Threatening closure of Three Mile Island nuclear reactor, Exelon says Maryland's Calvert Cliffs plant remains viable

Exelon Corp. said Tuesday that it will close the infamous Three Mile Island nuclear power plant in Pennsylvania in 2019, a decade and a half ahead of its scheduled retirement, unless state officials there offer clean-energy subsidies to nuclear generation.

The company's Calvert Cliffs nuclear plant in Southern Maryland is meanwhile "not currently among those plants identified as being at risk financially," and therefore Exelon does not plan to seek similar clean-energy incentives in this state, spokesman Paul Adams said.

Energy industry experts said that doesn't mean similar economic troubles aren't ahead for the Lusby facility, however.

Three Mile Island, site of a 1979 partial meltdown that was the worst nuclear disaster in U.S. history, and other nuclear plants across Pennsylvania generate nearly all of the state's carbon-free energy supply, Exelon officials said. Yet an influx of power to the grid from natural gas-fired plants — and, to a lesser extent, wind and solar — is cutting into power prices and making the Susquehanna River facility 30 miles north of the Maryland line lose money, they said.

The closure decision comes amid a growing debate over what sorts of power plants deserve "green" energy incentives, usually in the form of mandates requiring utilities to buy renewable energy, and whether states should step in to preserve nuclear jobs — and carbon-free power.

Exelon CEO Chris Crane called the company's position an opportunity for Pennsylvania "to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide."

New York and Illinois, where Exelon also owns fleets of aged nuclear reactors, already have passed legislation giving those plants incentives similar to those of wind and solar farms.

While nuclear power doesn't generate greenhouse gases, renewable energy advocates say they don't consider it "clean" and argue that subsidies earmarked for renewable power should be reserved for newer, less proven electricity sources.

But others say if the plants shut down as a result of competition from renewable energy sources, the baseload electricity reactors provide likely would be be replaced with carbon-emitting generation.

Three Mile Island generates enough power for about 800,000 households. For Calvert Cliffs, that figure is more than 1 million.

Tom Schuster, a senior campaign representative for the Sierra Club in Pennsylvania, called it a "thorny issue" for the state. The environmental group fears natural gas-fired generation would gain from Three Mile Island's demise, and wants to see more investment in wind and solar power.

"We don't support a bailout that gives preferential treatment to nuclear energy," he said. "What we do support is putting a price on carbon."

Pennsylvania Gov. Tom Wolf has made no commitment to support nuclear generation. Wolf said in a statement Tuesday that he is concerned about layoffs at Three Mile Island and open to discussions. Exelon employs 675 people at the plant.

Chicago-based Exelon has maintained a regional headquarters in Baltimore since buying Constellation Energy Group and Baltimore Gas and Electric Co. in 2012. No workers here would be affected by the Three Mile Island closure, Adams said.

Three Mile Island is among a group of nuclear plants that Exelon and other reactor owners have said are no longer profitable because their age makes them more expensive to operate, and because competition is reducing revenue. Three Mile Island is challenged in part because one of its two reactors was shut down permanently by the meltdown, making it less profitable.

The March 1979 incident, the result of equipment and operator error, prompted 144,000 people to evacuate amid conflicting or ill-informed information from utility and government officials. A small amount of radiation was released but caused no contamination outside the site.

The plant was built during a golden age for nuclear power, on a sliver of land in the Susquehanna, 10 miles south of Harrisburg. The existing reactor went online in 1974, while the other unit launched just months before the partial core meltdown.

The outlook for nuclear plants has since dimmed. Astronomical costs have made construction of new reactors nearly impossible, and existing plants have been undercut by the natural gas boom, which has slashed electricity prices in competitive markets.

Wind and solar power, meanwhile, have shown strong gains, though they still generate a small fraction of electricity used. And electricity consumption plateaued as the recession reduced power demand and energy efficiency improved.

That has prompted other states to step in with policies to preserve nuclear jobs and the carbon-free power electricity the plants generate.

In December, Illinois approved $235 million a year to prop up Exelon nuclear plants in the Quad Cities and Clinton, six months after the company threatened to shut them down. In August, New York approved a multibillion-dollar bailout for three Exelon plants on Lake Ontario that also encourages greater investment in renewable energy.

Those plants and Three Mile Island were faring poorly in what are known as "capacity auctions," an annual exercise in which power plants bid to sell specific amounts of electricity, helping grid operators ensure that there won't be brownouts on hot summer days.

But Calvert Cliffs has never failed to capture the prices and electricity load it offers in the auctions, Adams said, an indication that the plant remains economically strong.

Jackson Morris, director of the Natural Resources Defense Council's Eastern Energy Project, suggested that Maryland officials should nonetheless start planning for how to replace the carbon-free energy Calvert Cliffs provides, assuming it eventually will face economic struggles. The plant's two reactors are scheduled to retire in 2034 — same as Three Mile Island's scheduled decomissioning — and 2036.

A 2013 report from the Institute for Energy and the Environment at Vermont Law School listed Calvert Cliffs was among nearly 40 nuclear plants at risk of closing early because of economic or other factors. The list also included Three Mile Island and the New York and Illinois plants that have received bailouts.

Solar and wind power have shown strong growth in Maryland in recent years, though solar still makes up a small fraction of the state's renewable energy portfolio.

The state's wind farm capacity looks likely to grow dramatically in the 2020s, with two offshore projects recently approved for ratepayer subsidies. Much of the wind farms that currently benefit from similar subsidies are outside of Maryland.

"The way we've ended up in these tough situations is because there hasn't been that foresight," Morris said. "Regulators and politicians are paying the most attention to the squeaky wheel."

An earlier version of this article misstated how much of Pennsylvania's carbon-free energy supply Three Mile Island contributes. The Sun regrets the error.

The Associated Press contributed to this article.

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