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Sustainable Business

U.S. senators introduce nuclear power credit to help curb emissions

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Sen. Ben Cardin (D-MD), speaks during a news conference at the U.S. Capitol in Washington, U.S., March 23, 2021. Erin Scot/ Pool via REUTERS

WASHINGTON, May 26 (Reuters) - Three Democratic U.S. senators introduced a measure on Wednesday to boost existing nuclear plants to a wide energy tax reform bill, after the Biden administration pushed for such a change to help curb carbon emissions.

Senator Ben Cardin introduced the amendment on the tax production credit with fellow Democrats, Senators Sheldon Whitehouse and Bob Casey.

"We're in danger of seeing the premature closing of the nuclear reactors in this country," Cardin said before introducing the amendment at a hearing considering the wider bill, the Clean Energy for America Act. Cardin did not ask for a vote on the measure, a move to allow time to refine it as legislation advances.

The bill, Democratic Senator Ron Wyden's package of long term incentives for clean energy and clean vehicles that removes some tax breaks for fossil fuels, passed the Senate Finance Committee later in the day on a party line vote.

It could eventually be absorbed into infrastructure legislation but will likely see changes. Republicans on the committee took issue with the reductions in fossil fuel tax incentives, saying they would harm jobs and consumers.

Nuclear reactors are virtually emissions-free, but have been struggling to compete with power generation fueled by natural gas, and wind and solar power. The United States has 93 reactors, down from 104 in 2012, as rising security and safety costs put additional pressures on the business.

While some environmental groups oppose nuclear power, the Biden administration has signaled support for the credit for nuclear power plants as it seeks to put the country on a path to decarbonize the carbon grid by 2035. read more

Two Republican senators on the Senate Finance Committee also spoke favorably about the amendment, increasing the odds it could eventually pass.

Height Securities analysts said they believe that support for at-risk nuclear is likely to be included in the infrastructure package or other bills if robust clean energy tax provisions are included, given support from the White House and Senator Joe Manchin, a moderate Democrat.

The tax credit could help utilities such as Exelon Corp (EXC.O) keep reactors open. The company has said it will close four reactors in Illinois in September and November but is seeking incentives from the state to keep them open.

Cardin's amendment provides a production tax credit of $15 per megawatt hour for existing nuclear plant owners or operators in states such as New York, Illinois, and Pennsylvania with deregulated power markets. The credit would be reduced by 80% for any market revenues above $25 per megawatt hour.

The credit would begin to phase down when greenhouse gas emissions fall by 50% below 2020 levels and ends entirely after 2030.

Reporting by Timothy Gardner; editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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