By Tom Henry
July 2, 2018 - A broad coalition of 75 industry, government, and military dignitaries — a quarter of whom are retired admirals or vice admirals — has come out in support of President Trump’s plan to bail out the nation’s struggling nuclear plants, agreeing that more premature closures pose a national security threat.
“We urge you to continue to take concrete steps to ensure the national security attributes of US nuclear power plants are properly recognized by policymakers and are valued in US electricity markets,” according to the letter, which was addressed to U.S. Energy Secretary Rick Perry and dated last week.
The letter could help stave off the planned closures of FirstEnergy Solutions’ Davis-Besse nuclear plant east of Toledo, its Perry nuclear plant east of Cleveland, and its twin-reactor nuclear complex west of Pittsburgh.
FES has announced it will close Davis-Besse by May 31, 2020, unless a buyer or bailout emerges. The other three nuclear plants are to be closed by the end of 2021.
FES and FirstEnergy Nuclear Operating Co., both subsidiaries of Akron-based FirstEnergy Corp., are in bankruptcy proceedings because those plants — as well as several coal-fired power plants — have become unprofitable during the era of record-low natural gas prices and growth in the renewable energy sector. FirstEnergy has said it wants out of electricity generation, and that what’s left of the corporation will be focused on transmission.
The high-profile letter in support of saving nuclear plants is being circulated by the Nuclear Energy Institute, the nuclear industry’s lobbying arm on Capitol Hill.
Besides admirals and vice admirals, the signatories include former US Secretary of State George Shultz and former US senators Byron Dorgan (D., N.D.), Judd Gregg (R., N.H.), Trent Lott (R., Miss.), Jim Talent (R. Mo.), and John Warner (R., Va.).
Also signing the letter was former New Jersey Gov. and former US Environmental Protection Agency Administrator Christine Todd Whitman as well as many former industry executives, such as Daniel Akerson, General Motors’ chairman and chief executive officer from 2010 to 2014; Thomas Christopher, former AREVA chief executive officer; Charles Pryor, retired Westinghouse Electric Co. and URENCO USA chairman, and Jeffrey Wadsworth, former Battelle Memorial Institute president and chief executive officer.
In addition, the letter is signed by three former US Nuclear Regulatory Commission chairmen, Nils Diaz, Dale Klein, and Richard Meserve; as well as some former NRC commissioners, and several former directors of national laboratories.
The Trump Administration plan to bail out struggling nuclear and coal-fired power plants came two months after FirstEnergy Solutions filed what many experts view as a historic and potentially landmark petition for relief under Chapter 11 bankruptcy laws.
The bankruptcy filing has drawn national attention because FirstEnergy is one of America’s largest utilities. It appealed to Perry for help in late March when it filed for bankruptcy.
Those nuclear plants — in addition to numerous coal-fired power plants under FirstEnergy — represent a huge chunk of electricity for the regional electric grid that Pennsylvania-based PJM Interconnection operates in 13 states, including Ohio. That grid, which serves 65 million people, is the nation’s largest.
Perry is being asked to exercise emergency authority under a pair of federal laws typically reserved for wars or natural disasters.
According to The Associated Press, such a move is “unprecedented intervention into U.S. energy markets.”
PJM has said the planned shuttering of those plants pose “no immediate threat to system reliability,” and warned of higher prices, as have many others.
The Office of the Ohio Consumers’ Counsel, one of several parties that opposes such an emergency order, has called FirstEnergy’s request “extraordinary,” as well as “fundamentally unjust and unreasonable for Ohio consumers,” adding Ohioans will be subject to “paying subsidies and above-market prices for electricity” if a bailout is granted.
Also objecting have been attorneys general from nine states and the District of Columbia, calling the company’s justification “legally flawed” and “a grave abuse of the Federal Power Act,” a section of which provides for relief during national emergencies.
The Chicago-based Environmental Law & Policy Center — which called upon the NRC to investigate the utility’s decommissioning trust fund days before FES filed for bankruptcy protection — also has filed a 96-page petition in opposition, which it prepared with the New York-based Environmental Defense Fund, the Ohio Environmental Council, and Ohio Citizen Action.
The NRC found no shortfall during its last audit of the trust fund, completed in March, 2017.
The ELPC is one of several groups that have labeled Trump’s directive as an act of socialism, saying it goes against free market supply-and-demand principles. Those opposed include the American Petroleum Institute, which represents the industry benefiting most from expanded production of natural gas.
The United States is now the world’s largest producer of natural gas. Industry executives and government officials said at a conference in Washington last week that the country could expand its shale gas output another 60 percent in the coming decades.
The administration’s position is that America cannot become overly reliant on natural gas, renewable energy, and other sources of electricity that are now being sold at much cheaper prices. Natural gas in particular has made great inroads in the market because of how prices have fallen dramatically over the past decade once the modern era of fracking shale began.
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