Subsidies are in the spotlight as fossil fuel industries hammer proposed Pa. nuclear deal

By: - April 16, 2019 7:10 am

Two of Pennsylvania’s five nuclear power plants could close by 2021 if lawmakers don’t update the state’s alternative energy standards. (Creative Commons photo)

Advocates for Pennsylvania’s influential natural gas and coal industries laid into the nuclear industry during a Monday hearing on Pennsylvania’s proposed nuclear deal that would treat the industry’s five plants like solar, wind, and other alternative energy producers.

Speaking to the House Consumer Affairs Committee, Rachel Gleason — executive director of the Pennsylvania Coal Alliance — said that “never once … has the coal industry come to the General Assembly to request a ratepayer funded subsidy” despite the closing of coal plants in the state.

She added that a proposal by Rep. Tom Mehaffie, R-Dauphin, would continue to tip the scales in favor of renewables and away from coal and other fossil fuels.

David Spigelmyer, head of the powerful Marcellus Shale Coalition, echoed Gleason in his testimony, calling for legislators to oppose any “subsidization” or “bailout” of the nuclear industry.

“Disrupting the markets by picking winners and losers … risks significant jobs and private capital investment in our commonwealth — and gives credence to many across the nation that Pennsylvania is not open for business,” Spigelmyer said in written testimony.

The current nuclear plan is projected to cost in the neighborhood of $500 million, according to an analysis from the University of Pennsylvania. Mehaffie has put the price tag for households at an extra $1.77 a month on their electric bill.

But despite free market handwringing from industry representatives, at least one study suggests that coal and gas have gotten their share of government goodies over the years.

In 2015, PennFuture, a state environmental advocacy group, released a report looking at fiscal year 2012-13 and cited an expansive $3.2 billion in subsidies for the fossil fuel industry in Pennsylvania — or about $794 per taxpayer. 

The tally included everything from tax-exempt coal sales to grants spent on plugging old oil and gas wells, to the yet-to-be utilized tax credit approved for a still-unfinished petrochemical plant in Beaver County, north of Pittsburgh. 

Not that there haven’t been carve-outs for alternative energy. A 2004 law mandates that 18 percent of the state’s energy must come from alternative sources. Nine percent must be traditional renewables — like solar, wind, and biomass — while another nine percent can include energy from coal waste and large scale, out-of-state hydroelectric.

Mehaffie’s proposal would aid the nuclear industry by adding an extra tier to the state’s portfolio law. Under Mehaffie’s plan, electricity providers would be required to provide two-thirds of state electricity from alternative sources — including 50 percent from nuclear or a carbon-free renewable.

Nuclear power currently accounts for a little more than 40 percent of the state’s total energy production — some of which is exported to other states. Independent market analyses have concluded that four of the state’s five plants are profitable, but projections show future decreases in the margins.

Polls have shown broad public support for treating nuclear like other carbon-free energy. But no poll — whether independent or sponsored by nuclear allies — has included a projected price tag to ratepayers.

Industry allies — including the General Assembly’s bipartisan, bicameral 80-some member Nuclear Caucus, as well as two former governors — often point to the benefits of nuclear that aren’t noted in the market, like stability and limited air pollution.

On Monday, Spigelmyer instead pointed to what he said were the unseen costs of nuclear power — such as radioactive waste and emergency preparedness.

He asked the committee to consider the external benefits of fossil fuels, including electricity companies’ use of coal or natural gas mined or drilled within Pennsylvania.

Fossil fuel interests aren’t alone in pooh-poohing the bill. Environmental groups and their legislative allies have also greeted the proposal skeptically.

They are looking for a bill with a tighter focus on fighting climate change or expanding the market for alternative energy.

“I’m perfectly comfortable asking my constituents to pay a little more money if it significantly reduces the amount of carbon in our atmosphere,” Rep. Peter Schweyer, a Lehigh County Democrat and Consumer Affairs member, told the Capital-Star Monday.

Mehaffie has previously said the bill will likely be amended in some way before it gets a final vote.

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.