As Ohio Senate nears vote on nuke subsidy bill, PJM finds closing plants could save $1.6B

Source: By Catherine Morehouse, Utility Dive • Posted: Monday, June 17, 2019

The Pennsylvania Public Utility Commission and Ohio Consumers’ Counsel requested the PJM report to illustrate the impacts of nuclear plant retirements on both market prices and emissions.

The focus was on giving the utilities and energy commission “unbiased data and facts” on the grid’s status, Asim Haque, executive director of PJM, said in his testimony.

But critics say the report gave an inaccurate picture, because it didn’t factor in a number of changes the bill would make, including eliminating Ohio’s green energy mandate, which drives utility procurement of renewables in the state, as well as the nuclear subsidies, which are expected to cost $190 million annually through 2026.

“PJM assumes the same level of wind, solar, and energy efficiency investments in all of its scenarios. However, they do not include the impacts of OH House Bill 6, which would rollback the state’s renewable energy and energy efficiency standards,” Steve Clemmer, director of clean energy research at the Union of Concerned Scientists, who wrote a blog criticizing the Ohio bill, told Utility Dive in an email.

“[T]his could result in [an] increase in consumer energy bills because they would no longer benefit from the energy bill savings from energy efficiency programs or investing directly in rooftop solar. It could also result in a net increase [in] emissions and net loss in jobs in Ohio over time as they would likely build more natural gas generation instead of investing in energy efficiency and renewable energy,” he said.

As with the subsidies, PJM said it chose not to speculate about how eliminating Ohio’s mandate would impact the state’s renewable energy mix, which is why all three scenarios factor in the same amount of renewables: 3.2 GW of wind additions and 3.9 GW of solar.

“That’s what in our interconnection queue. So we did not, for the purpose of this study, factor in any impact from the legislation because that’s not what we were asked to do. We were asked to look at nuclear specifically.” said Shields.

Other critics say the report underestimates the social cost of carbon, therefore undervaluing nuclear’s benefits to the consumer. If the social cost of carbon is valued at $44/ton, then retaining nuclear would save the consumer $776 million by 2023 without natural gas additions, and $604 million with fewer natural gas additions, according to an Exelon review of the report.

Additionally, market experts at Exelon said that carbon savings in the scenarios where nuclear plants were retired were misleading because nuclear power would likely be replaced by natural gas additions, an issue echoed in a report by the Union of Concerned Scientists on the dilemma of nuclear profitability versus their carbon benefits.

“It’s just a physical impossibility to shut down a zero emission nuclear plant and replace it with a — even if it’s highly efficient — fossil plant and assume emissions go down,” Bill Berg, vice president of wholesale market development at Exelon told Utility Dive. “The reason why those emissions are going down in all cases is because the coal is going away.”

The offices of several state senators who serve on the Energy and Public Utilities Committee did not return Utility Dive’s request for comment by the time of publication. Sen. Dave Burke, R, declined to comment, “due to the issue being much broader than a single testimony.”

The bill was referred to the Energy and Public Utilities Committee Thursday and awaits the committee’s vote.