PPL Electric Utilities Corp., which serves roughly 1.4 million customers in 29 counties in central and eastern Pennsylvania, isn’t supporting a nuclear subsidy measure proposed by state lawmakers looking to rescue the commonwealth’s financially struggling nuclear power plants.
“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,” says Greg Dudkin, president of PPL Electric Utilities.
Dudkin is referring to Pennsylvania House Bill (HB) 11, which was introduced on Monday by Pennsylvania Rep. Tom Mehaffie (R-Dauphin) to amend the state’s Alternative Energy Portfolio Standards (AEPS) Act.
“As president of one of the largest electric utilities headquartered here in Pennsylvania, I must respectfully ask the General Assembly to seriously consider the broad impact and the unintended ramifications this aggressive proposal would have on all 1.4 million customers served by PPL Electric Utilities,” Dudkin wrote in a March 9 op-ed published in The Morning Call, an Allentown, Pa.-based daily newspaper having the largest circulation in the Lehigh Valley.
Specifically, HB 11 would “recognize nuclear power for its significant contribution to this state’s zero-carbon energy production,” Rep. Mehaffie said.
Pennsylvania’s nuclear power plants generate 42 percent of the Commonwealth’s electricity and provide 93 percent of its zero-carbon electricity, but nuclear energy has been excluded from the AEPS program, according to a Feb. 4 bipartisan House and Senate Co-Sponsorship Memoranda.
The joint memo, released to all House and Senate members, seeks their support as cosponsors of HB 11.
“Unless we address this inequity, Three Mile Island will shut down in October 2019, Beaver Valley will shut down in 2021, and the Commonwealth’s three other nuclear power plants are likely not far behind,” the memoranda states. “To be clear, this shutdown process is irreversible, thereby guaranteeing the permanent loss of Pennsylvania’s nuclear assets.”
HB 11 essentially would delay such early retirements of nuclear plants across the state by rewarding them for generating electricity sans hazardous gas emissions.
But, asks PPL Electric’s Dudkin, why should electric customers subsidize nuclear generation?
HB 11, he said, would require electric utilities to purchase as much as 50 percent of customer demand from nuclear energy as part of a new mandate under the state’s AEPS Act.
In turn, Dudkin wrote, “we have estimated that our customers, alone, will pay $130 million more each year to rescue a single energy source that already benefits from an existing robust market.”
At the same time, PPL’s parent company, Pennsylvania-based PPL Corp., already is making headway with its clean-energy efforts, Dudkin wrote, and plans to reduce carbon emissions some 70 percent by 2050 over 2010 levels.
Additionally, he noted, PPL Electric Utilities has started several projects that will incorporate more carbon-free energy sources onto its grid, including solar.
“No one disputes that nuclear energy is carbon-free, but don’t confuse narrow nuclear subsidy proposals with efficient and effective economy-wide, market-based efforts to move the state toward a low carbon future,” wrote Dudkin.
Nevertheless, according to the lawmakers’ memoranda, allowing Pennsylvania’s nuclear power plants to succumb to failed energy market policies would cost Pennsylvanians an estimated $4.6 billion annually in combined electricity cost increases, lost state GDP, and in costs associated with both carbon emissions and harmful criteria air pollutants.
“Pennsylvania cannot stand by and watch all of these benefits disappear as nuclear power plant after nuclear power plant prematurely retires,” according to the memo, which noted that state lawmakers can’t wait for either members of Congress nor the operator of the regional interstate electric market to institute policy solutions.
PPL’s Dudkin said that if electricity customers are asked to bear the burden, then regulators should have oversight.
“As a regulated utility, PPL Electric Utilities is required to open its books to the state’s Public Utility Commission and demonstrate a financial need before we can adjust the rates we charge to customers,” he wrote in the op-ed. “Nuclear plant owners who are asking our state government to give them customer-funded financial assistance should be required to do the same.”
Dudkin pointed out that recent draft policy proposals don’t include such a “much-needed requirement.”
Noting that the controversy isn’t new and has been at the state policy table for more than two years, Dudkin also cautioned Pennsylvania lawmakers against acting swiftly to pass HB 11.
“Lawmakers should not fall for the ‘crisis’ label that has been intentionally created by the bill proponents,” he wrote in his opinion piece. “I ask that lawmakers take their time in properly vetting this issue through the process — hold hearings, call in all stakeholders and most importantly, demand numbers from those advocating for this measure. Consider seeking independent audits or financial verification from outside resources available to the General Assembly.”
In the end, Dudkin added, lawmakers should “strongly consider whether hiding a nuclear bailout in customers’ electricity bills is necessary and the best course to moving Pennsylvania forward.”