- 10,000 megawatts of nuclear capacity fails to clear three-year ahead auction
- NEI’s Korsnick: Immediate market reform needed
- Quad Cities plant clears auction thanks to Illinois’ zero-emission credit legislation
Last week, more than 10,000 megawatts of nuclear generating capacity failed to clear PJM Interconnection's annual capacity auction, which the regional transmission organization uses to procure power supplies for 65 million people three years into the future.
NEI President and Chief Executive Officer Maria Korsnick said this result shows that the largest U.S. grid operator is at risk of further loss of reliable, resilient power and America’s largest source of clean electricity.
“Nuclear plants in the PJM market are more at risk of premature closure now than ever before,” Korsnick said.
“Distorted market forces jeopardize clean, fuel-secure sources of electricity. If these plants are forced to close because markets are not being reformed to value the attributes that nuclear provides to the grid, we will face an energy supply that is less diverse, less clean and overly reliant on natural gas.”
Korsnick added that the auction’s result demonstrates the urgent need for market reform.
“Immediate action is needed to reform these markets to value the attributes of the power they produce. Energy Secretary Perry has been ringing the warning bell that fuel security and resilience are critical to energy security and national security. Only by bringing the capacity and energy markets into better balance will we be able to realize the benefits of a diverse energy supply.”
Exelon Corp., the nation’s largest nuclear utility, said the failure of some nuclear power plants to clear the auction demonstrates the “urgent need for policy reforms to resolve acknowledged flaws in market rules.”
“Now, more than ever, we need federal, regional and state policymakers to urgently take action to preserve the benefits that our nation’s largest and most resilient source of emissions-free energy provides to our customers,” said Kathleen Barrón, Exelon’s senior vice president of government and regulatory affairs and public policy. “PJM has acknowledged the long-standing market flaws that put nuclear energy at risk, and the time to implement solutions is running out.”
Exelon noted that its Quad Cities Generating Station in Illinois cleared the capacity auction as a result of state legislation that fairly compensates certain nuclear plants for their environmental attributes.
Several states have taken action to preserve their local nuclear power plants in recent years. New York and Illinois instituted zero-emission credit (ZEC) programs in 2016 and Connecticut passed a law the following year that would allow the Millstone Power Station to compete with other non-emitting sources in a clean electricity procurement process. New Jersey recently established its own ZEC program for nuclear plants, and Ohio and Pennsylvania are both considering similar steps.
FirstEnergy Solutions (FES), another nuclear utility that operates in the PJM region, expressed its disappointment with the results of the auction.
“This situation is a call to action for policy makers in Ohio and Pennsylvania to take effective action to support these important baseload nuclear power plants that can and should operate for many years into the future,” FES President Don Moul said.
“Other states in the PJM region and elsewhere have developed policy solutions to keep their nuclear plants in operation—most recently, New Jersey. FES is committed to working with policymakers to find creative solutions to make this happen in Ohio and Pennsylvania as well.”
PJM’s service area encompasses parts of 13 Midwest and Mid-Atlantic states and the District of Columbia.