"Exelon CEO: 'We are not asking the state for a bailout'"

David Kraft, Director, Nuclear Energy Information Service (NEIS) of ILThe Chicago Tribune reports that Exelon CEO Chris Crane denies the largest nuclear utility in the U.S. is seeking a bailout from the State of Illinois in order to stabilize its flagging fleet of atomic reactors:

'Crane told the Tribune Wednesday that a legislative fix is not in the offing.

“We are not – are not – asking the state for a bailout,” he said. “We are looking at different ways to contract/ sell energy from those plants into other markets, into other buyers, but there is not a state bailout.”

Crane said the company does not support subsidies for wind and does not support a 500-mile high voltage transmission line project pending approval at the Illinois Commerce Commission that would bring more wind into the state from Iowa.

“We are not considering a legislative fix to subsidize the nuclear plants in the state,” Crane said in an interview. ‘That is not anything we are working on.”'

On Nov. 6, 2013, E&E's reporter at Greenwire reported on Exelon's hypocricy in an article entitled "Nuclear giant taps wind tax credit that it's trying to kill."

As watchdog Dave Kraft (photo, above left), Director of Nuclear Energy Information Service (NEIS) in IL, points out, Exelon's denial of seeking a state bailout comes on the very same day it announced the takeover of Washington, D.C. area electrical utility PEPCO: "This may be the case -- for now. Who would need a bailout when all one has to do is 'buy' a marketful of unwilling sheeple, who would legally be available for fleecing?  And if the merger is not approved (as the Washington DC PUC will have something to say about this, and hasn't been favorable granting this type of merger in the past to even smaller nuclear-reliant utilities), Crane can always come back to Springfield at a later date to try again."

Dave published an analysis on March 3, 2014, "Exelon Nuclear -- Holding Illinois Hostage Yet Again?", as well as a related April 27th fact sheet, NO RATEPAYER BAILOUTS FOR EXELON’S “NUCLEAR HOSTAGE CRISIS."

Public Citizen: "Exelon-Pepco Merger Requires Additional Federal Consumer Protections; Office of Consumer Advocate at FERC Needed"

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

April 30, 2014

Contact: Tyson Slocum (202) 454-5191
Karilyn Gower (202) 588-7779

"Today’s announcement of a debt-laden acquisition of D.C.-based Potomac Electric Power Co (PEPCO) by Chicago-based Exelon raises concerns about shifting risks from Exelon’s massive unregulated wholesale generation portfolio to Pepco’s captive ratepayers. Stronger federal consumer protections are required, including the establishment of an Office of Consumer Advocate at the Federal Energy Regulatory Commission (FERC). In addition, state and federal regulators must examine whether this transaction exposes ratepayers to too much risk.

As one of the largest operators of unregulated power plants in the regional market (PJM), Exelon is exposed to commodity price volatility risk. It appears as though Exelon is embarking on a strategy to mitigate that risk by expanding its control over captive ratepayers through the acquisition of local distributional utilities. The more captive ratepayers a large wholesale generator like Exelon has, the easier it is for it to find a guaranteed market to pass on higher wholesale costs. Therefore, this deal is all about shifting the operational risk away from Exelon’s shareholders and onto Pepco’s household consumers.

Part of Exelon’s wholesale operational risk stems from its nuclear power fleet. Exelon’s aging nuclear plants have been a drag on its profits, so adding more captive ratepayers through this deal will help Exelon shift its nuclear liability away from shareholders and on to ratepayers.

Exelon already controls captive ratepayers through its 2012 acquisition of Baltimore Gas & Electric, its existing captive ratepayers at Commonwealth Edison, and its acquisition of PECO in Pennsylvania.

With this proposed purchase, Exelon is essentially recreating a giant corporation. While Wall Street investors likely will cheer the risk-shifting away from Exelon’s shareholders and on to D.C. ratepayers, our concerns about the adequacy of consumer protections in the wholesale market require the adoption of additional reforms, including the establishment of an office of consumer advocate at FERC." (emphasis added)

[The year 2000 merger between Commonwealth Edison (ComEd) of Illinois and Philadelphia Electric Company (PECO), the largest and second largest nuclear utilities in the U.S., created the mega-nuclear utility Exelon. In 2011, Exelon merged with Constellation, adding Maryland and Upstate New York atomic reactors to its nuclear fleet.]

Radioactive "Moral Hazard": DOE loans, and guarantees, $6.5 billion for two new reactors for a 0%, $0.00 credit subsidy fee!

Aerial image of Plant Vogtle Nuclear Generating Station - photo credit to High Flyer. The photo shows the operating Units 1 and 2, as well as the construction site for proposed new Units 3 and 4.Southern Alliance for Clean Energy reports in a press release entitled "New Documents Confirm Utility Giant Southern Company Gets Sweetheart Deal from Energy Department for Multi-Billion Nuclear Loan Guarantees for Vogtle Reactors":

"As revealed today in an Energy & Environment News story by Hannah Northey, the credit subsidy fee for utility giant Southern Company and its utility partner, Oglethorpe Power, for billions of dollars in taxpayer-backed federal loan guarantees, is nothing, $0. This shocking information was disclosed two months after the Department of Energy (DOE) finalized terms of $6.5 billion worth of loan guarantees that were offered as part of an $8.3 billion package to build two new nuclear reactors at Plant Vogtle in Georgia. A third partner in the project, MEAG, has yet to have their $1.8 billion loan guarantee finalized."

Please register your disapproval of this nuclear sweetheart deal, at taxpayer expense and risk, to President Obama, your two U.S. Senators, and your U.S. Representative! You can be patched through to your Members of Congress via the Capitol Switchboard at (202) 224-3121.

More.

Update on April 25, 2014 by admin

Southern Alliance for Clean Energy (SACE) has posted a blog linking to a CREDO petition initiated by NIRS, calling on U.S. Senators Boxer (D-CA) and Markey (D-MA), strong nuclear power wathdog who, respectively, chair and serve on the Environmental and Public Works Committee, with jurisdiction over nuclear power matters, to request a Government Accountability Office (GAO) investigation into the ZERO credit subsidy fee "no money down" scandal. At the bottom of the CREDO petition site is a link to NIRS' GreenWorld blog post about the Vogtle 3 & 4 sweetheart deal, at taxpayer expense.

The SACE blog also links to a clever and insightful "by the numbers" blog written by Sue Sturgis, Institute for Southern Studies Editorial Director.

RMI: "Nuclear Power's Competitive Landscape and Climate Opportunity Cost"

Amory B. Lovins, Cofounder and Chief Scientist, RMITitiaan Palazzi, Special Aid, RMIAmory B. Lovins, Cofounder and Chief Scientist, and Titiaan Palazzi, Special Aid (photos, left), of the Rocky Mountain Institute in Snowmass, CO, presented "Nuclear Power's Competitive Landscape and Climate Opportunity Cost" at "Three Mile Island 35th Anniversary Symposium: The Past, Present, and Future of Nuclear Energy" held at the Thayer School of Engineering at Dartmouth College in Hanover, NH, on 28 March 2014.

Lovins and Palazzi report that, when compared to nuclear power: (1) Efficiency and renewables are far cheaper; (2) Renewables can deliver similar or better service and reliability; (3) Renewables can scale faster;  and (4) For climate protection, efficiency and renewables are far more effective solutions than new nuclear build, which indeed is counterproductive.

Lovins and Palazzi's economic critique extends not only to proposed new atomic reactors, but even to existing, age-degraded reactors. They state "Reactors are promoted as costly to build but cheap to run. Yet as Daniel Allegretti ably described, many existing, long-paid-for U.S. reactors are now starting to be shut down because just their operating cost can no longer compete with wholesale power prices, typically depressed by gas-fired plants or windpower."

Lovins and Palazzi conclude that "efficiency is clearly cheaper than average nuclear operating costs, which exceed 4¢/kWh [4 cents per kilowatt-hour] at the busbar and 8¢ delivered. Thus overall, for saving coal plants’ carbon emissions, efficiency is about 10–50x more cost-effective than new nuclear build—or about 2–12x more cost-effective than just operating the average U.S. nuclear plant."

Regarding nuclear power's retreat, Lovins and Palazzi report:

"Nuclear power also has to run ever faster to stay in the same place as its 1970s and 1980s growth turns into a bulge  of retirements. After the next few years, retirements will exceed all planned or conceivable global nuclear additions, even with all license extensions as shown here. Power reactors’ terminal decline will be over by about 2060—and in view of both competition and aging, this projection by Mycle Schneider [Mycle Schneider et al., World Nuclear Industry Status Report 2013] is more likely to overstate its longevity than its brevity."

They conclude their presentation by stating: "So whether you choose e fficiency, cogeneration, or renewables, just being nearly carbon-free does not make new nuclear build an effective climate solution. Rather, because it saves ~3–50x less carbon per dollar than its main competitors, and deploys slower, new nuclear build reduces and retards climate protection. If climate is a problem, we must invest judiciously, not indiscriminately, to get the most solution per dollar and per year. Anything less makes the problem worse. Nor do we need nuclear power to offset PVs’ and windpower’s variability, or to scale faster than renewables, or to save or make money, because, as we’ve seen, nuclear power cannot do any of these things. So there is no reason to build more nuclear plants. Capital markets, seeing big new costs and risks without offsetting benefits, long ago reached the same conclusion. Existing nuclear plants, a future idea whose time has passed, will simply retire; the only choice is how quickly and at what cost to whom. End of story." (bold added)

"Exelon Nuclear -- Holding Illinois Hostage Yet Again?"

Dave Kraft, Director, Nuclear Energy Information Service (NEIS) of ILDavid Kraft, Director of Nuclear Energy Information Service (NEIS) of IL, has published an analysis, "Exelon Nuclear -- Holding Illinois Hostage Yet Again?".

The Chicago business press has recently reported that Exelon has threatened to permanently close as many as five of its atomic reactors, unless the State of IL provides bailouts to keep them afloat. Specifically, those reactors are: two at Byron, two at Quad Cities, and one at Clinton.

Quad Cities Units 1 & 2 are Fukushima Daiichi twins -- GE BWR Mark Is.

NRC rubberstamped their 20-year license extensions years ago. As Dave's analysis mentions, Byron 1 & 2 have now applied for 20-year extensions as well. Despite the license extensions, the future of these reactors' operations is now quite dubious.

Dominion's Kewaunee atomic reactor in WI permanently shutdown a year ago, despite having already received a 20-year license extension rubberstamp from NRC.

Update on April 27, 2014 by admin

Dave Kraft at NEIS has published a related fact sheet, NO RATEPAYER BAILOUTS FOR EXELON’S “NUCLEAR HOSTAGE CRISIS."