June 19, 2019 / 7:12 PM / 4 months ago

UPDATE 2-Governor wants Pennsylvania to join greenhouse gas reduction program

 (Adds details in paragraphs 5-6)
    By Scott DiSavino
    June 19 (Reuters) - Democratic Pennsylvania Governor Tom
Wolf asked Republican lawmakers on Tuesday to authorize the
state to join a program to reduce greenhouse gas emissions in
several Northeastern U.S. states, according to a report from the
Associated Press.
    An analyst at Height Capital Markets in Washington said on
Wednesday that discussion on the market-based Regional
Greenhouse Gas Initiative (RGGI) was likely related to a nuclear
bailout deal, that would provide subsidies to prevent reactors
from retiring. 
    The governor's office, however, said Wolf did not talk to
lawmakers about a nuclear bailout on Tuesday and that the AP
story came from state fiscal year-end budget negotiations, which
Wolf was not commenting on.
    Height Capital Markets said momentum to join RGGI is gaining
in Pennsylvania but noted it was unclear at this point whether
the Republican-majority legislature would be willing to
authorize joining RGGI in exchange for nuclear subsidies.
    Legislators in Pennsylvania have been working on a plan to
subsidize nuclear power to keep reactors from retiring.
            
    Pennsylvania's nine nuclear reactors provide thousands of
jobs and most of the state's non-carbon emitting generation.
    In recent years, electricity prices have been depressed by
cheap natural gas from shale fields, including the Marcellus in
Pennsylvania, and increased use of renewable power. This has
made some nuclear and coal plants uneconomical, and forced
generators to shut several units over the past five years.
                                                
    Joining RGGI would create additional costs for several power
companies that operate coal plants in Pennsylvania, like
FirstEnergy Corp's        bankrupt FirstEnergy Solutions unit.
    FirstEnergy Solutions said it could shut its 2,490-megawatt
(MW) Bruce Mansfield coal plant and the 1,808-MW Beaver Valley
nuclear plant in Pennsylvania in 2021 unless the state or
federal government finds a way to provide more money for the
facilities.             
    One megawatt can power about 1,000 U.S. homes.
    FirstEnergy Solutions said it has not seen the details of 
Wolf's RGGI proposal but said it "applauds (the governor) for
continuing the conversation about carbon free energy generation
... (and) looks forward to remaining part of the discussion and
greenhouse gas reduction solution."    
    A nuclear bailout plan, however, did not come soon enough
for Exelon Corp's         Three Mile Island plant, the site of
the worst nuclear accident in U.S. history in 1979. Exelon said
in May it would shut the one reactor operating there on Sept.
30.             
    The state's other reactors are operated by Exelon at
Limerick and Peach Bottom and privately held Talen Energy at
Susquehanna.
    Height Capital Markets expects Pennsylvania legislators will
resume negotiations on a nuclear bailout in the autumn and noted
Wolf's comments appear to be an early public nod to negotiations
occurring behind the scenes.

    
 (Reporting by Scott DiSavino; editing by Jonathan Oatis and
Marguerita Choy)
  
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