The nuclear option(s): Lawmakers debate the merits of shoring up struggling nuclear power plants or leaving market forces alone.

• Author: Shea, Daniel
• Position: ENERGY

The window was narrowing. There were just a few short weeks remaining before the end of Illinois' legislative veto session, and lawmakers were working around the clock to squeeze out a compromise on an issue that had divided them for years.

The nuclear power industry in Illinois was struggling. Some accused the owner of the state's nuclear plants, Exelon Corp., of looking for handouts, of trying to force customers to prop up unprofitable plants. The company's message, however, was unwavering: Without support, it would be forced to close three of the 11 reactors in the state, reducing the state's carbon-free electricity by about 20 percent, based on data from the U.S. Energy Information Administration.

When June 2016 passed without legislation, Exelon announced that it would shutter its worst-performing nuclear plants by the end of the year.

Lawmakers were faced with a dilemma: intervene to preserve the struggling carbon-free resource or let market forces determine the fate of the industry, its employees and the state's future energy mix.

Unlikely Place for a Compromise

In a state where the Republican governor and the Democratic legislature had been at an impasse over the budget for nearly two years, Springfield, Illinois, appeared to be an unlikely place for a compromise--let alone one involving nuclear power.

And yet, during a narrow two-week window in November, Illinois legislators drafted a bipartisan energy reform package-eventually known as the Future Energy Jobs Bill--that included provisions to assist the state 's struggling nuclear plants. Some coal and natural gas plants argued that the nuclear component would put them at a disadvantage, while some environmental groups pressed the state to invest in renewables.

The bill changed about 30 times, gaining momentum with each iteration, as legislators sought the necessary votes. Eventually, the bill gained bipartisan support and the governor's blessing.

"The success of the Future Energy Jobs Bill comes from one major theme: compromise. Business, environment and labor all worked together to find a way to protect jobs while also protecting the environment by providing incentives that will drive growth in the renewable energy sector," says Senator David Koehler (D).

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On Dec. I, 2016, with the final compromise made, Illinois became the second state to finalize a policy aimed at preserving nuclear power plants.

Four months earlier, facing the possible shutdown of two struggling plants, the New York Public Service Commission adopted its own energy reform package with support for at-risk nuclear plants--part of Governor Andrew Cuomo's " Reforming the Energy Vision" initiative to modernize the electric system and reduce carbon emissions.

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The Market Conundrum

The nation's 99 commercial nuclear reactors account for around 20 percent of the electricity generated in the U.S., and about 60 percent of the carbon-free electricity. Since 2013, six reactors have permanently closed and another I 0 to 15 reactors are at risk of closure, according to the Nuclear Energy Institute.

Like all businesses, these plants need to turn a profit to remain viable. A recent analysis by Bloomberg New Energy Finance found that more than half of the operating nuclear power plants in the U.S. were losing money, with plants that sell power on the wholesale market being particularly vulnerable. Whether this is the result of an efficiently working market or of subsidies and faulty market design is the source of much debate.

Policymakers across the country--particularly in Connecticut, New Jersey, Ohio and Pennsylvania--now face the same dilemma as their colleagues in New York and Illinois: whether to intervene in the market, or let the plants close.

Once a nuclear plant shuts down, it will never reopen. The prospect of losing plants raises concerns about environmental impacts, jobs...