Exelon Corp, the owner of the Three Mile Island nuclear power plant that is located in the state of Pennsylvania has revealed that the facility will be shuttered in 2019. This comes 40 years after it experienced the worst U.S. nuclear accident and as the low prices of natural gas make atomic energy less competitive.
Exelon plans to shut down the facility by the September 30, 2019 unless Pennsylvania elects to offer compensation to the nuclear plant for the benefits that nuclear power offers.
“[I urge the state] to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide,” the president and chief executive officer of Exelon, Chris Crane, said in a statement.
Natural gas onslaught
Currently about 675 people are employed at Three Mile Island. The electricity produced at the facility is enough to power approximately 800,000 households. Three Mile Island also pays state property taxes amounting to over $1 million in a year.
The low prices of natural gas that’s produced from shale formations such as Marcellus in Pennsylvania have contributed to keeping electricity prices low for a number of years now. Consequently, nuclear reactors have found it hard to compete against gas-fired generators in power markets that are deregulated in the Midwest and Northeast parts of the United States.
Since 2013 economic reasons have led to the closure of six nuclear reactors in the U.S. before the expiry of licenses. This is in such states as Wisconsin, Vermont, Nebraska, Florida and California. In the next 5 years there are plans to shut down six or more reactors.
In 2016 the states of Illinois and New York adopted rules which mandated making payments to nuclear power facilities with a view to ensuring that the plants stay in service. This would assist the states in meeting carbon reduction goals, offer fuel diversification and keep the nuclear facility jobs. At least four more states are said to be considering enacting similar policies and this includes Pennsylvania, Ohio, New Jersey and Connecticut.
But power producers that stand to benefit in case the reactors go out of service have proceeded to court to challenge the nuclear payments being made by the states of Illinois and New York. The power producers argue that the policies constitute unfair subsidies on one fuel source against others thereby violating free market principles. They also argue that the subsidies will lead to higher costs for ratepayers.