Palo Verde nuclear plant could close if renewable-energy measure passes, APS says
The nation’s biggest producer of electricity, the Palo Verde Nuclear Generating Station, could be forced to close in the next decade if voters approve a renewable-energy ballot measure, the plant’s owners said.
The plant is run by Arizona Public Service Co., which is fighting the clean-energy ballot measure on several fronts.
Although Palo Verde is important to APS, it would not be the only nuclear plant to shut down in recent years.
Six reactors have closed since 2013 and eight more reactors are planned for shutdown before 2025, mostly because of increased competition from cheap natural gas.
The Clean Energy for a Healthy Arizona measure would amend the state constitution to require utilities to get half their electricity from renewable sources such as solar and wind by 2030.
Supporters gathering signatures in hopes of putting the amendment on the November ballot said APS is exaggerating the economic fallout of the proposal and that there is no evidence the nuclear plant would be forced to close.
APS officials said the measure would prompt so much solar- and wind-power development that there would be too much energy on the grid during mild parts of the year when Arizonans aren’t cranking up their air conditioners.
That oversupply would force the shutdown of its coal and nuclear plants, which are known as baseload facilities because their power output doesn’t fluctuate, they said. If there is more power than demand on the electrical grid, it causes problems and can even damage home appliances.
“The way we see this, it will force the closure of all our baseload facilities,” said Jeff Burke, APS’ resource planning director. “This really closes the door on a lot of different resources.”
Palo Verde provides power for millions
The nuclear plant is a crown jewel for the utility, generating about one-fourth of its energy supply. The three nuclear generators are co-owned by seven utilities in Arizona, California, New Mexico and Texas.
The plant generates enough power for about 4 million people.
Salt River Project, which serves the Phoenix area, is one of those co-owners. It would not be directly affected by the ballot initiative, but spokeswoman Patty Garcia-Likens the initiative likely would affect that company’s baseload power resources if enacted.
“The environmental goal must be to reduce carbon emission intensity, rather than try to pick a winner among competing technologies,” Garcia-Likens said.
She said SRP is taking the same approach as regulators at the Arizona Corporation Commission, which is mulling a new proposal to reduce carbon emissions but maintain the state’s nuclear plant along with more solar, wind and other renewables.
“It is the availability of all these options that leads to the most diversified and cost effective path to reducing carbon intensity,” Garcia-Likens said.
“If enacted, the proposed renewable energy mandate initiative puts all eggs in one basket … . There is a better, more commonsense way — use whatever options work best.”
It’s unclear how the other utilities who own part of Palo Verde would respond if APS were to decide to shut it down. But if a shutdown threatened reliability for any of their power systems, the U.S. Department of Energy could order the plant to remain operating temporarily as needed under the Federal Power Act.
This act has been invoked as recently as last year in Virginia to keep coal generators operating until adequate power supplies are secured for the region.
Palo Verde also represents billions of dollars in investments that APS officials hope will pay dividends through the mid-2040s when the three generators’ operating licenses expire. Early retirement would harm shareholders and utility customers financially.
And Palo Verde is the largest single taxpayer in the state, with a $55 million property-tax bill last year.
Without the nuclear plant, APS would have to build new plants to provide energy when customer demand spikes, and the company suspects that utility bills could double if the measure passes.
Closure could exacerbate problems for environment
Many experts concerned with climate change acknowledge that nuclear plants are necessary to reduce carbon emissions from fossil fuels.
Kevin Steinberger, a policy analyst with the Natural Resources Defense Council in New York, said he doubts APS would need to shut down the nuclear plant early because of the ballot measure, though his organization is seeking data to further study the initiative’s impacts.
“I have not seen any evidence the plant would need to shut down,” Steinberger said of Palo Verde. “There are plenty of fossil resources on the system APS could ramp down instead.
“Certainly, decreasing coal generation and reducing emissions from fossil resources is a main goal of the strengthened (energy standard),” said Steinberger, who has a bachelor’s from Princeton University, a master’s from Stanford University and has studied renewable-energy standards in the West.
