By Scott DiSavino
(Reuters) - Democratic Pennsylvania Governor Tom Wolf asked Republican lawmakers on Tuesday to authorize the state to join the Regional Greenhouse Gas Initiative (RGGI) as part of a nuclear bailout deal, according to reports from local media and analysts.
Officials at the governor's office were not immediately available for comment.
RGGI is a market-based program to reduce greenhouse gas emissions in several Northeastern U.S. states.
Joining RGGI would create additional costs for several power companies that operate coal plants in Pennsylvania, like FirstEnergy (NYSE:FE) Corp's bankrupt FirstEnergy Solutions unit.
FirstEnergy Solutions said it could shut its 2,490-megawatt (MW) Bruce Mansfield coal plant and the 1,808-MW Beaver Valley nuclear plant in Pennsylvania in 2021 unless the state or federal government finds a way to provide more money for the facilities.
One megawatt can power about 1,000 U.S. homes.
In recent years, electricity prices have been depressed by cheap natural gas from shale fields, including the Marcellus in Pennsylvania, and increased use of renewable power. This has made some nuclear and coal plants uneconomical, and forced generators to shut several units over the past five years.
FirstEnergy Solutions said it has not seen the details of Governor Wolf's RGGI proposal but said it "applauds (the governor) for continuing the conversation about carbon free energy generation ... (and) looks forward to remaining part of the discussion and greenhouse gas reduction solution."
Legislators in Pennsylvania have been working on a plan to subsidize the state's nine nuclear reactors to keep them from retiring because they provide thousands of jobs and produce most of the state's carbon-free electricity.
That plan, however, did not come soon enough for Exelon (NYSE:EXC) Corp's Three Mile Island plant, the site of the worst nuclear accident in U.S. history in 1979. Exelon said in May it would shut the one reactor operating there on Sept. 30.
The state's other reactors are operated by Exelon at Limerick and Peach Bottom and privately held Talen Energy at Susquehanna.
Analysts at Height Capital Markets in Washington said they expect Pennsylvania legislators will resume negotiations on a nuclear bailout in the autumn and noted Wolf's comments appear to be an early public nod to negotiations occurring behind the scenes.
Height Capital Markets said momentum to join RGGI is gaining in Pennsylvania but noted it was unclear at this point whether Republicans would be willing to authorize joining RGGI in exchange for nuclear subsidies.