Nuclear Power Bums, Bailouts, and Bankruptcy
You have to hand it to the nuclear industry for socializing costs and privatizing profits. Last year, lobbyists for operators of dirty, deadbeat old reactors won massive public subsidies — bailouts — in New York and Illinois that will keep decrepit, retirement-age reactors from shutting down.
Instead of turning off the rattle traps — and investing public funds in renewables – state-sponsored electric ratepayer handouts in the two states will total $10 billion over 12 years. Remember Reagan’s mythical “welfare queens”? These utilities are welfare gods, propping up decrepit reactors by buying entire state legislatures that in turn legalize monthly electric bill increases.
In New York, the Fitzpatrick reactor (Entergy Corp) and Nine Mile Point station (Exelon Corp) join the Ginna reactor in foisting rate hikes on customers, giveaways that will keep the failed reactors spewing “allowable” radioactive emissions to the air and water indefinitely.
Tim Knauss, reporting for the Syracuse Post-Standard wrote, “The once money-losing nuclear plants are now expected to add millions to the profits of parent company Exelon Corp.” The windfall for the dividend-earning class is considerable. A single large power reactor can draw $1 million in profit every month for the owners and shareholders.
In Illinois, the Clinton and Quad Cities reactors will be saved from the axe by a similar bailout engineered by Exelon Corp last December. Like clockwork, Exelon told it investors in February that “cash flow and profit outlook have improved thanks to the New York nuclear subsidies and a similar program adopted in Illinois,” Knauss reported. Dave Kraft, director of Chicago-based Nuclear Energy Information Service, explained the downside in an email: “Mortgaging our energy future by bailing out the energy past deliberately stifles the real energy and climate solutions we need: more energy efficiency, and aggressive use of renewables. The utilities that rationalize ‘bailout’ have no real concern for either climate change relief or consumers’ pocketbooks — only their own corporate bottom line. Legislators who think otherwise are either naïve and ignorant or bought-and-paid-for — or both.”
It gets worse. According to Prof. Karl Grossman, the nuclear “industry hopes that if New York succeeds, it could pressure other states to adopt similar subsides.” One Reuters headline was: “New York could show the way to rescue US nuclear plants.” Case in point: in Ohio Apr. 26, Sen. John Eklund (R) put up Senate Bill 128 which, if enacted, will add a hefty tax to electric bills and bail out FirstEnergy, saving its otherwise bankrupt Davis-Besse and Perry reactors from closure. Ohio citizens’ groups and others are fighting this corporate welfare. AARP Ohio said the give-away would raise electric bills “almost $60 a year for up to 16 years — a real burden for people on fixed incomes.” The Ohio Manufacturers’ Association, the American Petroleum Institute-Ohio, the Alliance for Energy Choice, and the Electric Power Supply Association all argue that the bill only pads FirstEnergy’s bank account while other states –including Wisconsin, Vermont, Massachusetts, and Nebraska — have opted to let insolvent reactors close for good.
To postpone nuclear power’s inevitable demise, the failed industry needs to take the subsidies nationwide, according to Tim Judson, Director of Nuclear Information and Resource Service (NIRS) in Maryland. Judson warned April 4 that, “The price would be outrageous. If reactor subsidies go nationwide, it could cost $130-$280 billion by 2030.” Bailout legislation for dilapidated reactors is now pending: in Connecticut, for Millstone 2 & 3; in New Jersey, for Salem 1 & 2 and Hope Creek; in Texas, for South Texas 1 & 2 and Comanche Peak 1 & 2; in Maryland, for Calvert Cliffs 1 & 2; and for nine reactors in Pennsylvania including Beaver Valley 1 & 2, Three Mile Island 1, Susquehanna 1 & 2, Limerick 1 & 2, and Peach Bottom 2 & 3.
Buddy Can You Spare a Billion Dollars?
At the other end of current nuclear biz, reactor construction delays and cost overruns have now bankrupted Toshiba’s Westinghouse Electric. Westinghouse, as the New York Times said, is “a once-proud name that, in years past, symbolized … supremacy in nuclear power.” That was then; before David Shipley, writing for Bloomberg, reported that the March 29 “bankruptcy of Westinghouse Electric Co. is yet more evidence, if anyone needed any, that the economics of nuclear power are not good… nuclear energy can’t compete against cheap natural gas and ever-cheaper renewables.”
Toshiba/Westinghouse has lost over $6 billion trying to build four new reactors in the United States, two in Georgia and two in South Carolina, which may now be abandoned. The Vogtle project in Waynesboro, Georgia was first projected to cost $14 billion: no bargain at all considering the plummeting cost of solar, and wind, and the “negawatts” produced by conservation and efficiency. Now three years behind schedule and with Westinghouse buried under a mountain of law suits, one utility expert testified the actual cost will be over $21 billion. “Too cheap to meter” was always too pricey to fathom. On March 30, Toshiba said Westinghouse had total debt of $9.8 billion.
As Judson at NIRS says, “It’s imperative that environmental, consumer, and clean energy advocates get active — both to stop these bailouts from coming to more states and to make sure [Trump] doesn’t rubber-stamp a massive national reactor bailout, like state utility commissions did in the 1990s. … We can’t afford to let that happen again.”