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Exelon says again: Three Mile Island is closing in September because Legislature has not acted

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 5/8/19

Three Mile Island will shut down by Sept. 30, absent what appears to be increasingly dimming hopes that the state Legislature will act in time on proposed changes that would provide economic support …

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Exelon says again: Three Mile Island is closing in September because Legislature has not acted

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Three Mile Island will shut down by Sept. 30, absent what appears to be increasingly dimming hopes that the state Legislature will act in time on proposed changes that would provide economic support to the nuclear industry in Pennsylvania, Exelon Generation announced May 8.

With only three legislative session days left in May and no action taken to advance House Bill 11 or Senate Bill 510, Exelon said it is “clear” that a state policy solution will not be enacted before June 1, which Exelon said is the “deadline” for the company to purchase fuel to keep TMI going beyond Sept. 30.

VIDEO: Dave Marcheskie discusses Exelon's May 8 TMI closure announcement

“Although we see strong support in Harrisburg and throughout Pennsylvania to reduce carbon emissions and maintain the environmental and economic benefits provided by nuclear energy, we don’t see a path forward for policy changes before the June 1 fuel purchasing deadline for TMI,” said Kathleen Barron, Exelon senior vice president for government and regulatory affairs and public policy. Illinois-based Exelon owns the active nuclear facility on Three Mile Island.

Asked if June 1 is not a self-imposed deadline that Exelon can extend if it wants, TMI spokesman Dave Marcheskie said that the manufacturing and delivery of the fuel is specific to the Unit 1 reactor core, and it must be ordered by June 1 in order for the plant to continue operating beyond Sept. 30.

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'A punch in the stomach': Rep. Mehaffie's statement on Exelon's confirmation of TMI's closure

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“We were very transparent with the Legislature” as to the need to act by June 1, Marcheskie said.

With only three days left in the legislative session, “that’s why the decision was made today” to announce that the closing of TMI will take place on Sept. 30, as planned, Marcheskie said May 8. “There isn’t a path at this time to get a bill to the governor’s desk within that time frame. A couple of days is not going to change that.”

Wolf makes statement

Gov. Tom Wolf said Wednesday that he still believes it is essential to continue “this important conversation about preserving and growing Pennsylvania’s carbon-free energy footprint,” and he is hopeful that a consensus can be reached in the coming weeks.

“I was disappointed to learn this morning’s unfortunate news and continue to stand today with the workers at Three Mile Island and the surrounding community,” Wolf said. “I have directed the Department of Labor & Industry to immediately begin plans to engage with these workers about their futures, and a Rapid Response team is in the process of being deployed. They are skilled workers who are in-demand in the economy. While I understand the operator is working to offer internal positions to these workers, we will not spare our resources to provide assistance to those who will be impacted.”

Beyond TMI, Exelon’s Barron said that if TMI closes as planned on Sept. 30, Exelon will continue working with the Legislature to enact reforms Exelon said are needed to preserve the eight other nuclear units that are running throughout Pennsylvania.

Financial impact

TMI has 675 full-time employees and an annual payroll of $60 million. The plant pays more than $1 million combined in annual taxes to Lower Dauphin School District, Londonderry Township and Dauphin County.

In Londonderry Township, TMI’s annual golf outing at Sunset Golf Course has raised thousands of dollars for the Londonderry Volunteer Fire Company.

Londonderry Township Manager Steve Letavic called the news “absolutely devastating” for the region and state.

The decision will result in increased carbon emissions as fossil fuel producers supplement the power generated from nuclear producers, Letavic said. TMI and the nuclear industry, he said, is an economic driver in the state in terms of thousands of jobs and billions of dollars in gross domestic product, and he believes the “negative economic impact will be severe.”

“For our families and friends that work at Three Mile Island, we stand with you, and we are heartbroken with you; you have been part of the fabric of our community. This is truly a sad day for Londonderry Township and the state of Pennsylvania,” Letavic said.

The plant and its employees have also contributed about $300,000 a year to charities throughout the region, according to Exelon.

However, TMI has not made a profit in six years, Exelon said in 2018.

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Clean Jobs for Pennsylvania faults Gov. Wolf, Legislature on failure to act to save TMI

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Other studies have also noted that TMI is the only nuclear plant in the state currently viewed as unprofitable, a consequence largely due to TMI’s unique situation — in Pennsylvania at least — of having just one working reactor, following the March 1979 accident that permanently shut down Unit 2 in 1979.

Marcheskie acknowledged the challenge the proposed legislation has faced, given the arguments from opponents that TMI is the only plant in need of immediate economic assistance.

However, the proposed legislation in the House and Senate to preserve the nuclear industry in Pennsylvania “was not just for distressed plants,” Marcheskie said. “It was to give benefits to the nuclear power industry because it does generate 93 percent of carbon-free electricity in Pennsylvania. While TMI was a big driver because it is physically challenged to try and correct the market flaws and level the playing field, the bills really do help the non-polluters in the energy grid.”

Legislative effort fails

Exelon first announced in May 2017 that it would prematurely retire TMI in September 2019, unless the state enacted reforms Exelon viewed as being needed to put TMI and other nuclear plants in Pennsylvania on a “level playing field” with other forms of renewable energy, such as wind and solar.

In March of this year Rep. Tom Mehaffie, R-Lower Swatara, introduced House Bill 11, which would subsidize TMI and the other nuclear plants in Pennsylvania by adding nuclear to the list of 16 forms of renewable energy from which utilities are required to purchase electricity.

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TMI watchdog group on closure: 'It’s not a happy time .. nobody is spiking the ball in the end zone'

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Mehaffie told the Press & Journal on May 8 that there is no committee vote scheduled on his bill.

The subsidy would come in the form of a credit that these utilities would have to purchase. The utilities could pass the cost of purchasing these credits onto customers. Mehaffie has said his bill would on average cost Pennsylvanians $500 million more a year in electricity costs.

However, Mehaffie says that without his legislation — and without nuclear if all the plants in the state close — the eventual added cost to Pennsylvania residents and businesses will be an estimated $4.6 billion a year, including $788 million in higher electricity costs for consumers and $2 million in lost gross domestic product.

Besides the economics, Mehaffie and other proponents of the legislation, including Exelon, say the credits are a fairness issue; in that nuclear should be rewarded for being the largest source of carbon-free emissions for the production of electricity in Pennsylvania.

Allowing TMI and the other nuclear plants to close will make it more difficult for the state to reduce greenhouse gas emissions, proponents of the legislation say.

However, opponents contend that the legislation is a bailout of a nuclear industry that is already profitable.

The legislation would needlessly increase the cost of electricity for residents and businesses in Pennsylvania, say the opponents.

Besides House Bill 11 legislation similar to Mehaffie’s was introduced in the Senate in early April by Sen. Ryan Aument, R-Lancaster.

Aument’s bill has not been scheduled for a committee vote. In a statement May 8, he said that while TMI may be the only nuclear plant in the state that is not making a profit now, that may not be the case in the long run.

“There are those who believe that the economic and market pressures that ultimately forced TMI to prematurely retire are isolated to that facility,” Aument said. “Make no mistake, these pressures will soon be felt by all of the other nuclear plants across Pennsylvania, and unfortunately Exelon’s announcement only serves to reinforce that conclusion. The very thorough review completed by the Nuclear Energy Caucus has led me to believe that, absent federal or state action, the premature closure of the Commonwealth’s nuclear power plants will trigger severe impacts with regards to diminished grid resiliency, increased monthly electric bills, weakened portfolio diversity, and poorer air quality in this Commonwealth.

I hope that I am wrong with respect to these economic and environmental consequences.”

Brace for impact

“We are very disappointed today to have to make this decision that Pennsylvania and the legislature doesn’t put more value on nuclear power plants,” Marcheskie said, adding that TMI alone generates more electricity than all wind and solar combined in the state. “It’s an emotional day for everybody here. You have people who have worked at this plant for 30, 40 years, raised kids at this plant. People are ingrained in this community — little league coaches, Girl Scout volunteers. We love living here in central Pennsylvania, so for us to have to make the decision here today that this plant will no longer be operational is difficult.”

The decision also means that besides the employees, the communities are going to have to “brace” for the impact of TMI closing, Marcheskie said.

TMI will be down to about 50 full-time employees by the end of 2022, under the decommissioning plan that Exelon recently submitted to the Nuclear Regulator Commission.

However, Marcheskie declined to provide a timetable regarding when Exelon will begin applying to Dauphin County for a reduced assessment of the TMI plant aimed at reducing the amount of property taxes that are paid.

“That’s a discussion for another day. I don’t have that timeline at this time,” he said.

Reporter Laura Hayes contributed to this story.