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Save Nuclear Jobs with Less Government, Not Corporate Welfare
“We have the responsibility to ensure that we keep these jobs in Pennsylvania and not to allow these plants to prematurely close,” said the Lancaster County Republican as he opened a session of the legislative Nuclear Energy Caucus.
Sen. Aument is right to worry about the loss of jobs, but costly subsidies are the wrong approach.
New Jersey recently became the fourth state to approve nuclear subsidies. The Garden State’s subsidies will cost an estimated $300 million a year, or about $30-$40 for each residential customer.
At the heart of the matter is whether nuclear plants should be paid more for their electricity because the plants are an extremely reliable energy source. Last year, federal regulations proposed by the Trump administration to subsidize nuclear and coal energy based on their “reliability” failed.
The reality is state legislators are ill-suited to judge the real value of different sources of energy and creating new subsidies would not only artificially raise energy costs, but stymie new innovation.
Having worked in the nuclear industry for 10 years, this writer remains a fan of the technology. However, subsidies and regulations are notorious for producing unintended consequences and perversely skewing markets.
For example, current nuclear regulations are hamstringing the introduction of more modern nuclear plants. There are new plant designs reported to be safer and more efficient than the 40-year-old designs operating today, but the sheer regulatory cost of upgrading a nuclear power plant discourages improvement.
Politicians should reduce government interference in the economy and allow participants to compete on the merits of their business models. Specifically, lawmakers concerned about the future of nuclear energy should:
- Support reform of federal nuclear regulations that increased the cost of compliance to $2 billion from $629 million between 2006 and 2015.
- Eliminate all state corporate welfare, including “green energy” subsidies that put nuclear and other energy sources at a disadvantage.
- Reduce business taxes that increase the costs of all companies.
There are many sensible actions that Pennsylvania lawmakers can take to preserve existing Pennsylvania jobs and make the state more attractive to new business.