Under a renewable energy mandate, the Palo Verde Nuclear Generating Station is either at risk of closing or will provide electricity for years to come. It depends on who you ask.EXPAND
Under a renewable energy mandate, the Palo Verde Nuclear Generating Station is either at risk of closing or will provide electricity for years to come. It depends on who you ask.
Tom Carlson

Fate of Nation's Largest Nuclear Plant Is at the Heart of Clean-Energy Battle

To hear the utility tell it, an upcoming ballot measure would be doomsday for the largest nuclear plant in the country.

Arizona Public Service paints a dark picture. A constitutional amendment mandating renewable energy quotas would create too much inflexible power from solar panels, overwhelming the grid, the utility says. At the same time, ramping up and shutting down the Palo Verde Nuclear Generating Station to meet Arizona’s fickle energy needs throughout the year would be prohibitively expensive.

If the ballot measure by Clean Energy for a Healthy Arizona succeeds, APS said, the utility would have to mothball Palo Verde.

Now, a prominent conservation group is striking back. The Natural Resources Defense Council questions the utility’s logic in a new study.

In the report released on June 5, the NRDC argues that the closure of Palo Verde is an empty threat, borne out out of the desire to see a renewable energy ballot measure fail.

“I think APS is a very political actor,” said Dylan Sullivan, a senior scientist at the NRDC, who also works for the Clean Energy campaign. “They’re trying to defeat this ballot initiative, and they are throwing everything at the wall and seeing what sticks.”

NRDC representatives said that Palo Verde would remain viable even if voters approve the measure.

Bankrolled by billionaire Democratic donor Tom Steyer and his political action group, NextGen America, the planned law would require that utilities like APS — except for Salt River Project (SRP) — generate 50 percent of its power from renewable sources by 2030, excluding nuclear power.

Even if voters approve the plan in November, implementation remains a significant hurdle for the clean energy campaign. Urged on by APS lobbyists, the Arizona Legislature passed a law in March that assigns extremely low fines, as little as $100 and no more than $5,000, for utilities that violate clean-energy mandates in the state constitution.

Rodd McLeod, a spokesperson for the Clean Energy campaign, said he does not expect the law to hold up in court.

The NRDC, which is mildly opposed to nuclear power, supports the ballot initiative.

Sullivan has dual roles with the NRDC and with the Clean Energy campaign, where he serves as the campaign's policy director and reports to the campaign manager. The NRDC is compensated by the Clean Energy campaign for Sullivan's time in a roundabout way, he said, as the NextGen-funded committee reimburses the NRDC's political action arm.

The analysis of Palo Verde's future was commissioned and released independently by the NRDC.

To write the report, the organization worked with a consulting firm, ICF. According to the firm's analysis, the Western grid can handle scaled-up renewable energy while keeping Palo Verde online.

NRDC's two main arguments: Solar energy resources and Palo Verde are cheaper to operate than coal and natural gas plants, so removing fossil fuels from the energy mix makes economic sense. The NRDC also predicts that electricity demand in Arizona will “soak up Palo Verde’s generation, and the output of extra solar, on all but a few days in the spring and fall.”

If Arizona has excess power from renewables, utilities could eventually export power to other locales such as the Pacific Northwest, the NRDC argues. But that would require APS working toward an integrated western grid system — a lofty proposal that the utility says could cost billions. The NRDC talks about western transmission projects as a future goal.

NRDC's model shows that Palo Verde is not at risk under both a renewable energy standard and APS’s latest natural gas-reliant resource plan, Sullivan said.

“The choice that Arizonans face in November is not about Palo Verde,” Sullivan said. “It’s about whether they want to fuel their future with in-state solar or out-of-state fossil fuels.”

Palo Verde, located roughly 50 miles west of Phoenix, provides carbon-free electricity to around 4 million people in the Southwest. APS operates Palo Verde and owns nearly 30 percent of the plant, which provides the utility with approximately a quarter of its electricity.

SRP owns a little under 18 percent, and various utilities in California, Texas, and New Mexico own the rest. APS says Palo Verde's long-term viability affects these other owners, too. What's unclear is whether APS could unilaterally close the plant: On Monday, representatives for SRP were unable to say how the municipal utility would respond if APS chose to shutter Palo Verde, and APS wouldn't address this specific hurdle to the plant's closure.

But how, exactly, could a ramped-up solar energy array overwhelm the grid during the days when the demand for electricity is low?

The APS argument goes like this: Nuclear and solar power are inflexible. If the sun is shining or the nuclear plant is on, electricity is being generated. Those watts have to zip somewhere via the grid with a specific purpose, such as powering your air conditioner or keeping the milk in your refrigerator cold.

Deriving electricity from natural gas or coal, on the other hand, is more flexible because these fuels aren't tied to the wind or sun. Flip a switch, and a combustion gas turbine roars to life, spewing carbon into the atmosphere, but enabling utilities to ramp up power immediately to meet any increased demand. (Nuclear plants can't switched on and off like that.)

Because electricity demand is lower in Arizona during the temperate months of spring and fall, a huge increase in solar-generated electricity during the middle of the day would create problems for the grid when combined with the 24/7 powerhouse of Palo Verde, according to APS.

“When they overlap, you have to decide which to turn off, because you can’t operate both,” said Jeff Burke, the director of resource planning at the utility. The NRDC’s study doesn’t take into account these reliability concerns, he said.

Under some futuristic scenarios, battery storage could capture energy generated by renewable sources to use later, when demand is high but the sun isn’t shining. But these plans are still in development, even in early-adopter states like California, and the technology is expensive. Wind resources are unreliable in Arizona, so in order to meet the clean-energy mandate, utilities here will have to rely heavily on solar power. All told, energy storage is pretty much essential if Arizona utilities want to use solar power to serve customers when the sun is missing in action.

In light of these logistical challenges, Burke said that the math in the NRDC’s report doesn’t work. “It appears to be an extremely flawed study,” he said.

The study overestimates the amount of energy that Arizona utilities could export to California or other locales on the Western grid, Burke said — especially because Arizona already benefits from what's known as "negative pricing," when California utilities pay Arizona to accept extra power generated by renewables that Californians can't use.

Although APS is trying to develop battery storage programs while moving to an energy portfolio that includes more renewables, Burke said that ramping up solar power to the detriment of Palo Verde would be a mistake.

“This is an artificial mandate that says, ‘Put renewables on quickly, whether you can use them or not,’” Burke said.

Yet the NRDC report has hit a nerve, judging by the reaction from those opposed to the clean-energy measure.

Arizonans for Affordable Electricity, funded by APS' parent company, pointed to a recent Republican-led inquiry of the NRDC from the House Natural Resources Committee. On June 5, Committee Chairman Ron Bishop of Utah ordered the NRDC to produce documents related to the group’s relationship with the Chinese government.

In a letter to the NRDC’s president, Bishop suggested that the NRDC may be out of compliance with the Foreign Agents Registration Act based on the organization's softball stance on the Chinese government's environmental initiatives. The APS-funded lobbying group seized on the congressional inquiry to decry the NRDC’s alleged relationship with “Communist China.”

In a vague response, the NRDC's strategic engagement director Bob Deans said, “We’re proud of our work, in China and elsewhere, helping to create a more sustainable future for everyone, and we look forward to discussing that work with Chairman Bishop and the committee.”

Putting aside the foreign-agent development, both sides of the clean energy fight scream that their opponents are using Palo Verde as a bargaining chip.

APS and its allies say that the clean energy campaign purposefully left nuclear power out of the language of the constitutional mandate. As a result, Arizonans for Affordable Electricity spokesperson Matthew Benson argues that it's "disingenuous" for the Clean Energy campaign to push the NRDC report.

Palo Verde is an investment worth billions of dollars that is already up and running, he said.

"It’s producing a tremendous amount of clean, carbon-free electricity," Benson said. "The idea that you would do anything to threaten that seems completely contrary to the supposed aims of the initiative."

But Sullivan, the scientist with the NRDC and Clean Energy, says APS is deploying Palo Verde as a useful political talking point in the utility's fight against the initiative. APS hasn't revealed the details that portend the demise of Palo Verde under the clean energy mandate.

"APS has presented no analysis about this," Sullivan said. "They’re saying, 'Trust us.'"

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