Angela Couloumbis and Karen Langley | Wednesday, July 5, 2017, Pittsburgh Post-Gazette
HARRISBURG — Pennsylvania’s Capitol hallways looked deserted Wednesday, even though the state is nearly a week into the new fiscal year without a complete budget.
Budget negotiators on Wednesday said that talks are continuing, but Gov. Tom Wolf and Republicans who control both legislative chambers have yet to strike a deal on a plan to pay for the nearly $32 billion in spending approved last week.
The Set Up: Pennsylvania is a deregulated energy market that operates within the PJM. One of the drawbacks of a deregulated market is that generators cannot recover the cost for plant upgrades directly from the ratepayer. Utilities have to spend capital cost then compete on the open market against every other energy sources. This has made it difficult for older coal and nuclear plants to make improvements, either necessary or driven by regulation, because the market price for energy is suppressed. This is largely due to low natural gas prices and energy demand. Plus you have energy sources- like solar and wind- that are subsided which allows those sources to enter the PJM and accept a low rate per Kw/H.
Faced with this reality, a group of PA Legislators have formed the Nuclear Caucus. At this time, it’s not clear what focus the group will take; however, they formed to find a solution to save Nuclear Power Plants. If you recall, the nuclear industry, equipped with jobs and economic numbers, have won recent victories in Illinois and New York. The policies passed require the rate payer to subside the nuclear plants through what is called Zero Emission Credits. It unclear if these laws are going to withstand the court appeal process. Nonetheless, the nuclear industry is pursuing similar laws and Pennsylvania is next on the list.
What to look for: The nuclear industry is staffing up in Harrisburg. They are currently hiring many lobbyists and former regulators to help carry the message. The opposition however is not a sleep at the switch in Pennsylvania. They are organizing early and forming powerful opposition to any subsidy.
The battle between to the side will be simple; jobs, low carbon energy, and grid reliably versus rate payers, more government subsides (tax payer money), and a less diverse energy mix.
The side hustle: With a major Natural Gas development in Pennsylvania – Marcellus Shale – they have the most to lose at this point. If the state props up nuclear it will only prolong natural gas rising as the dominate energy source. It will be interesting to see how much time and resources the gas industry uses to defeat any nuclear subsidy.
The Public Forum is a bi‑monthly KQV Radio Talk Show where Cohen & Grigsby Lobbyists and various guests discuss hot issues impacting Harrisburg, Pennsylvania, Washington, DC and the business community.
The Public Forum is a bi monthly KQV Radio Talk Show where Cohen & Grigsby Lobbyists and various guests discuss hot issues impacting Harrisburg, Pennsylvania, Washington, DC and the business community.
Our host for tonight’s show is Nello Giorgetti with guest, Gladys Brown, Chair of the Pennsylvania Utility Commission.
We hope you will listen tonight at 7:00 PM at 1410 AM, KQV.
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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.