"Aging and Expensive, Reactors Face Mothballs"

The Kewaunee atomic reactor on Wisconsin's Lake Michigan shorelineThe New York Times has reported on the economics that have not only led to the Kewaunee atomic reactor's (photo, left) announced closure in Wisconsin, but also other pressures and forces on reactors, from Entergy's Indian Point near New York City to Vermont Yankee, Duke's Crystal River in Florida, Exelon's Oyster Creek in New Jersey, and Southern California Edison's San Onofre. The article speaks of "[t]he industry’s renewed glimpse of its mortality" and states "the nuclear industry may be nearing its first round of retirements since the mid-1990s."  Kewaunee's closure will be the first at an American atomic reactor since several (Yankee Rowe, Massachusetts; Zion 1 & 2, Illinois; Big Rock Point, Michigan; Millstone Unit 1, Connecticut) in the mid to late 1990s. 

The article also reports that sometimes the costs of generating atomic energy are more than the revenues generated from the electricity sold:

'Bruce E. Biewald, the chief executive of Synapse Energy Economics, a consulting firm in Cambridge, Mass., compared the nuclear plants to old coal plants now facing big capital expenses. The cost of new pollution control equipment has coal companies “writing off hundreds of millions of dollars right and left,” he said. Much the same is now true for nuclear plants. “An asset that might have been worth a couple of billion dollars is now basically worthless,” he said. And with average costs approximating average revenue, some reactors face higher-than-average costs.

Christopher Crane, the chief executive of Exelon, the nation’s largest nuclear operator, said his company’s reactors sometimes found themselves selling electricity at hours when the market price was negative, driven below zero by a surplus of wind energy late at night during periods of low demand. In other words, they have to pay when they produce power, instead of being paid. And even during hours of higher demand, prices on the open market are low because of the low price of natural gas. The price of natural gas has to recover for his older nuclear plants to avoid being “challenged,” he said.'

This is reminiscent of the findings in the Union of Concerned Scientists report by Doug Koplow, which found that nuclear power subsidies have been so large, it would have been less expensive for the federal government to simply purchase electricity on the open market and give it away for free.

Nearly half of the atomic reactors on Lake Michigan's shores have closed over the past 15 years

NRC's file photo of KewauneeFrom The Washington Post: "Dominion Resources Inc. said Monday that it plans to close and decommission its Kewaunee Power Station in Wisconsin after it was unable to find a buyer for the nuclear power plant".

As nuclear power continues to crumble under the weight of its own disastrous economics, Dominion CEO, Thomas F. Farrell II,  becomes the latest industry CEO to lose confidence in the nuclear business. "This decision was based purely on economics," Farrell said. Dominion also operates the two North Anna, VA reactors, where a proposed third reactor plan looks fragile at best. It also operates Millstone, CT and Surry, VA.

A buyer could not be found, even though the U.S. Nuclear Regulatory Commission (NRC) had already rubberstamped a 20 year license extension at Kewaunee. The costs of repairs to keep Kewaunee operating for 60 years, compared to expected revenues, did not make economic sense to continue operations.

Reuters also reported on this story, stating that more atomic reactors could follow suit, their bad economics forcing their closure:

"Especially vulnerable under this scenario would be small, old single reactor sites.

Other units that could be on the hit list because they fit the profile include Exelon Corp's Oyster Creek in New Jersey, Xcel Energy Inc's Monticello in Minnesota, and Entergy Corp's Palisades in Michigan, Vermont Yankee in Vermont and Pilgrim in Massachusetts."

In 1997, Big Rock Point in Michigan was permanently closed, as were Zion 1 & 2 in Illinois in 1998. Kewaunee's closure in 2013 will be the fifth reactor shut down on Lake Michigan's shores in 15 years. This will leave Point Beach 1 & 2 in WI, Palisades in MI, and Cook 1 & 2 in MI still operating on Lake Michigan's shores. Lake Michigan is a headwaters for the Great Lakes, 20% of the world's surface fresh water, providing drinking water for 40 million people in 8 U.S. states, 2 Canadian provinces, and a large number of Native American First Americans.

Several years ago, Kewaunee had more NRC "yellow findings" (the second highest category of safety violation) than the other (at the time) 102 operating reactors in the entire country. The very same year, Point Beach had more "red findings" (NRC's worst category of safety violation) than the rest of the industry combined. Kewaunee and Point Beach are a mere seven miles apart, the same distance as between Fukushima Daiichi and Daini in Japan. Daiichi and Daini's proximity, as well as their proximity to Tokai nearer Tokyo, led the Japanese federal government to prepare worst case scenario plans to evacuate 30 million people from Tokyo in the event of a "demonic chain reaction" of reactor melt downs and radioactive waste storage pool fires.

An NRC daily event report revealed that Dominion's announcement to decommission Kewaunee caused a security incident, as reporters descended on the reactor to cover the story.

The New York Times and Greenwire have also reported on this story, as has World Nuclear News.

Update on October 24, 2012 by admin

A number of Wisconsin news media outlets have reported on this story: the Fond du Lac Reporter; a number of stories by Fox 11, including one about local residents' safety, environmental, public health, and security concernsabout decommissioning, dismantlement releasing radioactivity, and high-level radioactive waste storage for decades along the Lake Michigan shoreline; the Green Bay Press Gazette; Wisconsin Radio Network; and the Milwaukee Journal Sentinel, which quoted a Dominion Nuclear spokesman admitting that maintaining safe operations at Kewaunee was cost prohibitive at the age-degraded reactor:

"Owning more plants in one area would [have] allowed one company 'to leverage the megawatts and the shared staff,' said Richard Zuercher, a Dominion spokesman.

'We looked at all alternatives to keep the unit operating, but we could not make the reductions in the cost without it affecting safety,' Zuercher said." (emphasis added)

Debunking false claims of electric rate increases if Indian Point Units 2 & 3 are shutdown

Marilyn Elie of Cortlandt, New York, a co-founder of Westchester Citizens Awareness Network and one of the original members of the Indian Point Safe Energy Coalition, has been involved in following events at Indian Point for the last 18 years. She recently wrote an op-ed at LowHud.com debunking misleading claims by the right-wing Manhattan Institute that shutting down Entergy Nuclear's Indian Point Units 2 & 3 atomic reactors would result in significant increases in regional consumers' electricity bills.

Marilyn concludes her op-ed:

"The NYISO [New York Independent System Operator] report is clear: even with this high-usage prediction, only 750 MW of replacement power would be needed by 2016 should both plants close. And, as both the NYISO and Manhattan Institute reports acknowledge, this amount of electricity does not have to come from new generation. It can come from improvements in transmission, demand response where large users enter into a contract with Con Ed to cut back usage at certain peak times in exchange for a lower rate, or it could be made up by changes in rules and regulations."

As reported by LoHud.com, Phillip Musegaas of Riverkeeper also responded to the Manhattan Institute report, saying that the Manhattan Institute author, Jonathon Lesser:

"...'cherry-picked' the facts. The report doesn’t consider new generating or transmission projects that are planned and glosses over the benefits of conservation, he said."

" 'This report actually recycles the same tired argument about the impacts of closing Indian Point that have been made repeatedly in the last few years and ignores recent developments that demonstrate Indian Point’s power can be replaced on time and affordably,' Musegaas said."

Former New York City Mayor Rudy Giuliani, a paid spokesman for the nuclear power industry, joined the Manhattan Institute author to praise Indian Point and call for its license extension. New York's Governor, Andrew Cuomo, however, has long called for Indian Point's permanent shutdown.

U.S. House Energy and Commerce Chair Upton attempts flipflop on nuclear subsidies

U.S. Representative Fred Upton (R-MI)A number of news reporters have noted the significance of U.S. Representative Fred Upton (Republican from Michigan's 6th congressional district, Chairman of the U.S. House Energy and Commerce Committee, pictured left) stating at an October 8th congressional debate at Western Michigan University in Kalamazoo that federal energy subsidies should be eliminated. It is most ironic, for Upton led efforts in the U.S. House to approve $20.5 billion in new nuclear power subsidies in late 2007, a measure then signed into law by George W. Bush on December 23rd, when almost all unsuspecting Americans were focused on holiday celebrations.

Specifically, those subsidies took the form of federal nuclear loan guarantees, making federal taxpayers the co-signers on loans for new nuclear projects. $18.5 billion was designated for new atomic reactors, while $2 billion was designated for new uranium enrichment facilities. Another $2 billion was later added for new uranium enrichment, from a "slush fund" of energy loan guarantees administered by the U.S. Department of Energy.

In Feb., 2010, President Obama himself announced the awarding of $8.3 billion in nuclear loan guarantees for two proposed new Toshiba-Westinghouse AP1000 reactors targeted at Vogtle, Georgia. No other new nuclear loan guarantees have yet been awarded. But, in the aftermath of the Solyndra solar loan guarantee scandal, the Vogtle nuclear loan guarantee has yet to finalized. Apparently, Southern Nuclear is unwilling to pony up a mere tens of millions of dollars of its own (or other private investors') money required by Obama's Office of Management and Budget as "skin in the game." Thus, none of the $22.5 billion in new nuclear loan guarantees approved five years ago has actually been disseminated.

The Kalamazoo Gazette reported:

"...The candidates also disagree on what role the government should have in the energy industry. During Monday’s debate, Upton said he supports removing subsidies for all energy companies, including those that produce oil and gas.

'Let's talk about taking those subsidies away,' Upton said. 'Let the real cost of it be out there and let them compete on an even playing field.'..."

A Jackson Citizen Patriot columnist commented:

"...Rep. Fred Upton, R. Kalamazoo, said he 'supports removing subsidies from all energy companies.' If so, he should start with the nuclear power in his district. The federal government subsidizes the nuclear industry more than any other. The Union of Concerned Scientists calculates that it would be cheaper for the federal government to purchase electricity and give it away than to subsidize nuclear power!"

Beyond Nuclear has published a number of exposés on Congressman Upton over the years, including a two page summary, a full 22 page long report, as well as details of the nuclear power industry related Political Action Committee and individual campaign contributions he has recieved in return for his extreme pro-nuclear advocacy on Capitol Hill.

Vogtle 1 & 2 cost nearly 30 times their original estimate!

NRC file photo of Vogtle Units 1 & 2Bobbie Paul of Women's Action for New Directions told the Inter Press Service that "the existing reactors at Vogtle cost 8.9 billion dollars for two reactors, when it was originally promised to be 600 million dollars for four reactors."

A price tag of $4.45 billion per reactor is 29.7 times more than the initial cost estimate of $150 million apiece.

In this sense, the Vogtle nuclear power plant (photo, left) can be considered the poster child for atomic cost overruns in the past generation of construction. How ironic, then, that President Obama and Energy Secretary Chu chose Vogtle 3 & 4 as the first recipient for a conditional nuclear loan guarantee putting $8.3 billion of federal taxpayer funding at risk!