Nuclear Bailout to Burden Consumers, Cost Job-Creating Investment

Passing a bailout of the nuclear industry threatens Pennsylvania’s business environment and will burden consumers, MSC’s David Spigelmyer testified during a senate hearing earlier this week.

Spigelmyer, who will testify before a House committee on Monday, urged the Senate Consumer Protection and Professional Licensure Committee to stay true to free market principles, arguing that the proposed nuclear bailout would “[upend] the markets by picking winners and losers” and risk significant jobs and private capital investment in our Commonwealth.”

Reiterating the risks at hand, President of GT Power and former Pa. PUC chairman Group Glen Thomas said passing the bill, “would represent a myopic and disastrous step back in time. Senate Bill 510 takes Pennsylvania from the forefront of innovation and competitiveness back to a time when Pennsylvania’s policymakers dictated the generation choices forconsumers and locked them into prices that are higher than what they should otherwise be paying.”

To watch Spigelmyer and Thomas’ testimonies, click here. Highlights from Spigelmyer’s testimony include:

Stay the Course: Competitive Markets Work

“While the number of customers who have switched their supplier is impressive, the real test of competition is the availability of choice. Equally important, the shifting of risk to the private sector – and away from ratepayers – has sent the right signals to the market to encourage appropriate levels of new generation facilities with assurances of competing on an even playing field. …The General Assembly ought to be commended for the discipline of staying the course and resist the temptation to upend decades of progress.”

Historic Capital Investment and Job Opportunities for PA

“The business environment created in Pennsylvania through the Competition Act has sent positive signals to the investment community. The response is evident with significant new capital spending – and the creation and retention of thousands of jobs – as companies take advantage of clean, abundant and locally-sourced natural gas. Preliminary estimates of this capital investment show nearly $13 Billion in construction costs for new and converted power stations just in Pennsylvania alone.”

Nuclear Power: Here to Stay

“First – make no mistake: nuclear power generation as an industry is not going anywhere. Pennsylvania’s nuclear industry, and indeed the nuclear industry across the PJM power grid, is profitable and healthy.

…Some have decried the supposed ‘early retirement’ of some nuclear plants as emblematic of a struggling industry. However, the retirement of individual power plants that are not economical is nothing new to our state or nation. With respect to nuclear power plants, it has largely been limited to single-reactor units that do not possess the efficiencies of scale to be economically competitive.

…Despite these announced retirements, there remains a strong, healthy – and highly profitable – nuclear industry within Pennsylvania, PJM and the United States.

Diversity of PA’s Generation Portfolio

Perhaps no state in the nation has as diverse a generation portfolio as Pennsylvania, with roughly equal parts coming from each nuclear, coal and natural gas. In fact, in 2018 nuclear energy represented the largest percentage of electric power generation in Pennsylvania at 32%.
“…. The diversity of resources available to Pennsylvania consumers – across the entirety of our electrical grid – is deep and strong and well-positioned to serve the needs of our residents regardless if individual, uneconomic power plants may choose to close.”

Importance of Carbon and Other Emission Reductions

“To be clear: the MSC and its member companies recognize the importance of reduced air emissions across the board. …Carbon dioxide emissions in Pennsylvania from the electric power generation sector are down 30% since 2005 (through 2015). This is overwhelmingly attributable to the increased use of natural gas.”

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