U.S. Nuclear Plant Shutdowns, State Interventions, and Policy Concerns

The United States has the largest nuclear power plant fleet in the world, with 93 reactors that can generate approximately 95,522 megawatts (MW) of electricity. Nuclear power has accounted for about 20% of annual U.S. electricity generation since the late 1980s; in 2020 it was 19.7%. However, the U.S. nuclear power industry in recent years has been facing economic and financial challenges, particularly plants located in competitive power markets where natural gas and renewable power generators influence wholesale electricity prices. Twelve U.S. nuclear power reactors have permanently closed since 2012, with the most recent being Indian Point 3 on April 30, 2021. Another seven U.S. reactor retirements have been announced through 2025, with total generating capacity of 7,109 MW (equal to roughly 7% of U.S. nuclear capacity). However, announced retirements have not always occurred as planned: 16 reactors previously announced for permanent closure have continued operating pursuant to state interventions that provide them with additional revenue sources. Those 16 reactors, in 6 states, represent 15,734 MW of electricity generation capacity (16% of total U.S. nuclear capacity). Many other U.S. reactors have been identified by recent studies as being “at risk” of shutdown for economic reasons, although their closures have not been announced. Economic pressure on nuclear power plants is less immediate in areas of the country where electricity prices are set by state regulators rather than markets, such as in much of the Southeast. Under such “traditional” rate regulation, all power plant expenditures must be approved by state regulators, and electricity customers are charged rates sufficient to recover those costs plus a reasonable investment return. However, many other factors can affect plant-specific costs, revenues, and operating profits. The recent U.S. nuclear power plant retirements and announced future shutdowns have drawn substantial congressional attention, including proposed legislation, committee hearings and markups, and enacted authorizations and appropriations. For example, the Senate Energy and Natural Resources Committee held a hearing on nuclear energy March 25, 2021, at which concerns about nuclear plant shutdowns were raised.