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.

Sources:

 

Who would have thought that the Nuclear Age would end, not with a bang (mercifully) or a whimper, but with the sucking sound of $9 billion being legally siphoned out of the wallets of South Carolinaratepayers with the announced closure of the VC Summer nuclear plant project? [1] A little further south in Georgia, estimates to complete the overbudget and 4-year late Vogtle nuclear reactor project have soared from the 2007 Georgia Power company estimateof $14 billion to a whopping $29 billion [2] Ratepayers are on the hook in advance for those construction costs too, whether the plant gets finished or not.

The ratepayers in Florida got off easy:  They only have to pay $1+ billion for the canceled Duke Power Levy reactors which will never give them any electricity.  The final cost estimate for these unneeded and uneconomic reactors exceeded $25 billion. [3]

And through all this the company slated to build many of these reactors – Westinghouse – went bankrupt, bringing down its parent company – Japanese giant Toshiba – in the process.  Apparently its state-of-the art AP1000 reactor design was a bit more complicated and expensive to build than expected.

Why relate these economic horror stories?  Because in spite of them, well-intentioned (or not) public officials are still going around the country advocating for the construction of new nuclear power plants and the bailout of old ones at a time when cheap natural gas and growing-ever-cheaper renewables are leading the way to a global energy transformation – a transformation which renders continued use of nuclear power as anachronistic as advocating for clipper ships and Conestoga wagons.

That humans are not rational creatures, but rather “rationalizing” ones is continuously validated by the excuses given by nuclear cheerleaders to continue the nuclear boondoggle.  Take for example those offered recently in an editorial [4] by Illinois Congressman Adam Kinzinger (R.-IL16; who also happens to have 8 operating reactors in district, and has received $87,982 in campaign contributions from Exelon Corporation since 2010). Nuclear:

  • “provide(s) …energy…without carbon emissions.” RESPONSE: so do wind and solar, and without producing nuclear wastes or threat of catastrophic accidents.
  • “provid(es) thousands of good paying jobs, and millions of dollars in property taxes…” RESPONSE: the Illinois renewable energy and efficiency sectors combined provide nearly 4-1/2 times as many direct jobs as do nuclear plants.  Those industries pay taxes, too.
  • “supplies close to 20% of [U.S.] electricity…” RESPONSE: according to the Energy Information Agency, renewables have produced more electricity than nuclear since the beginning of 2017; and are growing in capacity, while nuclear capacity is shrinking.
  • “reactors… are suffering economically because of…subsidies to wind power.” RESPONSE: A 2012 study done by the Union of Concerned Scientists identified over 30 forms of subsidy or economic advantage granted to nuclear power.  If we’re going to discontinue subsidizing energy sources and enhance true competition, let’s get rid of all of the subsidies for all of the energy sources .

Wisely, the Congressman did not refer to nuclear power as “clean,” as so many other nuclear cheerleaders glibly do.  Perhaps he realizes that an energy resource that has generated over 75,000 tons of high-level radioactive wastes – some of the most deadly substances ever produced by humankind – with no place to dispose of them responsibly is not really so “clean” after all.  Over $30 billion have been collected for HLRW disposal, and not a single gram has been disposed of yet.  The tens-of-millions of cubic feet of low-level radioactive wastes should also be kept in mind – and out of the environment.

How is it that such nuclear economic follies are allowed to persist?  Robert Trigaux, the business writer for the Tampa Bay Times commenting on the V.C. Summer fiasco sums it up [3] succinctly:

“Billions upon billions spent for essentially nothing. [fill in your state] ratepayers likely to get stiffed for the flood of red ink. Regulators failing to be tough overseers. Captive state legislators too eager to bow to rich power companies…

 “None of these projects would have seen the light of day if state laws had not been enacted to shift the financial risk of grotesquely expensive nuclear plants from power company shareholders and dumped it all on hapless ratepayers.”

Given the $2.4 billion nuclear bailout that the Illinois Legislature and Governor Rauner recently lavished on Exelon Corporation to prop up 4 money-losing Illinois reactors, it seems like Trigaux’s message could have been written for Illinois, too.  Worse, Steve Cicala, an assistant professor at the University of Chicago Harris School of Public Policy, predicts, “They’ll find themselves in the same situation all over again once the subsidies have expired.” [5]

To paraphrase former Nuclear Regulatory Commissioner Peter Bradford, just like we don’t fight world hunger with caviar, no matter how nutritious fish eggs might be, we won’t be meeting our future energy needs using exotic and over-expensive sources like nuclear power.  The Nuclear Age is over; the Age of Decommissioning is beginning.

In short, the fate of nuclear power has been decided; it’s now truly “blowin’ in the wind.”

Sources:
[1]  “Billions lost in nuclear power projects, with more bills due,” Associated Press, Aug. 5, 2017.

http://www.nydailynews.com/newswires/news/business/billions-lost-nuclear-power-projects-bills-due-article-1.3387296

 [2]  “Group says Georgia nuclear plant costs rise to $29 billion,” by Tom Hals, Reuters

Business News, June 15, 2017.

http://www.reuters.com/article/us-toshiba-accounting-westinghouse-bankr-idUSKBN1962YH

[3]  “Blind to runaway costs, nuclear power industry abandons another nuke plant,” Robert Trigaux, Tampa Bay Times Business Columnist, 08/02/17.

http://www.tampabay.com/news/business/energy/trigaux-blind-to-runaway-costs-nuclear-power-industry-abandons-another/2332308

[4]  “Kinzinger: Why nuclear energy is the future in Illinois and globally, “ U.S. Rep. Adam Kinzinger, Chicago Sun-Times,  Aug. 5, 2017.

http://chicago.suntimes.com/columnists/kinzinger-why-nuclear-energy-is-the-future-in-illinois-and-globally/

[5]   “U of Chicago professor: IL Zero Emissions Credit Exelon bailout ‘short-sighted,’ despite challenge dismissal,”  by Kacie Whaley,  Cook County Record,   Aug. 7, 2017.

http://midwestenergynews.us7.list-manage.com/track/click?u=ae5d3a0c6088cad29d71bf0d0&id=45842b4e1a&e=7b9bd73e8c