Three Mile Island fails to secure energy-sale contract, threatening plant's future

Aug 29 - McClatchy-Tribune Content Agency, LLC - Brett Sholtis York Daily Record, Pa.

Three Mile Island was unable to land a contract to sell its electricity on the grid for 2018-2019, leaving questions about the plant's future in a competitive energy market.

Here's some info on the recent PJM auction and what the lost business means for the Exelon-owned power plant and the 700 people who work there.

What is a PJM auction?

PJM Interconnection is the entity that chooses what companies' electricity makes it onto the power grid.

PJM's website describes the company as "a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia."

Every year they hold an auction, where coal, wind, solar, gas and nuclear generators bid to sell their electricity.

Paula DuPont-Kidd, a PJM spokeswoman, said the auctions help PJM to plan for future years' energy needs.

"We need to make sure there's enough resources three years forward," Dupont-Kidd said.

She said the auctions also help the power plant operators plan by ensuring that there will be a market for their electricity before they commit to upgrades or other investments.

Why wasn't TMI's bid accepted?

PJM didn't take Three Mile Island's bid for the period from June 1, 2018 to May 31, 2019, meaning that the power plant won't be able to sell its electricity at its main point of sale.

DuPont-Kidd said generators' bid prices is the main factor, though other factors play into PJM's decisions.

Steve Kerekes, a spokesman at Nuclear Energy Institute, said competition has been tough for nuclear generators in deregulated markets such as Pennsylvania. Kerekes said low natural gas prices and energy from the heavily-subsidized wind power industry have made it hard for nuclear operators to make competitive bids.

What does this mean for the power plant?

The lost bid is certainly bad for TMI, especially since the market is already tough for nuclear plants. A recent Nuclear Energy Institute financial report mentioned that Kewaunee Power Station in Wisconsin and Vermont Yankee Nuclear Power Plant in Vermont closed down in 2013 and 2014 due to "adverse market conditions." The report also said some plants in "other competitive markets" were also at risk.

But Ralph DeSantis, Three Mile Island spokesman, said the lost bid doesn't necessarily mean TMI will close down.

"It does indicate that TMI is economically challenged," DeSantis said. "However, these auctions are only one way that TMI has value."

DeSantis said the power plant can also sell power directly to certain customers.

In addition, DeSantis said new Environmental Protection Agency regulations will make nuclear power plants more appealing, since they don't produce carbon-based pollution.

DeSantis said nuclear plants have also proven their importance, citing the winter of 2013-2014 "polar vortex" as one example where nuclear plants ramped up capacity to prevent brown-outs at a time of year when lack of electricity would endanger lives.

"The fact that TMI runs around the clock and doesn't produce carbon is a very valuable thing to the power pool," DeSantis said.

Three Mile Island unit shut down to repair electrical malfunction

What's in the future for Three Mile Island?

Peach Bottom could run out of spent fuel storage space in 2019