Will Three Mile Island get bailed out by Pennsylvania?

MIDDLETON, Pa. - Three Mile Island. Those three words became infamous in 1979, when the nuclear power plant in Middletown, Pennsylvania suffered a partial core meltdown.

Now, more than 35 years later, the owner of the plant, Exelon Corporation, said the facility will close in 2019.

It seems on the surface to be a simple case of a business suffering losses and shuttering its doors. The story, however, runs much deeper, and embodies the constant debate in America about the role of government when it pertains to energy production, and the measures taken by companies to survive in a changing market.

On June 20, Exelon sent a letter to the Nuclear Regulatory Commission, notifying them that Three Mile Island will be closed in September, 2019.

“In the end, it was a financial decision,” Dave Marcheskie, senior communications manager for Three Mile Island, told WFMZ. “Over the past five years we've sustained losses of up to $300 million, and have really sustained losses over the last eight years.”

So, why are the losses so big?

1) Three Mile Island only has a single usable reactor since the accident of 1979. That has left them susceptible to more financial challenges than the many nuclear power plants with multiple reactors. Industry analysts say that plants with two or more nuclear reactors can produce power more cost effectively than those with a lone reactor.

2) Pennsylvania has become the second largest producer of natural gas in the country, behind only Texas. Abundant amounts of the cheap fuel have put significant pressure on other energy producers, including nuclear power plants.

3) This is where it gets complicated.

“There's a lack of energy policy here...that does not directly value the benefits that nuclear energy provides to Pennsylvanians,” according to Marcheskie.

When speaking to WFMZ, he chose his words carefully, but his point was clear. Exelon wants to keep Three Mile Island open, he said, but the plant will definitely close “without legislative action in Pennsylvania.”

“Legislative action”, of course, could take many different forms, but there are specific situations in the recent past that suggest the kind of policy prescription Exelon may be looking for. Last year, the governments of New York and Illinois approved significant subsidies to save several nuclear plants operated by Exelon, after the company said the facilities were in danger of closing.

“In New York and Illinois, those legislators respectively found the value and benefits in nuclear energy in those states,” said Marcheskie. “They're providing a subsidy in New York and Illinois to help sustain those economically challenged nuclear facilities.”

While exact calculations are impossible, the subsidies are expected to cost the average consumer in New York and Illinois about an extra $2 a month. Marcheskie called those a “minimal cost” and touted the environmental benefits of subsidies to keep nuclear power flowing, a source of energy which he describes as clean and safe. New York's Public Service Commissioner Gregg Sayre adopted a similar defense of the subsidies in his state, reportedly calling them “the right approach for fighting climate change in a responsible and cost-effective manner.”

When speaking to WFMZ, Marcheskie also vociferously argued that saving Three Mile Island would be saving the livelihood of hundreds of workers, who also contribute significantly to the economy of the surrounding areas.

“We're trying to protect jobs here,” he said. “We have 675 full-time employees...if Three Mile Island were to close in 2019, all of those jobs would be gone.”

What some people call a subsidy, others call a bailout.

“Consumers shouldn't be on the hook for poor choices made by corporations over the course of two decades,” said Steve Kratz, spokesman for Citizens Against Nuclear Bailouts.

He told WFMZ that the current troubles for Three Mile Island are the result of bad business decisions.

“That's on them. It's not on the ratepayers to pay for them to compete when they were collecting profits for the last two decades,” he said.

It is important to note who exactly Kratz's coalition represents. Citizens Against Nuclear Bailouts describes itself as “a diverse coalition of Pennsylvania citzens' groups, power generators, and energy, business and manufacturing associations”. Included among that group are several natural gas companies that are a competing source for electrical generation. When asked by WFMZ if the group would oppose all kinds of subsidies, to any energy companies, Kratz responded, “our organization is solely focused on the current topic, which is the discussion surrounding a nuclear bailout.”

The opposing viewpoints of Marcheskie and Kratz point to an intense lobbying battle that is only expected to escalate in Harrisburg. Earlier this year, some lawmakers from both parties in the Pennsylvania House and Senate formed a “nuclear energy caucus”. While a list of members has not been released, WFMZ has learned the caucus includes about 80 State Representatives and Senators. The mission of the caucus, according to one of its co-chairs Senator Ryan Aument (R-36), is to “give members of the General Assembly an opportunity to become more educated about nuclear energy’s economic and environmental value and provide another voice in other important discussions, including electric power reliability, affordability and safety.”

Exelon has already spoken to members of the caucus, who had differing opinions when they spoke to WFMZ.

State Representative Mike Schlossberg (D-132), who represents parts of Lehigh County, was skeptical when asked by WFMZ if he would support subsidies to the nuclear industry.

“I'm not saying no, but I'd be hard pressed to join in a movement to save it,” he said.

Schlossberg acknowledged that even though his preference is for wind and solar energy, he sees benefits to nuclear power. Still, he finds subsidies hard to justify philosophically.

“It's cheap, good for greenhouse emissions. But if they can't compete, they can't compete," he said.

State Senator Lisa Boscola (D-18), who represents parts of Lehigh and Northampton Counties, is also a member of the caucus. A spokesman told WFMZ that Senator Boscola would need to see a specific proposal before making a decision on any subsidies. According to her representative, Boscola believes it is very important for Pennsylvania to keep balance in its energy portfolio, but that she would want to know the likely impact on consumers, the grid, and jobs before getting behind any legislation.

A third member of the caucus, State Senator Mike Folmer (R-48), whose district includes the area surrounding Three Mile Island, took a broader view. A spokesman told WFMZ that Folmer thinks the playing field should be leveled for everybody, and that all energy industries should be treated the same way by the government.

Whether or not all industries will be treated the same way by the state of Pennsylvania is not clear. What we do know is that Three Mile Island is scheduled to close September 30, 2019, and that leaves a significant amount of time for the lobbying tug of war to continue in Harrisburg.

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