Morning all,

Regulators and businesses in Delaware should pay attention to growing pressure for subsidies for aging nuclear and coal-fired power plants.

Low-cost natural gas and alternatives sources like  solar are driving down prices and leaving operators with two tough choices, shut down the plants or seek subsidies from customers.

New Jersey utility operator PSE&G is warning that subsidies are needed to keep its massive Salem and Hope Creek nuclear plants viable in the long term.

Meanwhile, Ohio coal  magnate   Robert Murray says power supply faces a grim future if aging coal-fired plants continue to shut down. He warns that if coal’s share of the energy mix drops below 25 percent, the nation faces a potential catastrophe.

Murray wants to  buy coal-fired power plants  and use his coal mines to provide the fuel. That would presumably mean relief from emissions standards and a bargain price for the plants  that might be aided by the recent bankruptcy of. a large power plant operator.

PJM, which has successfully managed the grid in this region in recent decades, is caught in the middle. It has asked federal energy regulators to come up with electricity pricing mechanisms that would lessen pricing distortions caused by subsidies.

The grid operator has stated that the grid is currently in good shape in handling power demands. 

Still, Delaware may be in a vulnerable position depending on how the game is played.  Subsidies in other states could lead operators of older power plants here  would also seek bailouts that would be financed  by ratepayers.

Delaware is down to one coal-fired unit at the NRG complex in Sussex County that some in the state would like to shut down, despite tens of millions of dollars spent on pollution equipment.

Complicating the issue further are mandates on alternative energy sources comprising a larger chunk of the total power market in Delaware

Critics claim that such mandates also amount to subsidies that are borne by ratepayers and have made Delaware less competitive in terms of electric costs.

As of now,  solid information is needed on the effect of coal and nuclear plant shutdowns, rather than trotting out doomsday  predictions from eco-activists or coal barons.

Enjoy the warm weather.  The newsletter returns on Monday. – Doug Rainey, publisher