The recent Illinois lobbying corruption scandal involving Exelon Corporation, its subsidiary Commonwealth Edison and Democratic House Speaker Michael Madigan demonstrate the extent to which nuclear “power” is about more than electrons. While the FBI arrests of the Ohio House Speaker and 5 others in a $60 million bribery/corruption scheme, the $10 billion Exelon nuclear bailout in New York, the questionable circumstances surrounding Exelon’s 2016 PepCo merger, and the South Carolina $9 billion SCANA fraud case suggest that this may be a national pandemic (summarized nicely in this New York Times piece , “When Utility Money Talks,” 8/2/20), the situation in Illinois with Exelon and its subsidiary ComEd has been long standing and particularly egregious.

For decades Exelon’s stranglehold on Illinois energy legislation in cooperation with the currently investigated Speaker Michael Madigan has not only given Illinois more reactors (14) and high-level radioactive waste (>11,000 tons) than any other state. It has severely stifled expansion of renewable energy and energy efficiency, and hampered the Illinois’ energy transformation needed to deal with the worsening climate crisis.

For decades the Illinois environmental community has seen renewables expansion thwarted by the recognition that no significant renewable energy buildout could occur without concessions to either Exelon or ComEd, and Speaker Madigan’s approval. The most recent instance was the 2016 $2.35 billion bailout of three uncompetitive Exelon reactors.

This “nuclear blackmail” politics has forced enviros wanting to pass new legislation to expand renewables into a reluctant and grudging alliance with Exelon – at Exelon’s price of capacity market “reform” that would reward both renewables and ten of Exelon’s operating reactors. If passed in its presently proposed form, this provides yet another nuclear bailout under the disguise of “market-based reform.”

To ratchet up the pressure to enact this nuclear prop-up even more, Exelon CEO Chris Crane in Exelon’s 2Q quarterly earnings call with analysts once again dangles the prospect of closing up to 6 reactors if this market-based-bailout is not granted in 2021.

Under the current ongoing FBI corruption investigation, this reluctant alliance of necessity has turned disastrous, given the political toxicity of any current association with either ComEd or Exelon.

It is just and reasonable that ComEd (and the so-called “bad apples” who “retired” already) should be penalized and prosecuted for their misdeeds, even if they are reportedly “cooperative.” However, a $200 million “settlement” penalty for a $34 billion corporation that for decades has gouged billions from Illinois ratepayers through admittedly corrupt illegal practices is a slap on the wrist.

Further, the $200 million penalty agreement provides no restitution for the decades-long societal damage done via nuclear pay-for-play. Illinois rate payers deserve restitution from these and any predatory, corrupt companies that would engage in such activities. This may require explicit legislation. How can one logically or ethically assert that ill-gotten gains (e.g., the 2016 $2.35 billion nuclear bailout) are still “good for the public” when bribery and corruption were used to get them?

Last Fall, a spokesperson for Illinois Gov. JB Pritzker stated, “The governor’s priority is to work with principled stakeholders on clean energy legislation that is above reproach.” Gov. Pritzker – your moment of truth has arrived.

We urge the Governor and the legislature to begin the restitution process by repealing the $2.3 billion 2016 nuclear bailout. Further, and as others like Crain’s Joe Cahill have suggested, Christopher Crane must step down completely from all functions at Exelon.

The legislature should also enact explicit utility ethics legislation with transparent oversight of utility contracting and philanthropic giving activities to insure that this kind of corrupt behavior is not repeated. And if Chris Crane’s threat of imminent reactor closure is true, then community just-transitions legislation to protect those negatively impacted communities should be a priority of the legislature. As NEIS has maintained and advocated since 2014 – it’s the reactor communities (and equally adversely affected coal mining and power plant communities) that need state support and bailouts when plants are threatened with closure, not profitable private corporations like Exelon.

Finally, we support the FBI’s continued investigation into the activities of Speaker Madigan, associates, and other legislators if necessary to ferret out the remaining political corruption that has abetted this corporate larceny. This is the only way to send a significant and lasting message that nuclear pay-for-play in Illinois is over.

[NOTE: If you are interested in using the above cartoon, please contact NEIS for conditions of use. Thanks in advance.]

 

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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