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Citizens Alliance of Pennsylvania


Nuclear Power Industry Wants a Bailout

by Policy Brief
 

It has become standard practice for industries that cannot compete on their own to look to the government for protection or an outright bailout. Pennsylvania taxpayers spend over $700 million per year supporting various corporate welfare schemes. Now a new industry has come hat in hand to the General Assembly because of their inability to compete: nuclear power plants.

The nuclear power industry has found allies in the General Assembly in a newly formed Nuclear Energy Caucus whose goal is to "[work] on policies that promote all of Pennsylvania's energy resources, including nuclear energy." Which policies would "promote" nuclear power in the Commonwealth? According to the nuclear power industry that would be subsidies.

According to an article by the Philadelphia Inquirer:

"Exelon Corp., which operates three of Pennsylvania's five nuclear plants, is leading an effort to promote price supports similar to the ones approved in Illinois and New York state that prevented Exelon reactors there from closing." [Emphasis added]

The problem for the nuclear power industry is that they are unable to compete on price. According to a 2016 Lazard (an asset manager and investment firm) report nuclear power generation costs $19-$88 per megawatt hour more than electricity generated using natural gas. Nuclear power fairs better against coal powered plants where the cost per megawatt hour for production can be a little less under a worst case comparison between industries, but generally coal is still a less expensive energy source. The nuclear industry had counted on the Obama administration's Clean Power Plan to tilt the scales in their favor by adding regulatory costs to their competitors. However, that possibility is now off the table thanks to a pro-coal Trump administration.

Over the long-term, the nuclear power industry will not be able to compete with natural gas powered electrical generation. Instead of forcing consumers to subsidize their industry with Soviet-style "price supports," it is time for them to find other ways to compete or shutdown their plants. There are certainly members of the Nuclear Energy Caucus who have spoken out against subsidies for solar and wind power. Why would any of them consider subsidizing another industry that can't succeed without government intervention?


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