Trump May Have Unintentionally Killed U.S. Nuclear. President Trump has a different view of climate change than the previous administration. His decision to disassociate the U.S. from the Paris Climate Accords has received the lion’s share of recent publicity in this regard. Now the President’s March 28th Executive Order (EO) could harm the U.S. nuclear power industry (although we doubt that was his intent). The EO directs the EPA, among other things, to review the previous administration’s “Clean Power Plan”. There are two main parts to the CPP with respect to electric power generators: 1) carbon pollution emissions guidelines for both new and existing generation and 2) federal efforts to measure the social costs of carbon (SC-CO2) as well as nitrous oxide and methane. It is the latter that concerns us here. Two states, New York and Illinois, have recently taken steps to subsidize aging nuclear generating stations. Both states used a variant of the SC-CO2 concept to justify above market payments to these base load power stations. The states’ rationale was simple. This subsidy was not related to either capacity or energy production. Rather it was an indirect payment for power produced with certain environmental attributes, in this case, low carbon emissions. Regulatory personnel in NY have argued that nuclear subsidies, called Zero (carbon) Energy Credits were no different than the state program supporting renewable energy via Renewable Energy Credits. In addition, these so-called RECs fall within the state’s jurisdiction. However, the administrative price setting mechanism for nuclear ZECs was based on benefits ascribed to the social cost of carbon.
Oil Price 22nd ~July 2017 read more »