Beset by low natural gas prices and tax advantages for its competitors, the nuclear power industry is seeking new tax credits to help it find its footing in an increasingly challenging marketplace.
The Nuclear Energy Institute’s newly tapped president and CEO Maria Korsnick said last week that the trade association is exploring a proposal for new production or investment tax credits to help “even the playing field” against other power sources.
Korsnick currently serves as NEI’s chief operating officer and will take over as president and CEO at the start of 2017, the association announced earlier this month.
She said the credits could be temporary, helping to sustain the industry until the Federal Energy Regulatory Commission, which regulates the market for electricity shared by utilities across the electric grid, enacts changes that she said would more accurately reflect nuclear’s value as a reliable, low-carbon energy source. Korsnick could not predict when FERC would act.
“The long-term fix will go through FERC policy,” Korsnick said on nuclear market fixes. “Depending on how long that takes, we might have to also look at things like tax credits that some of the other generation sources enjoy in order to just even that playing field. I would call that a bridging strategy.”
Sen. Ron Wyden, D-Oregon, the Finance Committee’s top Democrat — and possible chairman if his party assumes control of the chamber after election day — told CQ Roll Call this week that he sees growing momentum for a tax overhaul in the 115th Congress. Such an overhaul could include nuclear power credits.
The nuclear industry has faced a host of issues in the past decade that have shrunk its profits and even caused some plants to shut down over cost concerns. Among those issues is an influx of cheap natural gas from the U.S. fracking boom and a national energy policy aiding renewable sources like wind and solar. Both have undercut nuclear plants in unregulated electric markets.
“If you look at what other generating entities have, whether that is a production tax credit or whether that is an investment tax credit, there are obviously things we will be exploring for the nuclear fleet,” Korsnick said.
While its low-carbon profile has softened resistance to nuclear power, many environmental groups still oppose its use because of issues including plant safety, waste disposal, security and worries about proliferation, according to the Natural Resources Defense Council’s Matthew McKinzie, a senior scientist with the group.
“NRDC preferred option to address climate change is renewable technology,” McKinzie said. “We would take issue with calling nuclear clean energy.”
Potential nuclear tax credits would join a host of other energy tax credits that lawmakers have already proposed. In addition to extending wind and solar credits during last year’s omnibus negotiations, lawmakers have been pushing credits for a list of smaller technologies, including geothermal and fuel cells. Credits for those other technologies were agreed to in the negotiations, but were inadvertently left out of the final law.
Senate Majority Leader Mitch McConnell, R-Ky., suggested such credits could move during the lame duck session, but it’s not clear if Congress has the time or votes to take them on.
Lawmakers have also pushed tax credits for other technologies, including carbon capture and sequestration, led by Sens. Heidi Heitkamp, D-S.D., and Sheldon Whitehouse, D-R.I., and energy storage technologies, led by Sen. Martin Heinrich, D-N.M., to help spur innovation in those areas.
Korsnik said lawmaker support for tax credits for her industry “depends on who in Congress you talk to.”
“The challenge depends on how you structure it,” she added. “It depends on how much they cost, and the costs to the taxpayer are always a big deal and they are a big deal to us as well.”
The “bridging” credits are part of a much larger strategy that Korsnik outlined to reporters: the United States needs to start valuing the reliability and environmental benefits that nuclear energy provides to the energy mix.
“What we don’t want is to wake up five, six years later and say how silly was that?” Korsnik said. “We were in this great position. We had this around the clock, always on, power. Environmentally friendly, really helpful to the reliability of the grid, works at all these times, and we let it go and now we figured out how important this is. That’s what we want to prevent. We want to have that wakeup call now to say don’t let that happen.”
“We’re almost taken for granted,” she added.
Originally published Oct. 14.