Nuclear Industry Recommendations For Obama Clean Power Plan

In comments filed today with the U.S. Environmental Protection Agency, the Nuclear Energy Institute recommends that the agency provide states with maximum flexibility to preserve existing nuclear energy facilities and take care not to worsen distortions in electricity markets that are placing some reactors at risk of premature closure. The Institute made these broad recommendations and more specific recommendations below on the agency's Federal Implementation Plan and model trading rules for the Clean Power Plan. 

Preserving and extending the operation of existing nuclear power plants is essential to achieving meaningful, sustainable carbon reductions from the U.S. electric sector. States should use the tools and techniques available under the Clean Power Plan to preserve nuclear power plants, which produce 63% of America's carbon-free electricity. Given this, as it finalizes the federal plan and the model rules, EPA should strive to achieve two broad objectives:

1)    Provide states flexibility to use the tools and techniques available under the Clean Power Plan to preserve existing nuclear energy capacity and promote cost-effective compliance; and 
2)    Prevent further electricity market distortion that is placing existing reactors at risk, or do not pick technology winners and losers when there is no factual or justifiable basis for doing so.

Specifically, NEI believes EPA should:

 

• Develop and finalize rate-based and mass-based model rules, to provide states maximum possible flexibility based on their particular circumstances.
• Ensure state plans demonstrate reasonable assurance that they will preserve existing carbon-free generating capacity, particularly the nuclear energy capacity on which the Clean Power Plan depends. 
• The mass-based compliance option incorporating existing and new reactors is the only compliance pathway in the Clean Power Plan that preserves existing nuclear power plants. In those states that choose not to cover both new and existing sources, the Clean Power Plan should ensure that states use the tools available under a mass-based approach, including structuring allowance allocation, to preserve existing reactors.
• Treat all forms of zero-carbon generation comparably, with respect to plan implementation elements like the CEIP and credit for allowance trades between mass- and rate-based plans.
• Ensure that state plans provide market signals and incentives for companies to maintain existing nuclear power plants and undertake the capital investment necessary to renew reactor licenses for additional 20-year increments. Absent second license renewals, carbon reductions achieved between 2022 and 2030 may not be sustainable beyond 2030.

States have several options to recognize the carbon-free value of nuclear power plants, and thereby ensure that they continue to produce electricity. Illinois, for example, is considering a low-carbon portfolio standard that would preserve nuclear plants that provide 91% of its carbon-free electricity.  Similarly, New York Gov. Andrew Cuomo has instructed the state Public Service Commission develop a clean energy standard that would achieve the same effect – continued operation of nuclear power plants that provide 60% of the state's carbon-free electricity.  (NEI)