Think Tank

Nuclear plant bailouts will harm Pennsylvania consumers

Pennsylvania lawmakers will soon decide if a Bailout or Subsidy is awarded to the State’s nuclear power plants.  A Bailout will cost Pennsylvania consumers and businesses Billions in surcharges over a long period of time and an untold cost for an unwarranted interference in the competitive markets.

Exelon Corporation, Talen Energy and First Energy Corporation are actively seeking new, artificial payments outside of the competitive energy market.  Nuclear plant profitability has declined the last couple of years due to lower energy prices driven by the State’s abundant and low cost Marcellus Shale gas.  Despite the lower energy costs, only one plant out of five total has been targeted for shutdown, Three Mile Island.

Large energy intensive consumers like the Industrial Energy Consumers of Pennsylvania (IECPA) members support a wide and diverse base of electric generation plants including nuclear plants.  We do not support a Bailout of nuclear plants to extend the service life of these high cost plants while compromising the substantial investment of new, lower cost, higher efficiency gas generation plants.

For the 2001 through 2016 period, Pennsylvania manufacturers lost approximately 300,000 jobs or an unprecedented 34% of the manufacturing work force.  Significant energy cost increases played a substantial role in business leaving the State.  The expansion of the Marcellus Gas industry and lower energy costs creates a new opportunity to expand business and generate new high paying jobs for the benefit of all Pennsylvanians.

While Pennsylvania jobs were being lost, nuclear plants made unprecedented profits following the deregulation of the electric industry.  Market experts had expected energy prices to decline but just the opposite occurred.  Energy prices skyrocketed giving the low cost nuclear plants big profits.  In fact, consumers have already paid for these plants.  During this period, nuclear plant owners repeatedly praised the competitive markets as efficient and opposed any regulation to reduce energy prices.  Now, these same corporations no longer support a competitive market when their profits decline and seek new regulation to increase profits.

Arguments for a Nuclear Bailout focus on the carbon free emissions of operation, need to retain plants for reliability and job loss.  All three are flawed when you consider the long term maintenance of nuclear waste, large volume of new electric generation plants entering the market and the job creation opportunity ahead of us.

Pennsylvania has the opening to generate a new manufacturing renaissance to benefit all Pennsylvanians utilizing the low energy price advantage we have.  Pursuing a Bailout only increases costs for all, stifles innovation and will lead to a less effective outcome.

Michael K. Messer, President
Industrial Energy Consumers of Pennsylvania

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Allentown, PA 18102


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