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EDITORIAL: Time To End The Utility Bailout Nonsense

 

When he was 11, my stepson taught me one of the most valuable Life-lessons I’ve learned when he said, “You know Dave, man isn’t a “rational” animal.  He’s a “rationalizing” one!”

Truer words have never been spoken when examining the nonsense rationalizations being paraded around by execs of unprofitable electric utilities and their governmental handmaidens for bailing out unprofitable nuclear and coal plants that the market-based system utility lobbyists introduced years ago would otherwise see closed.

A “rationalization” is usually a specious excuse or explanation offered to cover up a serious flaw or failure.  In some cases – like state-mandated nuclear and coal plant bailouts — a legalized fig-leaf, if you will.

Virtually every bailout rationalization offered to date by the Exelons and Dynegys, Trumps and Perrys of the world fall flat on their face when analyzed in detail by the majority of professional agencies and staffs employed to make the crucial, day-to-day decisions that keep the electric grid functioning.  National security, grid resilience, onsite fuel reserves – all such claims have been handily debunked by the experts, historical evidence, or both.

Now Exelon informs the world that its Dresden and Byron reactors are now in “financial distress.”  How sad.  So are Illinois ratepayers after the last $2.4 billion bailout Governor Rauner and Speaker Michael Madigan awarded them in 2016.

Exelon claims “… the company will not at any point seek subsidies from Illinois ratepayers to keep Dresden and Byron open…”.  But that’s what Exelon management said in 2014 about the then five reactors they said were in “financial distress,” too.  This time, they instead are relying on the twisted illogic trying to pass as public policy they hope will come from a Trump Administration Soviet-style protectionist mandate; or twisty balloon-dog machinations they hope regional system operator PJM will invent to facilitate the next wealth transfer from ratepayers to shareholders.

In 2014 our organization brought two propositions to the bailout negotiations that went ignored, and are being ignored today:  1.) nowhere in the State Constitution is the Legislature obligated to guarantee the profitability of a private corporation; and 2.) it is the communities whose jobs and economies are threatened by reactor and coal plant closures that need the bailing out, not profitable private corporations.

We recommended institution of a “just transitions” negotiation among affected parties as an alternative to repeated nuclear hostage crises, to create an economic transition plan for closures before they become imminent crises.  We provided testimony to this effect to both the Senate and House energy committees; and spoke with over 40 state elected and appointed officials prior to the bailout.  We again proposed this concept in a State Journal Register op-ed published in December 2016 after Governor Rauner signed Exelon’s bailout into law.

It is long past time to institute this pro-active approach to protecting affected communities and ratepayers.  Economic blackmail is a poor way to conduct energy policy; and legalized extortion no valid substitute for real market-based solutions.

The utility bailout mania triggered by Exelon has swept the nation like some form of energy-HIV.  Empty, fig-leaf rationalizations created to provide some pretense of legality makes a mockery of the agencies and regulations already in place which seem to be doing the grid reliability job quite well, thank you.

Harsh economic realities will soon begin to force legislatures and Congress to embrace one obvious conclusion:  you cannot create an energy future by bailing out the past.

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