We recently highlighted an NRC request for information that seeks input on possible changes to the NRC fee processes. These efforts are important steps toward achieving greater transparency, increased accountability, and improved stakeholder acceptance of the costs of the NRC’s regulatory activities. But, we also raised the possibility of broader changes to the NRC fee structure, including elimination of NRC fee recovery entirely. The need for substantial reform has never been greater.
Nuclear power plants are facing challenging economic conditions around the country. The market failures creating these conditions are caused, in many cases, by policies that promote and subsidize renewables, such as production tax credits and renewable portfolio standards. Perversely, these policies are also threatening the long-term viability of the largest sources of carbon-free power in the U.S.—nuclear energy. This is why a number of states, such as Illinois, Ohio, and New York, are taking steps to ensure that these market failures are addressed. But, there remains a need for national action to address the market failures more broadly.
Unlike wind and solar, existing nuclear does not receive subsidies in the form of production tax credits, nor is nuclear included in renewable portfolio requirements. Instead, each reactor licensee pays an NRC annual fee of approximately $5 million. Eliminating the annual fee paid by each reactor to the NRC would be a nuclear-focused, partial “fix” for current market failures. Such a change would help to reduce the market distortions among low carbon generation sources caused by renewable policies, while maintaining the existing incentives that promote renewables.
Although eliminating annual fees would require additional appropriations from Congress, some common ground exists. For supporters of efforts to combat climate change, there is an urgent need to address the policies that are undermining carbon free nuclear generation. Reports of increased carbon emissions in Southern California and Vermont following the closure of SONGS and Vermont Yankee, respectively, only underscore the need to maintain existing nuclear generation to meet carbon emission targets. And, members of Congress are already raising difficult questions about the adverse effects of NRC fees on the industry and its future. The time may be right for an approach that reduces fees levied on nuclear generation, while simultaneously supporting carbon free generation.