The nuclear power industry supports President Barack Obama’s plan to force coal plants to close, but a pending Supreme Court case threatens to cause huge problems for nuclear plants.
Currently the Federal Energy Regulatory Commission (FERC) is embroiled in a Supreme Court battle over a program called demand response, which seeks to cut energy use by compensating retail customers who reduce consumption during peak power grid operation. FERC is forcing energy companies to participate, a move that opponents argue exceeds their legal mandate. According to Utility Dive, demand response keeps wholesale energy prices low, cutting into profits in the nuclear and coal industry.
FERC’s actions are the central issue in the case as their policy would directly affect retail prices in the energy industry which lie outside its regulatory mandate. It would devastate utility companies and energy producers alike, who will have to deal with reduced demand for their product. The D.C. Court of Appeals struck down the FERC rule in May, and if the Supreme Court overturns that ruling, the nuclear industry, along with coal, will suffer devastating financial losses.
The court case puts the coal and nuclear power industries on the same side, despite arguments from environmentalists that demand response is key to hitting Obama’s emission reduction goals. The Hill reports that green energy groups such as the Sierra Club are generally opposed to nuclear power due to concerns over its potential impact on the environment.
“The reason these plants are uneconomic is because renewable energy and demand response companies are driving down the value of nuclear power plants,” said John Coequyt, international climate program director at the Sierra Club. “The consequences of those policies are much broader than just the nuclear industry.”
The nuclear industry finds itself in a unique position, as environmentalists argue for demand response to reduce emissions, while proponents of nuclear power argue it is the only viable way to reduce pollution, and demand response would significantly hamper their efforts. It’s a situation that finds factions of the same clean air movement at odds over how best to reduce overall greenhouse gas emissions.
California showcases this fight, as the Golden State has recently been pushing even stricter demand response requirements on energy companies as it tries to hit its lofty carbon emission reduction goals. According to Environment & Energy Publishing, California will have a tough time meeting those goals without demand response, meaning the nuclear industry’s loss in the court would be their gain.
Steven Weissman of the University of California, Berkeley’s Goldman School of Public Policy said without demand response forcing the energy industry towards renewables, “we cannot meet greenhouse gas reduction goals.”
The nuclear power industry is currently in a crisis as recent plant closures mount and the industry struggles to compete with cheaper energy sources in the market, reports The Hill. Entergy, which operates nuclear power plants in America, announced in October it would be closing the Pilgrim Nuclear Plant in Cape Cod. On November 2, Entergy announced another plant closure, this time the James A. FitzPatrick Nuclear Power Plant in Oswego New York, reports Atomic Insights.
In the wake of these closures, the industry has been lobbying the administration to increase government assistance to nuclear power, arguing the nuclear industry holds the key to cleaner air. The Hill reports Richard Myers, vice president of policy development at the Nuclear Energy Institute (NEI) said, “You cannot sustain reductions in carbon emissions or reduce carbon emissions without a pretty hefty contribution from nuclear power.”
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