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Nuclear Power’s Last Tango: Industry’s Promise Fails to Outrun Crippling Costs

| February 1, 2015

Nuclear power's promise has kept falling short. (Michael Kappel)

Nuclear power’s promise has kept falling short. (Michael Kappel)

Everybody loves a comeback story. If you like the U.S. nuclear power industry, it’s a Michael Jordan-type gallant return. If you don’t like nukes, it’s more of a Gloria Swanson gruesome comeback in Sunset Boulevard.

Similar to both Jordan and Swanson’s character, Norma Desmond, the industry has tried more than one revival. The current one may be more about salvaging economically dicey nuclear reactors than building new ones.

Promise and Peril

There is some promise for nuclear: projects in Georgia, South Carolina and Tennessee may yield the first new nuclear plants in decades. The industry and its advocates are touting new, safer reactor designs.

In addition, thanks to a Federal Appeals Court decision, utilities no longer have to add to the $30 billion burden of paying for the abandoned Yucca Mountain Nuclear Waste Repository. And the Environmental Protection Agency is pressing hard for its rules to reduce carbon emissions, which would squeeze competing coal-fired plants.

But on the flipside, Wisconsin, California, Florida and Vermont are shuttering aging nuclear plants, and some planned new ones have been shelved in Maryland, New York, Texas and Florida. Closing and decommissioning isn’t cheap – usually a billion dollars or more. As many as seven reactors in Illinois, Ohio, and New York could close this year if not rescued by ratepayers.

Nukes also have been getting their lunch eaten in the deregulated electricity marketplace, mostly by cheaper natural gas. More on that in a bit.

Those new nukes, particularly the ones in Georgia, are falling behind schedule and soaring over budget, making an already-jittery Wall Street even more skeptical. The demise of Yucca Mountain means there’s nowhere for the industry to permanently store its waste. And just when you thought it was safe to atomically boil the water, Fukushima provided the first nuclear mega- disaster since Chernobyl a quarter-century earlier, fairly or unfairly reviving public unease about nuclear energy’s safety in the U.S.

And it didn’t help when the longtime CEO of America’s biggest nuclear player stuck the financial fork in shortly after his retirement.

John Rowe, a longtime nuclear booster and former CEO of Exelon, the Chicago-based offspring of mergers between Commonwealth Edison of Illinois, Philadelphia’s PG&E, and Baltimore-based Constellation, oversaw 23 reactors. “I’m the nuclear guy,” Rowe told a gathering at the University of Chicago two weeks after his 2012 retirement. “And you won’t get better results with nuclear. It just isn’t economic, and it’s not economic within a foreseeable time frame.”

Rowe was commenting on plans for newly built reactors. But old ones, including up to six of Exelon’s fleet, may be on the block.

States to the rescue

In the 1990’s, the Federal Government and many states moved to deregulate electricity. Leaving every potential power source free to marketplace dynamics, it was reasoned, would serve ratepayers well and promote competition among generators. The biggest boosters of deregulation were heavy industries looking to reduce their enormous power bills, and an up-and-coming energy trader called Enron, which thrived for a few years before collapsing in scandal.

The industry’s embrace of deregulation isn’t universal, though. In at least four states, nuclear utilities have sought state government assistance to benefit nuclear plants, if not keep them alive and running.

Officials at Chicago-based Exelon say the free market may soon kill off several of its nukes. Exelon’s CEO has been outspoken about its opposition to subsidies for its wind industry, but the company is not shy about seeking short-term help for their own financially troubled nuclear plants.

ehnIllinois may be nuclear’s short-term ground zero. Exelon operates nukes at six sites in the state and acknowledged that three – the two-reactor complexes at Quad Cities and Byron, and the Clinton single reactor site – may have priced themselves out of the market. Closure of the three could mean 7,800 job losses at the plants and related industries, according to Exelon’s spokesman Paul Adams. A report earlier this month by several Illinois state agencies cited a smaller job-loss figure, 2,500, but added that the state could add 9,600 jobs in the next four years through energy efficiency and a renewable energy standard.

While Exelon CEO Chris Crane insists that the company is not seeking a bailout, and Exelon spokesman Adams said that all “energy technologies should compete on their own merits,” Crain’s Chicago Business and other publications have reported that the company is pushing state regulators to restructure power markets in a way that critics say could stack the deck for their beleaguered nukes. Exelon senior vice president Kathleen Barron told the Illinois Commerce Commission last September that the company needs rate increases that would bring in $580 million in additional revenue to keep its nukes afloat. That extra cash would come from ratepayers, particularly at times of peak power usage.

While Exelon bristles at mention of the word “bailout,” others see it as exactly that. “We don’t think Illinois consumers should be called upon to bail out Illinois nuclear plants,” said Howard Learner, executive director of the nonprofit Environmental Law & Policy Center.

Exelon also is pushing the state for a carbon tax, which would hit its fossil fuel rivals in the energy market but leave nuclear plants unscathed. Years ago, the company swore off coal for electricity, selling its coal assets. Its Illinois nukes comprise 95 percent of the power Exelon sells in Illinois and neighboring states. Exelon also is banking on its nukes in Illinois and elsewhere to help states meet the EPA’s proposed carbon reduction mandates.

Another Exelon nuke, the Ginna plant near Rochester, New York, is on the brink. Facing a deadline on power purchases from the 45 year-old plant’s biggest buyer, Rochester Gas & Electric, Ginna will close without a rate hike, according to Exelon. The plant’s license doesn’t expire till 2029.

Florida’s Department of Environmental Protection weakened rules regulating nuclear power plant water discharges.

Ohio is considering rate hikes to save several aging coal plants and the Davis-Besse reactor near Toledo. FirstEnergy, operator of the trouble-plagued Davis-Besse, calls for an estimated $117 million “power purchase agreement” for its ratepayers. Longtime energy activist Harvey Wasserman called the potential rate hikes a “pillaging” of Ohio.

The utilities have spiced up the battle by resisting efforts to disclose financial data that could shed light on the plants’ financial health, and the need for a rate hike. And while the state ponders lending a hand to coal and nuclear, the Ohio Legislature effectively smothered wind and solar in the state by killing renewable energy standards last June.

Florida also has pitched in to help the industry: In mid-January, Florida’s Department of Environmental Protection drew fire from conservationists when they loosened oversight over hot water discharges from the Turkey Point energy complex south of Miami. Turkey Point’s two reactors and three fossil-fuel plants dump heated water into a four-decade-old network of cooling canals, where algae blooms and rising salinity are believed to threaten to coastal waters, public drinking water wells and Everglades recovery. In writing a new permit for the plant, the DEP cut local water officials out of the regulatory process, leaving the state agency in sole command of the canal field, a radiator-like matrix of 165 miles of waterways extending south from Turkey Point.

Unlike the reactors in Ohio, Illinois and New York, there’s no talk of imminent financial demise at Turkey Point. In fact, Florida Power and Light has state approval to build two more, larger reactors at the site, and is awaiting a green light from the NRC, expected in 2016.

But with the potential expansion, Tropical Audubon Society Executive Director Laura Reynolds sees the state DEP enabling a catastrophe for South Florida’s ecosystems.

“The amount of water they use is insane,” she said, adding a little gallows humor: “DEP’s new name should be “Don’t Expect Protection.”

–Peter Dykstra, Environmental Health News

This is the first of three parts. Part two will post next week. The series is funded by a grant from the Rockefeller Family Foundation.

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5 Responses for “Nuclear Power’s Last Tango: Industry’s Promise Fails to Outrun Crippling Costs”

  1. Sherry Epley says:

    I’m actually happy that the days of dangerous nuclear power plants with their horrific, indestructible waste are coming to an end! Time to move on to the development cleaner, more economical, renewable energy!

  2. Lancer says:

    How many died as a result of the reactor meltdown at 3 mile island? None.

    How many from the Fukushima meltdown caused by a Tsunami? None.

    The anti-capitalist cronies and government do-gooders in the EPA have done a first class marketing campaign lying about the danger of nuclear power.


    The initial investments for nuclear are tremendous. Much of the costs are a direct result of state and federal regulation and safety standards. However, the cost is supposedly measured and off set by the life span of the plant. So, Flagler Live, why didn’t you list the age of these plants? It would have been nice to see and understand the entire picture.

    South Carolina has an abundance of nuclear plants that they seem pretty pleased with. NG isn’t an option for everyone. Also, it’s only a matter of time before the mindless left wingers get the fracking and NG community in their cross hairs with more and more regulations and taxation.

    Also, I would have liked for Flagler Live to have dedicated a paragraph to how the nuclear waste is currently being dealt with and better explaining the “billions” in costs for decommissioning.

  3. Sherry Epley says:

    Least we forget:

    Chernobyl Disaster
    4,000 fatalities – Chernobyl disaster, Ukraine, April 26, 1986. 56 direct deaths (47 accident workers and nine children with thyroid cancer) and it is estimated that there were 4,000 extra cancer deaths among the approximately 600,000 most highly exposed people.

    Estimates of the total number of deaths potentially resulting from the Chernobyl disaster vary enormously: Thirty one deaths are directly attributed to the accident, all among the reactor staff and emergency workers. A UNSCEAR report places the total confirmed deaths from radiation at 64 as of 2008. The World Health Organization (WHO) suggests it could reach 4,000 civilian deaths, a figure which does not include military clean-up worker casualties.[5] A 2006 report predicted 30,000 to 60,000 cancer deaths as a result of Chernobyl fallout. A Greenpeace report puts this figure at 200,000 or more

  4. Sherry Epley says:

    Oh Yes. . . and then there was:

    Kyshtym Disaster
    The Kyshtym disaster, which occurred at Mayak in the Soviet Union, was rated as a level 6 on the International Nuclear Event Scale, the third most severe incident after Chernobyl and Fukushima. Because of the intense secrecy surrounding Mayak, it is difficult to estimate the death toll of Kyshtym. One book claims that “in 1992, a study conducted by the Institute of Biophysics at the former Soviet Health Ministry in Chelyabinsk found that 8,015 people had died within the preceding 32 years as a result of the accident.” By contrast, only 6,000 death certificates have been found for residents of the Tech riverside between 1950 and 1982 from all causes of death, though perhaps the Soviet study considered a larger geographic area affected by the airborne plume. The most commonly quoted estimate is 200 deaths due to cancer, but the origin of this number is not clear. More recent epidemiological studies suggest that around 49 to 55 cancer deaths among riverside residents can be associated to radiation exposure. This would include the effects of all radioactive releases into the river, 98% of which happened long before the 1957 accident, but it would not include the effects of the airborne plume that was carried north-east. The area closest to the accident produced 66 diagnosed cases of chronic radiation syndrome, providing the bulk of the data about this condition.

    Windscale Fire
    33+ cancer fatalities (estimated by UK government) – Windscale, United Kingdom, October 8, 1957. The Windscale fire resulted when uranium metal fuel ignited inside plutonium production piles; surrounding dairy farms were contaminated.

  5. Sherry Epley says:

    Oh Yeah. . . and then there’s the problem of nuclear waste:

    Illegal dumping
    Main article: Toxic waste dumping by the ‘Ndrangheta
    Authorities in Italy are investigating a ‘Ndrangheta mafia clan accused of trafficking and illegally dumping nuclear waste. According to a whistleblower, a manager of the Italy’s state energy research agency Enea paid the clan to get rid of 600 drums of toxic and radioactive waste from Italy, Switzerland, France, Germany, and the US, with Somalia as the destination, where the waste was buried after buying off local politicians. Former employees of Enea are suspected of paying the criminals to take waste off their hands in the 1980s and 1990s. Shipments to Somalia continued into the 1990s, while the ‘Ndrangheta clan also blew up shiploads of waste, including radioactive hospital waste, and sending them to the sea bed off the Calabrian coast. According to the environmental group Legambiente, former members of the ‘Ndrangheta have said that they were paid to sink ships with radioactive material for the last 20 years.

    Accidents involving radioactive waste
    Main article: Nuclear and radiation accidents
    A few incidents have occurred when radioactive material was disposed of improperly, shielding during transport was defective, or when it was simply abandoned or even stolen from a waste store. In the Soviet Union, waste stored in Lake Karachay was blown over the area during a dust storm after the lake had partly dried out.

    At Maxey Flat, a low-level radioactive waste facility located in Kentucky, containment trenches covered with dirt, instead of steel or cement, collapsed under heavy rainfall into the trenches and filled with water. The water that invaded the trenches became radioactive and had to be disposed of at the Maxey Flat facility itself. In other cases of radioactive waste accidents, lakes or ponds with radioactive waste accidentally overflowed into the rivers during exceptional storms.

    In Italy, several radioactive waste deposits let material flow into river water, thus contaminating water for domestic use. In France, in the summer of 2008 numerous incidents happened; in one, at the Areva plant in Tricastin, it was reported that during a draining operation, liquid containing untreated uranium overflowed out of a faulty tank and about 75 kg of the radioactive material seeped into the ground and, from there, into two rivers nearby; in another case, over 100 staff were contaminated with low doses of radiation.

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