POWER April 2017 - 62

NUCLEAR
March, the DOE does not have a complete
leadership team in place. Former Texas Gov.
Rick Perry was confirmed as energy secretary
on March 2, despite his previous position
in favor of abolishing the agency, but
he still has to fill many leadership positions,
which can take time. But the DOE doesn't really
have much to do with promoting nuclear
power, other than supporting research and
development.
The
Nuclear
Regulatory Commission
(NRC) can make life easier for the nukes, but
only at the margins. The industry's problems
are more economic than regulatory. The NRC
has few tools to deal with the economic impediments
to nuclear in wholesale markets.
Subsidies Offer a Lifeline
The industry has had some success at the
state level however. Both the Illinois and New
York bailouts were major wins for Exelon.
NEI also led a 2016 repeal of a 33-year-old
Wisconsin law banning new nuclear power
plants in the state, as Christine Csizmadia
described at the Platts conference. Even so,
there is no evidence of any serious interest
in actually building a new nuclear plant in
Wisconsin.
NEI's Korsnick told Wall Street analysts,
" New York and Illinois serve as examples to
other states that effective solutions are possible,
even in competitive markets. The nuclear
industry is sharpening the focus of its
advocacy efforts in other states where major
policy opportunities exist. "
Exelon's David Fein told the Platts meeting
about the Illinois and New York plant
rescues. In Illinois, the more difficult case,
a Republican governor and a Democratic
legislature were at war. Three years in, the
state still does not have an approved budget.
Exelon had to work with supporters, including
unions representing plant workers, on an
overall rescue package that included something
for almost every stakeholder, to move a
" New York and Illinois serve as examples
to other states that effective solutions are
possible, even in competitive markets. "
-Maria Korsnick, Nuclear Energy Institute CEO
bill through the legislature and win the governor's
signature.
New York was easier, Fein said. Powerful
Gov. Andrew Cuomo was able to take a regulatory
path to the nuclear rescue. His control
of the state public service commission eased
the way to a compromise satisfactory to most
of the interests in the state, although not to
the nonutility generators. It didn't require
state legislation.
Fein noted that efforts are underway in
Connecticut and Pennsylvania to rescue
threatened nuclear plants. In Connecticut, the
task is to protect the two awkwardly-named
Millstone units in the ISO New England
competitive market. That will take legislative
action. The UtilityDive website reported
in mid-February, " The legislation, yet to be
fully drafted, now only indicates it would
'provide a mechanism for zero-carbon generating
facilities to sell power to electric utilities.'
The Millstone plant, like other nuclear
facilities in organized markets, is challenged
by competition from cheap natural gas generation. "
In
Pennsylvania, where Ohio-based FirstEnergy
is trying to exit the merchant market
entirely, its two-unit Beaver Valley station in
historic Shippingport, Pa., is at risk, as is its
Ohio Perry plant. All are bidders into the PJM
Interconnection. Exelon's Fein said developments
in Pennsylvania are currently on hold.
Is a Carbon Tax the Remedy?
But state bailout programs, Exelon's Mudrick
and Entergy's Mohl agreed, aren't the
4. Low-carbon Illinois. Hundreds of nuclear power proponents rallied at the Illinois state
Capitol in support of the state's low-carbon portfolio standard. Courtesy: Exelon Generation
long-term answer. " Somebody has to make
it a priority at the federal level, " said Mohl,
advocating a nationwide carbon tax, suggesting
a $17/ton initial price, readjusted every
two years. If the feds-meaning Congress
and the Trump administration-can't come
up with a national solution, said Mohl, " it
will be relegated to the states and that cannibalizes "
the competitive markets, an entirely
undesirable outcome.
The day before the Platts nuclear conference,
a group of establishment Republicans-including
James Baker and George
Shultz, former secretaries of state; Henry
Paulson, former treasury secretary; and Martin
Feldstein and Gregory Mankiw, former
White House economic advisors-rolled out
a paper advocating a nationwide tax on carbon
dioxide emissions. They dubbed it, " The
Conservative Case for Carbon Dividends. "
They unveiled it in a New York Times op-ed
column. The tax would be coupled with a
rollback of the Obama administration's Environmental
Protection Agency (EPA) regulations
on power plant CO2
emissions.
The tax would start at a suggested $40/
ton and escalate over time. The paper argues,
" Mounting evidence of climate change is
growing too strong to ignore. While the extent
to which climate change is due to manmade
causes can be questioned, the risks
associated with future warming are too big
and should be hedged. At least we need an
insurance policy. "
The GOP graybeards' plan would require
major congressional legislation, perhaps including
a rewrite of the Clean Air Act's 1990
amendments. That's a real stretch.
Trump is deeply skeptical of global
warming science. Republicans have a traditional
aversion to anything labeled a tax.
Mainstream environmental groups are likely
to raise opposition to a rollback of EPA regulations.
David Doniger, long-time head of
climate programs for the Natural Resources
Defense Council, promptly responded to the
establishment GOP proposal, praising the
effort but saying, " The atmosphere needs a
guarantee, and that's why we need firm carbon
pollution limits in addition to carbon
prices. " ■
-Kennedy Maize is a long-time energy
journalist and frequent contributor to
POWER.
62
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POWER April 2017

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