The nuclear power industry will descend upon Washington this week amid a storm of complex policy challenges that could threaten its future, including its role under the Obama administration’s contentious climate rules.
The Nuclear Energy Assembly kicks into high gear on Wednesday, with an agenda that touches on nearly every major policy challenge facing the industry, from wind energy subsidies to the administration’s power plant rules to cybersecurity, and indeed the broader utility industry in general.
Over the next two days, the assembly will attempt to address the challenges posed by the Environmental Protection Agency’s proposed emission rules for power plants, the nation’s switch from coal- to natural gas-fired electricity, and federal wind subsidies that are hurting the market for nuclear power, according to a spokesman for the Nuclear Energy Institute, the trade group that is hosting the event.
The assembly will underscore the growth of nuclear power in the U.S. and other parts of the world, primarily Asia. The construction of new nuclear power plants lately has been limited to a handful of plants in the Southeast U.S.
“The Nuclear Energy Assembly convenes as significant progress is being made in the construction of five reactors in the Southeast and nearly 70 reactors worldwide,” according to the institute. “Twenty-seven of the reactors are being built in China and South Korea, and the U.S. government is reauthorizing nuclear energy trade agreements with each.” Stefan Selig, U.S. Department of Commerce’s undersecretary for international trade, likely will address the trade agreements when he addresses the assembly on Thursday.
Outside of the few new plants coming on line soon, the nuclear industry is focused on renewing licenses for its existing fleet and upgrading its nearly 100 aging reactors. The industry is pressing state regulators to consider the benefits that nuclear power provides as states consider the option of retiring older power plants in favor of other options.
Cybersecurity threats to nuclear power plants also will be discussed, with former FBI Director Robert Mueller addressing the topic. Power plants and electricity infrastructure are considered prime targets for cyber espionage and digital terrorism by hacking into a power plant’s control system and creating havoc.
Climate change will be one of the more interesting topics, and a nuclear institute spokesman says EPA emission rules will “certainly” be discussed.
The emission rules discussion could touch off debate over how nuclear and renewables are valued by EPA under the proposed regulations, also known as the Clean Power Plan.
The industry wants changes to the rules that do not undercut the value of nuclear power in helping states meet their emission reduction targets that EPA sets for each state. The Clean Power Plan, unlike previous power plant rules, seeks to control emissions by setting a statewide emission reduction goal. Each state is given a goal to achieve based on its resources.
The nuclear industry says the EPA is using a calculation that undervalues states that have nuclear plants and would make it difficult for states to use nuclear in the future.
Exelon, the largest nuclear power utility in the country, told the EPA in December that “[a]lthough EPA recognizes the importance of preserving existing nuclear plants to achieving further emissions reductions, the rule as proposed would not accomplish this goal.” Instead, the proposal “adopts rate goals based on a formula that arbitrarily discounts nuclear generation relative to other carbon-free generation, and thereby provides states with an insufficient incentive to preserve nuclear generation.”
Marvin Fertel, president and CEO of the Nuclear Energy Institute, reinforced the idea in the institute’s comments. Fertel said the EPA must change the nuclear energy-related provisions to maintain “the benefits Americans receive from these large-scale, carbon-free facilities.” The Clean Power Plan must be revised to ensure states have sufficient incentive to preserve existing nuclear power plants, while allowing the construction of new plants.
The industry also is facing other “competitive challenges” in deregulated electric markets, such as Production Tax Credits, or PTCs, for wind energy that the nuclear industry says are distorting the electricity markets and making it more difficult for nuclear generators to compete.
The wind credit, the nuclear industry has argued, creates negative prices for electricity, which makes it harder for nuclear power plants to recoup the cost of generating electricity.
Exelon has taken the lead in making the argument against the wind credit. “Proponents of the PTC argue that negative prices are a good thing because such pricing drives consumer electricity prices lower. This simplistic reasoning doesn’t hold up when one considers what is not included in the market price, including the cost of back-up generation needed for when the wind doesn’t blow, transmission costs to get the power where it is needed and the taxpayer cost of the PTC,” it said.
These issues likely will be taken up during a panel discussion on “Aligning the Nuclear Policy, Economic and Regulatory Agenda.” The discussion will be moderated by Maria Korsnick, who serves as both Constellation Energy’s senior nuclear energy officer and Exelon’s vice president for Northeast operations. Exelon owns Constellation Energy.
Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, R-Alaska, and Sen. Jim Inhofe, chairman of the Environment and Public Works Committee, are scheduled to speak. Members from the House also will address the event.
Energy Secretary Ernest Moniz is likely to discuss an announcement the White House made earlier this year on seeking an alternative nuclear waste site to Yucca Mountain in Nevada. The new approach will involve finding an interim storage site for civilian nuclear reactor waste, as well as a permanent waste solution for the growing stockpile of defense waste.
The Department of Energy also is supporting the development of small modular nuclear power plants, which are seen by proponents as a low-cost alternative to their much larger cousins. He will likely touch on that program, with other aspects of the department’s fiscal 2016 budget request.
