Exelon's Byron Generating Station in northern Illinois. (Photo by Michael Kappel via Creative Commons)

Exelon's Byron Generating Station in northern Illinois. (Photo by Michael Kappel via Creative Commons)

Illinois resolution would help Exelon nuclear plants

©2014 E&E Publishing, LLC
Republished with permission

by Jeffrey Tomich

Illinois House leaders Friday filed a resolution urging federal and state agencies to adopt policies and rules that would enhance the competitiveness of Exelon Corp.’s nuclear fleet in the name of preserving thousands of Illinois jobs and millions of dollars in taxes paid annually to the state.

The resolution, scheduled for a hearing before the House Environment Committee today, is the latest signal that the financial health of Exelon’s six nuclear plants in its home state is going to loom large as state agencies craft a plan to meet carbon standards for existing power plants to be issued by U.S. EPA in a week.

“It’s increasingly likely that the Legislature is going to deal with this issue,” said David Kolata, executive director of the Citizens Utility Board, a Chicago-based consumer advocacy group.

“What we would like to see here is a comprehensive discussion of the least-cost way to meet the carbon rules,” he said. “What we wouldn’t want to see is a bailout that sticks consumers with all the risks of markets.”

Exelon officials have been emphatic in presentations to elected officials, industry groups and Wall Street in recent months that the company’s 11 nuclear plants — six of which are in the company’s home state — should get more credit for the role they play in providing reliable, carbon-free electricity.

The resolution, H.R. 1146, filed Friday by House Speaker Michael Madigan, raises many of the same points. Also signing on as chief co-sponsors of the measure are House Republican Leader Jim Durkin and Democratic Reps. Sue Scherer and Mike Smiddy.

Smiddy’s district includes Exelon’s Quad Cities Generating Station. Scherer’s district includes the city of Decatur, just south of the company’s Clinton Power Station.

The Clinton and Quad Cities nuclear plants are two of three Illinois plants identified by Exelon executives and lobbyists as those that may face possible closure if their financial performance doesn’t improve.

Christopher Crane, Exelon’s chief executive, told analysts and investors earlier this year that the company could choose by the end of the year to close nuclear plants if it doesn’t see “a path to sustainable profits” (EnergyWire, Feb. 7).

Crane more recently reiterated that the company wouldn’t ask for any type of state bailout for the plants in Illinois. But he and other Exelon officials have met with Madigan and other key legislative leaders this spring to brief them on the issue.

The meeting led Madigan, the longtime Illinois House speaker, to issue a statement two weeks ago announcing that Exelon had provided assurances it would continue to operate the Quad Cities and Clinton plants for at least the next 12 months.

Exelon has said its nuclear fleet is being hurt by weak wholesale power prices; more specifically, competition from wind- and natural-gas-fired generation. The company said part of the reason is that the plants aren’t rewarded under current markets and policies for their ability to run almost continuously and carbon-free.

Carbon rules’ role

Wherever the discussion goes from here, it will almost certainly be in the context of the Obama administration’s proposed rules for regulating carbon dioxide emissions from existing power plants.

The proposed standards are expected Monday, and EPA officials have promised they will provide states with flexibility to develop their own implementation plans.

The House resolution specifically urges the Illinois Commerce Commission to prepare a report examining the ability of the state and grid operators to enhance transmission of nuclear power to other states, as well as identify the rate impacts of early closure of nuclear plants.

It also recommends that the Illinois EPA prepare a report showing the effect that nuclear closures in Illinois would have on greenhouse gas emissions in the state.

Environmental and renewable energy advocates fear that any measure to help Exelon’s nuclear plants could come at the expense of energy efficiency and wind and solar power.

“Nuclear power is less and less competitive with renewable energy and energy efficiency,” the Illinois Environmental Council said in a blog post yesterday. “When the carbon pollution standards for existing coal plants are introduced by President Obama on June 2, Illinois’ state implementation plan should absolutely prioritize renewable energy and energy efficiency.”

10 thoughts on “Illinois resolution would help Exelon nuclear plants

  1. We at Nuclear Energy Information Service of Illinois are opposing this resolution, and two of our Board members are testifying before the House Environment Committee today in opposition. This Resolution, although not binding, is a prelude to lock in nuclear and coal as the State’s primary energy policy at the expense of renewables. While House Speaker Madigan introduced and promotes HR1146, last week he cut a deal with Exelon in which he agreed to NOT fix the State’s Renewable Energy Portfolio Standard law, in exchange for Exelon not closing its 5 money-losing reactors for the next 12 months (i.e., during election season). As a result money collected for constructing new renewable energy in Illinois will not be released for use. This Resolution is about nothing but raw politics and money. It is also a part of a nationwide campaign on the part of Exelon and other nuclear utilities to gut renewables permanently. A summary Fact Sheet with reasons to oppose HR1146 is available on the NEIS website at: http://neis.org/wp-content/uploads/WHATS-WRONG-WITH-HR-1146.pdf

  2. UPDATE: HR1146 passed out of the Environment “Committee” unanimously. Before the vote, Speaker Michael Madigan, who sponsored the Resolution and who was to testify in its behalf, used his executive privilege as House Speaker to “replace” six members of the Committee temporarily, and replace them with hand-selected alternates. The six who were dismissed were likely to vote or at least speak against HR1146. Government in Illinois — ya gotta love it!

  3. For some reason this looks like an opportunity to take advantage of nuclear as a low carbon generation alternative. For instance, roughly five years ago about 80 percent of my electricity came from nuclear plants in and around Chicago. Now it’s much lower. My guess is that Illinois nuke plants want to sell its electricity at a premium. To areas that are heavily coal generation dependent. For every problem, there’s a line of people wanting to get in on the solution. Carbon emissions standards will spur this on.

    It wasn’t that long ago that Illinois nuke plants were cash cows for ComEd/Exelon. How did the economics change? Those plants have been capitalized for like ever. How could natural gas have cut into O&M so fast?

  4. So, Dave Kraft, you want to trade the most reliable carbon free generation that exists, with the most unreliable generation in wind and solar that exists? I’m not sure what alternate reality you live in, but that makes absolutely no sense. You say “money-losing reactors,” the only reason any of their plants would be losing money would be because they compete in a competitive market that has the rules already favored toward wind and solar. Plus, they have to compete against an industry that receives massive taxpayer subsidies with the PTC and ITC credits. Essentially, wind generators can give their power away at -$35 a megawatt and still make a profit. That’s how generous the taxpayer subsidies are. I’m sure you already know this, but you fail to share these points with the other readers. Doesn’t sound like much of a competitive market now does it? So, instead of whining about Exelon and how they are trying to preserve the only real form of carbon free power generation, you should worry about how renewable power can stand on its own feet without handouts after soaking taxpayers for subsidies for the last twenty four years. I’d also be curious to know where you get your funding…

  5. The market is the market. There are cheaper ways to generate electricity. You don’t change the market to save a generating source that’s too expensive to compete. Only nuclear would have the hubris to say that Illinois owes them a profit whether or not they are profitable.

  6. A small, and temporary financial incentive to keep nuclear plants open is probably the most cost-effective CO2 reduction measure ever to come along. Especially given that they will operate, 24/7, for decades to come.

    In any event, having different non-emitting sources be treated differently is indefensible. Renewable portfolio standards are outrageous policy. If (anti-nuclear) “environmentalists” really think that renewables are cheaper than nuclear, they would have no problem with a policy that gives equal incentive for all non-emitting sources, or mandates (portfolio standards) that apply to all non-emitting sources, as nuclear would lose anyway (under said level playing field). But they strenuously object to any such policy, which is telling…

    If the state’s renewable energy policies end up erecting some wind farms, that occasionally produce power, but also end up causing the closure of nuclear plants (that produce large amounts of non-emitting power all the time), those policies will actually end up causing an increase in pollution CO2 emissions over the long run, in addition to costing money.

  7. Tell us, Mr. Kraft… since you are associated with an “information service”, would you tell us just how well the existing renewable generators in Illinois performed during the polar vortex cold snap last January?

    I read that wind did well along the edges of the affected area, like Texas and Nebraska. I read nothing about it doing so well toward the center. Had Illinois relied on wind for its electricity last January instead of nuclear, I’d bet that millions of people would have been in a world of hurt.

  8. Dr. John Miller wrote:

    You don’t change the market to save a generating source that’s too expensive to compete.

    GREAT! That means repealing all renewable production tax credits, investment tax credits and portfolio standards! I’m SO glad to have you on board.

  9. @Engineer-Poet:
    1.) the straw man you address in your legitimate concern about how renewables fared during the vortex is addressed by moving to a 21st Century grid, and implementing the varieties of utility-scale storage. This doesn’t happen overnight; it must be PLANNED and then BUILT. It’s illogical for faulting something when the necessary pieces have not been put in place to make it work. THAT”S where we need to be putting in our money, not in further subsidizing nukes. Which brings me to…
    2.) many environmental groups and wind companies actually advocated for eliminating the RPTC back in 2005 during the Bush Admin energy legislation fight. Some still do today. We would also support that, PROVIDED the nuclear industry give up its subsidies, such as the Price Anderson Act, which limits their liability for catastrophic accidents (which the industry then argues from the other side of their mouth can’t happen anyway) and then transfers further liability in the 10s to 100s of billions of dollars to the U.S. taxpayers if the cap is exceeded. Or,eliminating the socialization of the cost of perpetually storing high-level radioactive wastes for 6,000+ generations. The federal government never should have subsidized nuclear waste disposal in the first place, and should have required the nuclear industry to be fully responsible for the disposal of THEIR wastes. The industry of course would then have passed these costs on to ratepayers, who would have rightfully rebelled against nuclear. But — that’s not what happened. And the fossil fuel industries received even greater subsidization than the nuclear folks. So don’t get so testy about the chump-change RPTC and feed in tariffs. The energy patient has cancer, and you’re complaining about acne.

  10. I see the blogging software here has the nasty habit of removing paired line-breaks as paragraph breaks, thus running together text blocks meant to be separated by white space.  Here’s hoping that it allows the blockquote tag:

    addressed by moving to a 21st Century grid, and implementing the varieties of utility-scale storage.

    Yes, this “21st century grid” is an enigma. We were promised “local, democratic power in micro-grids”, only now it comes with a “21st-century grid” that apparently has our not-neighbors several states distant powering us when we aren’t powering them. Or something. All that power moving all that distance means a lot more rights-of-way through a lot more people’s back yards, costing a lot of money. Is the price tag for this going to be tacked onto the bill of everyone who connects to the grid, forcing many to try to get off it? Or is it going to be added as a tax on all solar and wind gear, since that is ultimately what drives the need for such a radical expansion of long-distance power transmission?

    You might as well start the expansion by hiring a lot of new faculty at law schools. The legal battles over those lines will last years before you can build a single tower, and we’ll need plenty of new lawyers.

    It’s illogical for faulting something when the necessary pieces have not been put in place to make it work.

    There’s the way you want to do it, and the way I want to do it. My way uses pieces we’ve long known how to build (France built fifty-odd of them in about ten years and replaced essentially all the fossil-burners on its grid). Your way has Never. Been. Done. Not anywhere, not by anyone. Many of your pieces don’t exist at a cost we can afford, and the evidence that they’ll work at you claim is questionable at best.

    THAT”S where we need to be putting in our money, not in further subsidizing nukes.

    The so-called “nuclear subsidies” you complain about always seem to include the DOE’s budget items for weapons and cleanup at WWII/Cold War sites. Those have nothing to do with civilian nuclear reactors, and the blatant dishonesty makes me wonder if there is anything you say that is actually the unvarnished truth.

    We would also support that, PROVIDED the nuclear industry give up its subsidies, such as the Price Anderson Act, which limits their liability for catastrophic accidents

    I’m sure the nuclear industry would LOVE to get rid of Price-Anderson. P-A makes EVERY civilian nuclear plant liable for potential damages at any other. Insurance rates have to cover the prospect of someone, somewhere else, screwing up and incurring liability paid by YOUR plant which had nothing to do with it. That provision has never been invoked (TMI’s total liability was well below the single-plant insurance cap, so the re-insurance wasn’t used), but it would still be good to get rid of it.

    If you simply repeal P-A, nuclear plants would not be required to carry any insurance at all. They could self-insure. What’s the value of a melted reactor? Zero, if not negative. Utilities would set up each plant as its own corporation. Let the neighbors sue after an accident. The owners tell them, “you own it, the cleanup is YOUR problem now.” Owners could insure themselves against the loss of the plant, which is limited to its value.

    If you think that’s unacceptable, that’s roughly the situation that chemical plants have today. The fertilizer plant in West, TX that blew up the town last year probably had next to no insurance and few remaining assets after the blast. Why should nuclear be held to any higher standard? Especially since the liability of anything emitting CO2 is literally world-wide?

    eliminating the socialization of the cost of perpetually storing high-level radioactive wastes for 6,000+ generations.

    Oh, hogwash. The whole freaking world is radioactive. The banana you put on your breakfast cereal contained about 15 Bequerels of Potassium-40, not to mention Carbon-14. You contain about 4000 Bq of the former and plenty of the latter. The oceans contain a couple billion tons of uranium dissolved out of continental rock, and it’s perpetually decaying into polonium, radium and radon as it has since the planet first formed out of the primordial nebula.

    This stuff is no danger to us in natural concentrations, and never was. All we do by using uranium is extract a fair amount more energy than natural decay does, and produce some products that are “hot” for a geological eyeblink. Fission products become less radio-toxic than the original ores in about 500 years. Most transuranics don’t, but why on earth would you throw transuranics away? They make good nuclear fuel, and we NEED carbon-free energy. If trace losses to the environment were dangerous, the UPPU group would not have so many members living to ripe old ages.

    The prospective lifespan of dry-cask containers is in the hundreds of years (there are concrete structures built by ancient Rome which still stand). I think we’d be insane to leave “spent” fuel any longer than it would take to put it into something like Transatomic Power’s reactor, but if you assume humanity will return to savagery and must be safe from the stuff then wrapping it in stainless steel and concrete is almost certainly good enough. If humans of 2200 AD have to re-learn the lessons of the late 19th and early 20th centuries, it would be their own damn fault for losing the hard-won knowledge of their ancestors.

    The federal government never should have subsidized nuclear waste disposal in the first place, and should have required the nuclear industry to be fully responsible for the disposal of THEIR wastes.

    FedGov declared itself the owner of all nuclear fuel, new or spent. FedGov barred private industry from processing spent fuel and recovering useful materials. FedGov created this problem, it is FedGov’s responsibility to fix it.

    don’t get so testy about the chump-change RPTC and feed in tariffs. The energy patient has cancer, and you’re complaining about acne.

    The RPTC is being used to put superior carbon-free electric generators out of business. If carbon is the cancer, wind and solar are carcinogens: they require fast-response backup power to keep the grid operating, which means gas-fired turbines. Only hydro and nuclear can de-carbonize electricity, and given the methane from decomposition of submerged forests I’m not too sure about hydro.