Subsidizing nuclear power to fight climate change is one thing in liberal states like New York and New Jersey. It’s quite another in the natural gas bastions of Pennsylvania and Ohio.
Drillers and gas-fired power plant operators are girding to fight measures to save money-losing reactors in the Keystone and Buckeye states, saying they’ve learned from past defeats and are better positioned to win.
The looming debates are a key test of how far lawmakers in shale gas country are willing to go to fight climate change. Four left-leaning states have already approved bailouts for reactors, in step with aggressive targets to replace coal and gas with clean energy. This time fossil-fuel proponents are fighting on their home turf.
“Natural gas is very, very strong” in Pennsylvania, said state Sen. Ryan Aument, who supports subsidizing reactors. “Those interests are well represented.”
In Pennsylvania, a Republican lawmaker introduced a bill Monday to support the state’s five plants, owned by Exelon Corp., FirstEnergy Solutions and Riverstone Holdings LLC’s Talen Energy Corp. Ohio legislators are preparing their own measure.
Time is critical for nuclear plants. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices. At least six have closed since 2013, including in New Jersey and Vermont.
FirstEnergy Solutions said it will close its Davis-Besse and Perry nuclear plants in Ohio without subsidies. Exelon needs to order a new reactor core by May for its Three Mile Island plant — site of the infamous 1979 meltdown — making it crucial for lawmakers to pass legislation this spring, Chief Executive Officer Chris Crane said on call with analysts last month.
“If we can get this through in that period of time, we will be able to save the unit,” Crane said.
New York became the first state to throw reactors a lifeline in 2016, followed by Illinois, New Jersey and Connecticut. In each case, fossil fuel generators fought back, saying the bailouts were an intrusion into free markets and would drive up electricity prices. But all four states have aggressive clean-energy targets, and without reactors they’d need to rely more heavily on power plants fueled by coal and gas.
“That’s what resonated a lot with lawmakers in New York, Illinois and New Jersey,” said Timothy Fox, vice president at ClearView Energy Partners LLC. “That argument may not be as strong in states like Pennsylvania and Ohio.’’
The two states straddle the Marcellus and Utica shale formations, one of the most prolific sources of gas in the U.S. Oil and gas production supports more than 30,000 jobs in Pennsylvania and Ohio, according to U.S. Labor Department. It also accounted for an average of 2 percent of the two states’ gross domestic products in 2016 — compared to virtually none in New York, Illinois, New Jersey and Connecticut, according to Fox.
“We have a better opportunity for our argument to be successful here,’’ Chris Zeigler, executive director of the American Petroleum Institute’s Ohio office, said in an interview.
Past efforts to prop up reactors in the Rust Belt have struggled to advance. In Ohio, a bailout bill died in committee during the last session. Pennsylvania lawmakers first formed a caucus nearly two years ago to focus on the issue.
A coalition of gas-fired power plant owners, manufactures and others have organized in Pennsylvania under the name Citizens Against Nuclear Bailouts to oppose the bill introduced this week by State Rep. Tom Mehaffie, a Republican whose district abuts Three Mile Island. A spokesman for the group, Steve Kratz, said any law favoring nuclear power over electricity from gas plants or other sources would undermine economic growth.
“When policy makers start getting in and dictating that a certain amount of power has to come from a certain technology, it just completely destroys the competitive market,’’ said Glen Thomas, a former Pennsylvania Public Utility Commission chairman.
In Ohio, a nuclear subsidy bill could put a $925 million project to build a gas plant in Lordstown at risk, said the developer, Clean Energy Future President William Siderewicz.
“This is equivalent to trying to keep Blockbuster subsidized so it can complete against Netflix,’’ he said in an interview.