At-Risk Nuclear Plants: Challenges and Opportunities

1. At-Risk Nuclear Plants: Challenges and Opportunities Matthew Crozat Senior Director, Policy Development Nuclear Energy Institute New England Restructuring Roundtable June 16, 2017

2. Overview of U.S. Nuclear Fleet Merchant Regulated • 99 operating reactors at 60 sites • ~100 GW installed capacity • In 2016, nuclear plants provided 805 million MWh of electricity • 92% capacity factor in 2016

3. Challenges Facing U.S. Nuclear Fleet Failure of markets to recognize environmental attributes Low growth in electricity demand Continuing surge in supply of low-cost shale gas Fuel/technology diversity is undervalued State and federal policies that promote only renewables Transmission constraints Market design issues

4. Premature Nuclear Plant Shutdowns • 11,857 MWe of baseload capacity • 96 million MWh of generation • 60 million short tons of CO2 avoided • Approximately 10,000 direct jobs

5. Impacts from Closing a Nuclear Plant (1) • Emissions increase • Vermont Yankee’s generation was completely replaced by natural gas – emissions increased • San Onofre lead to an addition 9 million tons • Communities are stressed • Loss of hundreds of well-paying jobs • Carlton, WI lost 70% of budget after Kewaunee • Uncertainty weighing on Davis-Besse, Palisades

6. Impacts from Closing a Nuclear Plant (2) • Electricity prices increase • Lost nuclear electricity would be replaced by plants previously too expensive to run • Studies estimate significant potential impact of losing operating nuclear plants • California consumers paid $350 million more for electricity following San Onofre closure

7. Searching for Regional Solutions • FERC Technical Conference • NEPOOL Integrating Markets and Public Policy • Can state policy goals be met through the market? • Three main proposals: • Forward clean energy market • Two-tiered capacity market • Carbon adder on fossil generators • States are key stakeholders • PJM, NYISO also exploring possibilities

8. Solutions Emerging Among the States Closing nuclear facilities “would eviscerate the emission reductions achieved through the state’s renewable energy programs, diminish fuel diversity, increase price volatility, and financially harm host communities.” – New York Gov. Andrew Cuomo Dec. 2, 2015 • State approaches to nuclear have mirrored renewable policies • New York – Clean Energy Standard with tier for ZECs in parallel with RECs • Illinois – Zero-emission credits, similar to New York (2016) • Connecticut – proposal for sales to utilities through state procurement

9. Zero Emission Credits • Analogous to Renewable Energy Credits • Directly prices non-emitting attribute • Based upon Social Cost of Carbon • Limited to eligible plants • Credit reduces if forecasted revenues rise

10. Connecticut Efforts • Legislation • Allow a state procurement for a portion of Millstone’s generation to be sold directly to utilities • Passed Senate 23-9 • Not called for a vote in House • Millstone • Largest generator in New England • 97% of state’s non-emitting electricity

11. The Value of Nuclear Energy to America Source: The Nuclear Industry’s Contribution to the U.S. Economy, The Brattle Group, July 2015