Nuke Subsidies | Solar Projects Approved | No Coal Subsidies | Retail Choice

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NJ okays Nuke Subsidies

Add New Jersey to the list of states extending out-of-market financial compensation for nuclear power plants based on their ability to make electricity without carbon dioxide emissions.

The New Jersey Board of Public Utilities has granted “zero emission certificates” to three nuclear plants threatened with early retirements, a decision that could be worth as much as $300 million a year to owner-operator Public Service Enterprise Group (PSEG).

Chicago-based Exelon Corp. is a part-owner of one of the plants. Both Exelon and PSEG have said they would shut down nuclear facilities ahead of their scheduled license expirations if they were unsuccessful in having them subsidized to keep producing emissions-free power in wholesale electricity markets that are unfavorable to their continued operation. Exelon won legislative approval of ratepayer surcharges for three of its Illinois plants in 2016.

Opponents of the subsidy arrangements have argued that the plants are not unprofitable.

Pair of Solar Projects Approved

Two utility-scale solar generation projects have won Wisconsin Public Service Commission approval, the agency has announced. The projects would more than quadruple the state’s solar capacity.

The Two Creeks project will be in Manitowoc County north of Two Rivers. The Badger Hollow project will be sited near Cobb, in Iowa County. Nameplate capacity of Two Creeks is 150 megawatts from a 700-acre site. Badger Hollow is rated at 300 megawatts from panels covering 3,500 acres.

Along with Certificates of Public Convenience and Necessity authorizing construction of the two projects, the Commission approved Certificates of Authority for Madison Gas and Electric and Wisconsin Public Service Corporation to acquire the Two Creeks facility in its entirety and to acquire 150 megawatts of generating capacity from Badger Hollow. The remaining capacity of Badger Hollow (a wholly owned subsidiary of Chicago-based Invenergy) would be available for sale on the open market.

DOE Sees no Coal Subsidies

While individual states roll out initiatives to shore up the economics of nuclear generating facilities, the Department of Energy (DOE) is explicitly rejecting the idea of government help for economically troubled coal-fired plants that some contend are needed to ensure grid stability during extreme cold-weather episodes.
The DOE’s position represents a departure from its earlier stance that plants keeping a 90-day fuel reserve on-site merited special considerations to keep them available even if they were economically uncompetitive in wholesale markets.

DOE Assistant Secretary Bruce Walker told reporters, “Nobody I know is looking at subsidizing coal, period,” after addressing a conference of the National Rural Electric Cooperative Association (NRECA) in Washington, D.C., a Platt’s report said.

Walker’s NRECA speech stressed the need for grid resilience in the face of growing reliance on intermittent generation sources. He told the co-op audience the DOE regards coal as just one of several generation types available to backstop reliability in the event of problems with natural gas-fired plants served by pipelines.

Retail Choice Has Slim Price Impact

U.S. residential electricity rates have increased across the board, but in two decades since almost half the states allowed customer choice of retail providers, prices have risen slightly more in deregulated states.

That’s the core finding in the American Public Power Association’s (APPA) update of its 2018 report, “Retail Electric Rates in Deregulated and Regulated States.”

Published in April, the municipal utility group’s update shows an upward trend in both scenarios, but when the trend lines diverge, they reflect prices rising faster in retail choice states.

Rates climbed steadily in both sets of states during the first half of the past decade, but increased “dramatically” in deregulated states between 2005 and 2006 “as more rate caps came off and natural gas prices increased,” the APPA noted.

State “deregulation” plans in the 1990s typically intensified regulation by legislating rate caps, in order to insulate the experiment against open market pricing and make the action appear successful at the individual consumer level.

In 1997, the APPA update said, weighted average retail rates in deregulated states were 2.3 cents above those for regulated states, and the identical gap persisted two decades later.

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