Uncompetitive IL nukes to recieve $600 million annual subsidy under PJM plan

"Burning money" image by Gene Case, Avenging AngelsAs reported by Scott DiSavino in Reuters, a new "capacity factor" subsidy, at ratepayer expense, is being offered by the Pennsylvania New Jersey Maryland (PJM) grid operator to Exelon Nuclear, to help prop up several uncompetitive atomic reactors in Illinois.

"Capacity factor" refers to nuclear power's 24/7 "baseload" avaiability, but ignores the fact that nuclear power plants can experience years-long safety-related shutdowns.

The article concludes that "extra revenues from the capacity auction could keep the money losing reactors operating for a few more years until possible new carbon standards are available," as Exelon lobbies "federal, state and regional policy makers [to] find ways to compensate generators for the environmental and reliability benefits that non-carbon emitting nuclear plants provide."

Of course, nuclear power is not zero carbon. And, as David Kraft, Director of NEIS, has pointed out, other sources of electricity have inherent upsides, deserving of societal support. Wind power and solar photo-voltaics, for example, as well as energy efficiency, release even less greenhouse gases than nuclear power, and also do not generate forever deadly radioactive waste.

Nor do efficiency and renewables risk catastrophic reactor meltdowns, as Exelon's age-degrading reactors in IL are at ever greater risk of experiencing. Yet, these renewable and efficiency electricity sources are not being awarded benefits, at ratepayer expense, for such society-friendly aspects.

One of those federal policies that could unduly further benefit the nuclear power industry is the Obama industry's Clean Power Plan, to be announced on August 3rd.

Exelon threatens to close three reactors by early next year, absent $1.8 billion IL bailout

NRC file photo of two-reactor Quad Cities nuclear power plant in ILScott Stapf of the Hastings Group's tweet put it well: Nuclear blackmail: Exelon threatens to kill Quad Cities plant if IL lawmakers don't hand over loot.

As reported by Crain's Chicago Business, despite a windfall compliments of regional grid operator PJM (provided at ratepayer expense), Exelon Nuclear is nonetheless still threatening to close its two reactors at Quad Cities, unless the Illinois State Legislature provides it another massive bailout, to the tune of $1.8 billion.

Exelon has also said its downstate single reactor plant, Clinton, could be next to close, early next year, absent the state bailout. A dozen years ago, the Clinton site was a "Nuclear Renaissance" showcase, with a Nuclear Regulatory Commission rubber-stamped "Early Site Permit" for a second new reactor there, a proposal suspended many years ago now.

Nuclear Energy Information Service of Chicago has led the charge in opposition to the state nuclear bailout.

Earlier this week, E&E published an interview with John Rowe in which the former Exelon CEO said that shutting Illinois's uncompetitive atomic reactors is "the proper market-driven answer."

"Prefab Nuclear Plants Prove Just as Expensive"

"Burning money" graphic by Gene Case, Avenging AngelsRebecca Smith has reported in the Wall Street Journal that the "[m]odular method has run into costly delays and concerns about who will bear the brunt of the expense."

Joseph "Buzz" Miller, Georgia Power's executive vice president for nuclear development, is quoted as saying "The promise of modular construction has yet to be seen."

The two proposed new Toshiba-Westinghouse AP1000 reactors, Vogtle Units 3 & 4, that Georgia Power is building are years behind schedule, and billions of dollars over budget. $8.3 billion in federal nuclear loan guarantees, awarded by the Obama administration at no cost to the nuclear utilities, would leave taxpayers holding the bag if the project defaults on its loan repayment.

That's 15 times the amount of taxpayer money at risk than was lost to the U.S. Treasury with the Solyndra solar loan guarantee default several years ago.

The article also reports: "Stephen Byrne, president of South Carolina Electric & Gas [SCE&G], recently told investors his company is in discussions with Westinghouse and CB&I [Chicago Bridge & Iron] about the cost overruns and who will bear the burden. Utilities want those added costs to be shared, getting vendors to pay for some of the added expense but vendors are examining the claims. 'We feel that there’s an opportunity for a settlement in the future,' he said."

The two AP1000s under construction at Summer nuclear power plant in SC have been financed by repeated "Construction Work in Progress" (CWIP) surcharges on ratepayer electricity bills over the past many years. Such a "nuclear tax" is illegal in most states.

These cost overruns and schedule delays were to be expected, based on the previous history of nuclear power in the U.S. and overseas.

In 1985, Forbes wrote "The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale."

In fact, ironically enough, Vogtle Units 1 & 2 were the poster children for cost overruns, coming in at 1,300% their originally estimated price tag.

And the Watts Bar Units 1 & 2 are the case studies in atomic reactor schedule delays. Watts Bar took from 1973 to 1996 to become operational. Watts Bar 2 began construction in 1972, and is still struggling to begin generating electricity, 23 years later!

Such problems extend overseas, as well. A decade-long delay, and huge cost overruns, at the Olkiluoto new reactor construction site in Finland have led to major lawsuits between the nuclear utility, TVO, and the bankrupt French reactor vendor, Areva, to determine who is liable.

Cleveland Plain Dealer editorializes against Davis-Besse bailout

The Cleveland Plain Dealer has published an editorial, "PUCO should reject FirstEnergy rate request."

And Beyond Nuclear is heading back to Columbus, Ohio, to resist FirstEnergy's attempted ratepayer robbery, to the tune of $3 billion, to prop up its dirty, dangerous, and uncompetitive Davis-Besse atomic reactor, and Sammis coal burner. See posting above, regarding this August 8th event.

Update on July 22, 2015 by admin

Beyond Nuclear's Radioactive Waste Watchdog, Kevin Kamps, got a letter to the editor published, supporting the Cleveland Plain Dealer's opposition to the bailout.

FirstEnergy AND the Akron Beacon Journal caught in a "compromising position" re: the $3 billion coal and nuclear bailout

On July 10, 2015, the Akron Beacon Journal ran the unfortunately titled editorial "A compromising position for FirstEnergy and Ohio." Through some acrobatics, the editorial came out in favor of Ohio ratepayers proping up FirstEnergy's dirty, dangerous, and expensive Davis-Besse atomic reactor, and its Sammis coal burner, to the tune of a $3 billion surcharge.

Perhaps this odd conclusion should not have come as a surpirse, as FirstEnergy is headquartered in Akron. As Upton Sinclair famously wrote: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Salary, ad revenues, or other financial favors.

The Hastings Group immediately responded to the editorial with a Tweet, blasting it as "hometown cheerleading."

Beyond Nuclear responded with a letter to the editor, but the paper never ran it nor even acknowledged receipt. So we post our LTE below:

Is your provocative title a tongue-in-cheek finger wag at the “cheeky request” of FirstEnergy? The Ohio Consumers’ Counsel has estimated the proposed bailout could amount to a $3 billion surcharge on Ohioans’ electricity bills, to prop up the dirty, dangerous, and uncompetitive Sammis coal burner and Davis-Besse atomic reactor.

Or is it a Freudian slip, what with FirstEnergy caught in the act, red-handed, attempting to screw ratepayers, yet again?

You wrote “No surprise that environmental groups and consumer advocates have voiced loud opposition to the FirstEnergy request.” Well, it’s also no surprise that your editorial engaged in “hometown cheerleading,” as the Hastings Group tweeted, on behalf of FirstEnergy’s bailout request, as the company is headquartered in Akron. 

I took part in the PUCO’s Akron public hearing last January. It was heartbreaking to hear more than one young person testify that even higher electricity bills could spell homelessness for them. It was good to see an AARP representative speak out on behalf of seniors, who might not live long enough to see any return on their involuntary investment in FirstEnergy’s coveted multi-billion dollar bailout, intended “to ensure the profitable operation of two power plants during the next 15 years.”

What is most ironic is that FirstEnergy lobbied for competitive electricity marketplace rules a decade or moreago. It had hoped to boost profits, by freeing itself from the guaranteed returns of regulated monopoly status. Instead, it now cannot compete, so is seeking to gouge ratepayers.

Did the Brattle Group, commissioned by the nuclear industry-funded Nuclear Matters PR front group, look at the economic losses to Ohio stemming from FirstEnergy’s successful sabotage of energy efficiency, and renewable sources such as solar photovoltaics and wind power?

How many jobs will be lost, as Ohioans subsidize uncompetitive coal and nuclear plants, and businesses seek greener pastures, where the electric rates aren’t so unnecessarily exorbitant?

Won’t the decommissioning of Davis-Besse, the clean up of radioactive contamination on the Great Lakes shore, and the safeguarding of more than 660 tons of high-level radioactive waste stored on-site, mean many hundreds or even thousands of jobs, for decades to come?

The $3 billion bailout would just about replace Davis-Besse’s severely cracked, and worsening, concrete containment shell. Only FirstEnergy has no plan to make that vital safety repair, nor does the Nuclear Regulatory Commission require it. Thus will communities downwind and downstream live in peril of a catastrophic radioactivity release from the age-degraded atomic reactor that has already had more close calls than any other in the country.

You also touted “A coal-burning Sammis plant, equipped with the best-available pollution controls, arguably has a place then.” But FirstEnergy has no plans to install Carbon Capture and Storage at Sammis, for that too would cost many hundreds of millions of dollars.

As the annual World Nuclear Industry Status Report has just affirmed, yet again, central station thermal-electric power plants, most especially aged atomic reactors, due to cost and risk (and of course coal burners, due to climate chaos) are on the way out. Renewables and efficiency are the future – if we are to have one. FirstEnergy’s bailout request to PUCO may have seemed to make sense in the 1950s, but it sure doesn’t any more.

Sincerely,

Kevin Kamps, Beyond Nuclear

Beyond Nuclear has intervened against the Davis-Besse 2017-2037 license extension for the past four and a half years.