FirstEnergy Corp. and its subsidiaries should be found in breach of their federal regulatory requirement to ensure they can fund decommissioning of three nuclear power plants scheduled for closure in coming years, a nongovernmental environmental organization said in a petition to the U.S. Nuclear Regulatory Commission.
Saying the facilities were no longer economically viable, FirstEnergy Solutions on March 28 announced it would shut down the Davis-Besse Nuclear Power Station in Ohio, Perry Nuclear Power Plant in Ohio, and Beaver Valley Power Station in Pennsylvania between May 2020 and October 2021. Three days later, the parent company filed for Chapter 11 bankruptcy.
In its March 27 petition, the Environmental Law & Policy Center said FirstEnergy’s nuclear decommissioning trusts and parent company guarantees could not be counted on to cover the costs for cleaning up the four reactors at the three plants. It noted FirstEnergy’s financial troubles and said external trust funds as of March 2017 were $350 million short of the estimated $2.1 billion projected cost of decommissioning the three sites.
The situation puts the power company in breach of federal rules intended to ensure nuclear plant owners have the money to clean them up once they shut down, according to the petition.
Given the then-pending bankruptcy filing, “and FE’s rapidly deteriorating financial situation, in order to ensure compliance with federal laws and regulations, ELPC requests that the NRC give this petition immediate consideration and promptly issue Demands for Information and Notices of Violation” to FirstEnergy Corp., FirstEnergy Solutions, and nuclear licensees FirstEnergy Nuclear Generation and FirstEnergy Nuclear Operating Co., the Chicago-based organization said in its petition, which was posted Wednesday on the NRC website.
Specifically, the NRC should find the companies to be operating nuclear sites without sufficient decommissioning funds, and then fine them and suspend the licenses for the three power facilities. It should also demand the FirstEnergy companies be required to provide site-specific decommissioning funding plans for the three plants, along with information on external trust funds and parent guarantees that would pay for the work.
The NRC had no immediate comment on the petition. FirstEnergy Solutions referred to an April 4 notice from the regulator that said decommissioning for the three plants “continues to be sufficiently funded under NRC regulations.”
The Environmental Law & Policy Center figure for FirstEnergy’s decommissioning funding shortfall is actually almost $85 million smaller than the figure included in the company’s 2017 filing with the NRC.
The numbers are the same for three reactors: Beaver Valley No. 2 and the single Davis-Besse and Perry reactors. However, the FirstEnergy figures on Beaver Valley reactor No 1. indicated that trust fund has a $279.8 million shortfall. But the policy center’s petition contends Beaver Valley No. 1’s trust fund shortfall is $195.3 million.
The FirstEnergy trusts can continue to accrue funds.
FirstEnergy is also seeking federal and state assistance to keep the nuclear power plants operational. Most notably, the company asked Energy Secretary Rick Perry to order a regional power clearinghouse to financially bolster the company enough to keep its reactors and other power plants online.
The Akron, Ohio, company wants the clearing house — PJM Interconnection — to sign contracts that guarantee FirstEnergy’s nuclear and coal plants can fully recover their costs along with a return on their investments.
Section 202(c) of the Federal Power Act says the U.S. energy secretary can during an electricity-supply emergency “order temporary connections of facilities, and generation, delivery, interchange, or transmission of electricity.”
Perry has suggested doubt about whether that applies to this case, but that the request is under review. This week, DOE did not respond to requests for an update on its 202(c) deliberations.
PJM Interconnection said in a March 30 letter to Perry that the announced reactor closures don’t represent an emergency.
On April 13, the American Petroleum Institute sent a letter to President Donald Trump requesting that DOE reject the 202(c) application. Market forces should determine how oil, coal, natural gas, and nuclear power should co-exist, the industry organization said.
“Regulators chose to unfetter the natural gas market and allow a truly competitive model to emerge. The entrepreneurial innovation this released resulted in the technological advances that have made the extraction of shale oil and natural gas at low cost a resounding success and propelled this nation to energy dominance. This would not have been possible without the competition that was enabled by regulators having the courage to ‘let the market work,’” API President Jack Gerard wrote to Trump.
Meanwhile, FirstEnergy hopes the Ohio and Pennsylvania legislatures will help it out.
Two identical bills from 2017 in the Ohio General Assembly would provide up to $178 million annually to FirstEnergy Solutions by increasing the bills for residential and nonresidential ratepayers. Both bills are still stalled in the committee stage.
In Pennsylvania, FirstEnergy Solutions Generating Cos. President Donald Moul and executives with Exelon and Talen Energy asked the nuclear caucus of the Pennsylvania General Assembly for help in keeping the two Beaver Valley and the Three Mile island reactors operating. The three corporations own Pennsylvania’s five reactors.
FirstEnergy companies own the two Beaver Valley reactors and Unit No. 2 at Three Mile Island, which has been nonoperational since the infamous 1979 accident.
Exelon owns Three Mile Island’s unit No. 1, which it announced in 2017 that it would close in 2019 if it does not get financial aid from the state of Pennsylvania. So far, no actual legislation has emerged in the Pennsylvania General Assembly.
Talen owns the two-reactor Susquehanna plant in Allentown, which is remaining in operations.
The three executives pointed to natural gas producing cheaper power than the nuclear industry. “It’s almost impossible for the nuclear industry to be competitive,” said Debra Raggio, senior vice president for regulatory and external affairs at Talen Energy.
