| WASHINGTON/NEW YORK
WASHINGTON/NEW YORK May 30 U.S. environmental
regulators could throw a lifeline to the nation's ailing nuclear
power fleet when they unveil landmark carbon pollution curbs
next week, heeding calls from operators like Exelon Corp
to acknowledge nuclear energy as a valuable way to reduce
The Environmental Protection Agency is due on Monday to
release a plan to slash pollution from the power sector, the
centerpiece of President Barack Obama's efforts to tackle
climate change and likely one of the most contentious
initiatives of his second term.
Nuclear generators like Chicago-based Exelon, the nation's
largest, and Entergy Corp of New Orleans, have warned
that they need a regulatory pathway to compete with cheap
gas-fired power plants and to cope with the high cost of
repairing or replacing aging units.
In meetings with the EPA, executives have urged the agency
to recognize atomic energy in the new rules, arguing that
financial incentives or trading systems that would prevent the
closure of nuclear plants are an effective way to reduce overall
greenhouse gas output.
Officials appear to have taken note. In an EPA summary
document seen by Reuters, the agency identifies "avoiding the
retirement of 8 percent of existing nuclear capacity" among
several ways states can comply with the rules, along with
increasing renewable power such as solar.
By naming the continued use of existing nuclear capacity as
part of a "best system of emission reductions" - the menu of
options for curbing carbon - the EPA could give states the
go-ahead to make nuclear part of their strategy for complying
with the new federal pollution limits.
It was not clear, though, whether this phrase would remain
in the proposal, which is still being finalized. The EPA has
declined to comment on any details of the plan until it is made
"We need every single megawatt of nuclear to stay in place
just to tread water, and we need appropriate incentives to keep
those units in operation and to expand clean energy," Joseph
Dominguez, Exelon's senior vice president of governmental and
regulatory affairs, told Reuters. He said he has not yet seen
the EPA proposal.
The pleas arise amid growing signs of distress in the
industry. Last week three nuclear units owned by Exelon,
including two in Illinois, failed to win contracts at an auction
to supply the Atlantic and Midwest PJM electrical grid, the
nation's largest, for 2017-2018.
Exelon, which operates 24 reactors at 14 sites around the
country, or about a quarter of the U.S. fleet, has said it may
be forced to shut three Illinois units for economic reasons. The
threatened facilities - in Byron, Clinton and the Quad Cities -
employ more than 2,300 people and pay over $50 million a year in
local and state taxes.
Nuclear plants produce nearly a fifth of the nation's
energy, and industry boosters tout the reliable,
around-the-clock, carbon-free output. Clean alternatives such as
wind turbines operate only intermittently, and need additional
capacity from gas or coal plants to maintain a steady supply for
Chuck Barlow, Entergy's vice president of environmental
strategy and policy, says nuclear generators should get credit
for the megawatts produced, either through state clean energy
programs or multi-state carbon markets, like the northeast's
Regional Greenhouse Gas Initiative (RGGI).
The EPA is expected to give states the option to use
cap-and-trade programs, such as the RGGI, to comply with future
performance standards, Reuters reported on May 20.
"Nuclear does need to get beneficial treatment under the
rule because of its importance to meeting any climate change
goals," Barlow said.
Without any incentives, companies may be forced to shut
several of the nation's older reactors, despite expectations
they would find favor with the retirement of older coal plants,
said Doug Vine, a senior energy fellow at the Center for Climate
and Energy Solutions.
A report from the Energy Information Administration in April
forecast that a total of 10,800 megawatts of U.S. nuclear
generation, or around 10 percent of total capacity, would be
shuttered by 2020.
Nuclear accounts for nearly half of Illinois' electricity
generation, with carbon-intensive coal making up most of the
remainder, making the future of the nuclear fleet a key question
for the Midwestern state.
Illinois lawmakers are advancing a resolution urging the EPA
to "secure the continued operations" of its nuclear plants as a
compliance mechanism for any greenhouse gas rules.
Doug Scott, chairman of the Illinois Commerce Commission,
hopes the EPA proposal will back states like Illinois that have
a cleaner energy mix, led by nuclear, but including energy
efficiency improvements, coal plant closures and renewables.
"There are ways we can take advantage of the clean energy
sources we have, like nuclear. Hopefully we will have enough
flexibility to mesh all of the things we are talking about,"
(Editing by Jonathan Leff, Ros Krasny and Richard Pullin)