thus unable to spread its operating costs over a second unit and higher electrical output.

TMI Unit 1 opened in 1974, and was re-licensed in 2009 to operate until 2034. Unit 2 has been dormant since a partial meltdown in 1979.

Across the Susquehanna River in York County, Exelon also operates the dual-unit Peach Bottom Atomic Power Station. That plant has been more successful, and Exelon officials plan to submit a license extension application next year that would allow it to operate until the early 2050s.

TMI employs 675 people and has an output of 837 megawatts, Fein said. Peach Bottom employs 860 people and can produce 2,700 megawatts.

Compounding TMI’s problems, Fein said, has been a drop in energy prices in recent years.

Given current PJM commitments, TMI is obligated to operate until at least mid-2019, he said. After that, the company will look at all options, including a shutdown, but Fein said he hopes talks with state officials may lead to a solution.

He did not immediately know how long it would take to shut the plant down, or how much that would cost.

Neil Sheehan, a spokesman for the U.S. Nuclear Regulatory Commission, said plant owners have up to 60 years to complete decommissioning after a reactor is permanently shut down.

The company can opt for immediate dismantlement, long-term storage or a hybrid approach, he said, but if immediate dismantlement is chosen, that work usually takes from eight to 10 years.

“We would continue to oversee the plant until such time as the decommissioning work was completed,” Sheehan said. “We would not inspect as frequently as at an operating reactor. Nevertheless, we would be there for all major activities.”

Kratz and the coalition argue that whatever happens to TMI, Pennsylvania’s nuclear industry, and the state’s power generation infrastructure, are resilient and will continue to serve the region.

“You never want to see any business close,” Kratz said. “But at the same time, you have to look at the consequences – if (government) saves one business, what are the effects on every other business?”