Nuclear bailout

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

Last May, Illinois legislators, responding to Exelon’s warning that it may have to close its nuclear plants in Byron, Quad Cities and Clinton as they were unprofitable, ordered the relevant four state agencies to propose “market-based solutions” that would keep the plants open. Such measures could include a carbon tax, a carbon tax-and-trade program, or remuneration for the carbon-free energy produced at nuclear power plants. Exelon also points to the reliability of nuclear power plant production.

Of course, the areas in which the plants are located would be adversely affected by the loss of jobs and the taxes that support community services such as schools, parks and businesses. Local officials were quick to express their concerns to state officials.

Exelon expects to make the decision regarding plant closings this coming May, awaiting any new laws. The decision will occur before the federally mandated state plans for reducing carbon emissions from electrical production. The plans, due in 2016, could incorporate solutions that recognize the benefits of carbon reductions from operating nuclear power plants.

The earnings of Exelon’s nuclear fleet have fallen as a result of a drop in electrical demand, increased output from wind farms and the low cost of natural gas caused by the dramatic increase in natural gas supplies from the upsurge in fracking of gas deposits. Although an increase in the price of natural gas is likely based on historic price trends, Exelon officials believe gas prices will not rise quickly enough to prevent the closing of the nuclear plants.

Last year, four nuclear power plants closed in the United States because they were either no longer profitable or needed costly repairs. Another Exelon nuclear plant in New York is losing money; the company estimates the plant would need an 83 percent increase in wholesale rates to become profitable, according to an article in Bloomberg.

A lengthy article by Keri Lydersen provides an overview of the recently released report from the agencies that was ordered by state legislators last May. While it sheds light on whether the state should intervene to help Exelon, it fails to provide clear conclusions. She indicates the findings “generally support the idea that Illinois could weather nuclear plant closures, and such shutdowns could even bolster clean energy generation and jobs.”

In a recent Crain’s article, former member of the U.S. Nuclear Regulatory Commission Peter Bradford expressed alarm at Exelon’s request for a $580 million per year rate increase to keep its plants running. Bradford estimates the rate increase could raise the average customer’s annual bill several hundred dollars. He believes that subsidizing nuclear power plants instead of taxing carbon could result in paying too much for too little climate improvement. Yet, he warns that closing many nuclear plants abruptly is not in the climate’s best interest.

Implied in Bradford’s perspective is the need to design a state energy strategy for a cost-effective transition out of fossil fuels and our aging nuclear power plants. For such a transition to be sustainable, it would include cost-effective renewable sources.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the Jan. 14-20, 2015, issue

10 thoughts on “Nuclear bailout

  • January 14, 2015 at 10:04 am
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    This article is a complete joke lol. Cherry picking information at its best. Renewables cannot replace baseload power. Renewable advocates are scared the playing field won’t be tipped in their favor anymore so they have to tag the exelon move as a “bailout” which is anything but. They are just trying to level the playing field.

  • January 14, 2015 at 11:24 am
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    Mr. Doe’s response is reminiscent of a belly up to the bar response. If this information is cherry-picked, the forum is open to his rebuttal. We await.

  • January 14, 2015 at 7:15 pm
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    Yes, nuclear energy in Illinois should be replaced with Renewable Energy.

    Renewable Energy plants can be built far less expensively, far quicker and are far cleaner, safer and more reliant than nuclear energy.

    Renewable Energy sources also release the least amount of CO2 than any energy source.

    Also, just scroll thru the headlines on http://www.enenews.com to learn what happens when nuclear energy goes wrong.

  • January 14, 2015 at 7:37 pm
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    Why don’t you try offering a rebuttal Paul Smith.

  • January 15, 2015 at 10:21 pm
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    Less expensive? Is that why AWEA is crying because the PTC credit didn’t get renewed for this year? Wind has to soak taxpayers for federal subsidies and have state mandates to compete. Doesn’t sound less expensive to me. More reliant? Nuclear is the most reliable power generation there is hands down. There has not been a single death related to nuclear power in this country ever! Maybe you should stop fear mongering and explain to me how wind turbines kill hundreds of thousands of birds a year is “environmentally friendly”?!

  • January 15, 2015 at 10:37 pm
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    Warren buffets comment on building wind farms- “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffett told an audience in Omaha, Nebraska. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

  • January 16, 2015 at 12:15 am
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    John Doe,

    The article is not a complete joke.
    Fact: Legislators did pass legislation in response to requests from Excelon.
    Fact: The new legislation is designed to keep the nuclear power plants open if possible.
    Fact: Excelon did request a big rate increase.
    Need I go on?

    i consider the article well-balanced.

    That said, I would like to see more information on how renewable energy sources can supply our energy as consistently and reliably as nuclear power plants. Not saying it can’t be done, I just have not seen the plans.

    Thank you for reading The Rock River Times.

    Sincerely.

    Paul “Meet John Doe” Gorski

  • January 16, 2015 at 12:45 pm
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    Exelon has NOT requested any type of rate increase from the legislature that is being misreported, what they have requested is that they be included in state programs that already recognize other forms of zero carbon energy sources, wind, hydro, coal with carbon sequestration. Nuclear is the only power source not recognized and ironically is the the most efficient and reliable. They want to level the playing field, if wind farms are truly that cheap they shouldn’t have anything to worry about.

  • January 19, 2015 at 11:00 am
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    John Doe,

    Exelon requested a rate increase in 2008 and in 2010. Rates were scheduled to go up significantly in 2014 and 2015 due to a rate auction held in 2011. And now because of expected increases in energy costs in 2017-2018, Exelon will either get taxpayer assistance or a rate increase. Looks like a pretty regular history of requesting rate increases.

    Thank you.

    Paul Gorski

  • January 19, 2015 at 3:00 pm
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    Paul,
    The auction you are talking about is PJMs capacity auction that is held every May for three years out. It is very misleading that you say “exelon” is requesting a rate increase when in fact the auction itself will determine the actual price for capacity based off of supply and demand. You don’t go to a capacity auction and request a ” rate increase,” it simply doesn’t work that way. Either you know this and want to mislead other readers or two don’t know what you are talking about.

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