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* AP…
Illinois could help prevent Exelon Corp. from closing nuclear plants by adopting policies that penalize competitors that emit carbon dioxide, including coal-fired power plants, according to a report released Wednesday by several state agencies.
House Speaker Michael Madigan last year directed the Commerce Commission and several other agencies to study ways to boost the financially struggling nuclear industry, after Exelon said it might have to close at least three of its six Illinois plants.
The report suggests the state could favor Exelon because its nuclear plants generate electricity without emitting greenhouse gases […]
Exelon has told lawmakers it wants to be included in a “clean portfolio standard” under which nuclear, solar and wind power producers are rewarded for providing energy to the state. Otherwise, the company could push for a price on carbon that would make its nuclear plants more competitive.
The full report can be read by clicking here.
* Tribune…
Illinois governmental agencies Wednesday issued a report proposing ways to prop up Exelon’s ailing nuclear power plants, citing the economic and environmental impact that closing those plants could have on the state.
The agencies suggested programs and taxes that would punish electric generators that burn carbon-based fuels and produce carbon dioxide, a greenhouse gas. Exelon’s nuclear plants don’t emit greenhouse gases.
Regardless of whether Exelon’s plants continue to operate or are shuttered, Illinois ratepayers will see higher electricity bills, according to the report.
For instance, if the state legislature decides to tax carbon dioxide emissions to help Exelon, the move would drive up electricity prices 17 to 21 percent over 28 years, the report said.
Closing nuclear plants; however, would also cost “hundreds of millions of dollars or more” in upgrades to transmission lines needed to bring in new forms of power to the state, the report said.
Exelon is considering closing the Quad Cities, Byron and Clinton power stations due to unprofitably. The company has been lobbying the state to provide economic relief by recognizing the benefits of nuclear as a carbon-free source of electricity.
The report said that on balance closing the plants could benefit the state in terms of jobs. There would be 2,500 jobs lost if the plants closed, but 9,600 jobs could be gained by 2019 if the state invested in renewable power sources, the report said. Pointing to another balancing point, the report said $1.8 billion in economic activity would evaporate if the plants closed, but $120 million in energy efficiencies would be the result of an investment in renewables. […]
On the environmental front, the Illinois Environmental Protection Agency said there would be a price to pay for having the state rely more on fossil fuels. The immediate price tag for the environmental and health backlash between 2020 and 2030 could rise to $18.6 billion. Presumably, there would be long term expenses based on climate destabilization, as well.
* Howard Learner, Executive Director of the Environmental Law & Policy Center…
“This report shows that Exelon’s nuclear plants that aren’t economically competitive can be retired without added costs to Illinois consumers, without hurting reliability, and with more job creation by growing clean renewable energy and energy efficiency.”
“This report confirms that the competitive power market is working to hold down Illinois energy costs. We shouldn’t bailout Exelon’s old, uncompetitive nuclear plants. Instead, we should invest in new renewable energy, like wind and solar, and energy efficiency to grow a cleaner Illinois energy future.”
* From David Kraft at the Nuclear Energy Information Service…
“Even though Exelon did their best to convince everyone that the sky is falling here in Illinois, even a poorly mandated, non-funded, public discounting and disenfranchising, abstract-model-heavy analysis could not reach that conclusion,” says Kraft.
“Given the guardedly incomplete conclusions of this Report, and the uncertainty about FERC awarding an additional $560 million in profits to Exelon, there is no legitimate reason for the Legislature to take immediate action on Exelon’s requests for a bailout, by any mechanism.”
According to Kraft, “The situation and the conclusions from this Report call for a number of things to happen first, before such consideration should even begin:
1. Exelon needs to open it books to the State and the public, on a plant by plant basis, to conclusively prove its need;
2. The Legislature FIRST needs to fix the Renewable Energy Portfolio Standard to guarantee that EE/RE WILL be available to soften any economic or reliability damage the closure of the 5 money-losing reactors would cause, as the Report suggests numerous times it could;
3. No Legislative decision should be rendered prior to the FERC deciding on its potential $560 million award for Exelon. The Legislature should not set up an opportunity for a billion-dollar Exelon “double-dip.”
4. Alternatives to the Exelon proposals, and to Exelon as an energy provider, should be thoroughly investigated by the Legislature. Perhaps some of Exelon’s competitors would be willing to step up and fill some of the energy vacuum Exelon would create by closing the 5 reactors, and do so in a more economic, forward thinking manner — as the Report suggests should be done.
“The energy future of Illinois and its effects on the Illinois economy for decades to come are at stake with the Legislature’s decision,” Kraft warns. “Their job is to get it done RIGHT, not QUICK.”
* Meanwhile, the Tribune all but confirms widespread speculation that the General Assembly won’t send the Ameren/Comed bill to Gov. Quinn…
It’s a matter of timing. Quinn, who’s taken a tough line on some utility legislation, leaves office Monday when Rauner takes the oath as governor. But the new General Assembly isn’t sworn in until Wednesday. That leaves a brief window for Cullerton to send the bill to Rauner instead of Quinn. […]
“You probably ought to watch that,” Quinn told the Chicago Tribune in a recent interview. “They’re waiting for me to leave.” […]
Cullerton spokeswoman Rikeesha Phelon said Quinn traditionally “hasn’t welcomed utility bills.” She confirmed the idea of waiting for Quinn to leave office is a “consideration.” […]
“The action came in the fall after Gov. Quinn’s loss in the election, leaving a very short amount of time for the legislature to respond if the lame-duck governor made changes or vetoed the legislation,” said Radogno spokeswoman Patty Schuh. “By holding it, it allows the incoming governor to take the necessary time to review the legislation and make his decision.”
posted by Rich Miller
Thursday, Jan 8, 15 @ 9:04 am
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I took part in the design and construction of all three stations, and I’d like to warn that there are all sorts of accounting “gimmicks” that can make profitable ventures appear unprofitable.
Looking at the links, I couldn’t find the key metrics that should form the basis for this decision; cost of nuclear generation per kWh in the nukes, depreciation rates and durations taken, available cost per kWh from the system grid from other producers, and the “peak” capacity for Exelon compared to projected and actual peak demand.
The “renewables” like central Illinois wind are likely far more expensive forms of generation compared to nukes in absolute terms, and certainly much cheaper with the nukes when non-subsidized costs are compared.
Exelon, which was pretty much dominated by PECO when the merger with ComEd occurred, made dramatic improvements in generating availability follwing the merger. Poor performance was primarily a ComEd management problem rather than from market and infrastructure.
The shutdown of Zion to “punish” recalcitrant staff was also a head scratcher.
Until someone with the time goes through the cost components to establish what’s causing unprofitablility, there’s no way this thing should move forward.
I really hope this doesn’t get muddied up with all this “carbon credit” and “renewable energy” garbage. It’s an economic and political issue. that’s where the debate should be framed.
Comment by Arizona Bob Thursday, Jan 8, 15 @ 9:45 am
“Given the guardedly incomplete conclusions of this Report, and the uncertainty about FERC awarding an additional $560 million in profits to Exelon, there is no legitimate reason for the Legislature to take immediate action on Exelon’s requests for a bailout, by any mechanism.”
Amen David Kraft!
Comment by Chicago Cynic Thursday, Jan 8, 15 @ 10:04 am
==Until someone with the time goes through the cost components to establish what’s causing unprofitablility, there’s no way this thing should move forward.==
They did. Costs aren’t going up. Prices are going down.
Comment by Abe the Babe Thursday, Jan 8, 15 @ 10:05 am
So if I’m reading this right, the highlights/lowlights are…
Legislature members receive huge campaign contributions from Exelon which =
Legislature decides to tax carbon dioxide emissions to help Exelon, the move would drive up electricity prices 17 to 21 percent.
Shuttering the plants = net 7100+ jobs in 5 years…
If Legislature (receiving another campaign contribution) votes yes, Exelon get a possible $1,000,000,000 (that’s a BILLION) ‘double dip’ (hey, don’t some people do that with pensions? Just sayin’)
IMHO, Exelon can wait for a pay raise like the rest of working stiffs. They appear to do much better at legislative bullying (or should I call it buying) and not so good at running a power company.
Comment by northernwatersports Thursday, Jan 8, 15 @ 10:17 am
Oil under $50 per.
That’s the real brake on movement to renewables, and non-CO2-producing energy.
How long will we have to ride that out?
Comment by walker Thursday, Jan 8, 15 @ 10:23 am
So one of the long-time biggest coal-burners on the planet gets hippie-dippie green all of a sudden, lol.
They’re scared to death if they have to shut down their nukes as commercially unviable they’ll have to pay to decommission them.
Edison has been charging you for future decommission costs forever. Wonder how much of that cash was set aside for when the time comes?
Comment by Wordslinger Thursday, Jan 8, 15 @ 10:34 am
We have a lot of people who mine illinois coal for a living. Boosting nuclear over coal will costs lots of good paying jobs. Just saying.
Comment by Ghost Thursday, Jan 8, 15 @ 10:37 am
===We have a lot of people who mine illinois coal for a living===
About 4,000.
And most of our coal is being exported overseas.
Comment by Rich Miller Thursday, Jan 8, 15 @ 10:41 am
The EPA doesn’t allow high sulfur Illinois coal to be burned in Illinois. Midwest generation, when it was operating, had to bring in low sulfur coal from Utah to burn in Illinois.
Use of Illinois coal in the US has pretty much been regulated out of business by DC.
Comment by Arizona Bob Thursday, Jan 8, 15 @ 10:55 am
Lincoln said it best. “figures don’t lie, but liars sure do figure”
There would be 2,500 jobs lost if the plants closed, but 9,600 jobs could be gained
Sort of. What the report REALLY says is that you REMOVE 2500 VERY high paying jobs, and replace them with some construction jobs that will end. There will be much fewer REAL jobs after all is said and done. And the report notes that:
Once
wind and solar installations are complete in 2020, net job losses will total 5,539.
Page 150, in the middle.
Comment by Pat C Thursday, Jan 8, 15 @ 11:02 am
A href=”http://www.stltoday.com/news/local/a-look-back-black-tuesday-spurred-crackdown-on-coal-pollution/article_00c3b6cd-ba69-5a19-b498-fbc29f9630c4.html”>Here is what St. Louis looked like when it used Illinois coal.
Comment by VanillaMan Thursday, Jan 8, 15 @ 11:16 am
One ridiculous from Learner and Kraft’s misrepresentations is this idea that if we just “invest” in renewables we won’t miss the 100 million megawatts of nuclear power.
We cannot simply cross our fingers and hope renewables can replace that amount of electricity. The entire current wind fleet only represents about 4% of our electricity. We’d need ten times the number of turbines right away. That is simply nuts. Much of Illinois is not suitable for wind energy (you can’t put it in populated areas or where the wind isn’t strong).
Yes, renewables are the future and innovation is worth pursuing, but the report says clearly that if these plants close, prices will go up and jobs (about 8,000 total) will be lost. The report says we COULD mitigate those loses if we did various things. But we don’t have the money or the political consensus to do them.
Folks should get real and actually look a the report and see what it really says.
Comment by Adam Smith Thursday, Jan 8, 15 @ 11:21 am
Rich true, but those miners are paid on average around 78k a year. Darn good wages. And in 2012 a new colanpower plant and mine came online creating around 600 jobs.
Coal plants create more jobs locally as we get the jobs to run the plant, and the people to mine the fuel.
Comment by Ghost Thursday, Jan 8, 15 @ 11:22 am
Adam, Exelon is all on the side of renewables now. No carbon dioxide.
They want to lock in and protect their nukes from the coming wave of natural gas conversion. It’s the next big thing: huge supply, cheap and burns about half the CO2 of coal.
Comment by Wordslinger Thursday, Jan 8, 15 @ 11:32 am
Actually Adam Smith, the report says that if the nukes close there would be job loss but that those jobs would be replaced and a NET of 9,000+ jobs would be created if the legislature simply fixed the renewable energy standard and expanded the use of energy efficiency. In fact the report finds that that scenerio saves ratepayers $120 million per year. See page 126.
If anything, this report underestimates the benefits of using more renewable energy and energy efficiency since it stops looking at benefits of those in 2020 but our existing statutes require that our investment in those technologies extend indefinately and, in the case of renewable energy, continue to increase on an annual basis.
Looks to me like they cooked the report as best they could in Exelon’s favor. If they ran the numbers out for job creation and cost savings to 2030, it would be horribly grim for all fossil generators. Things that have no marginal cost, like energy efficiency and solar power, will, in the long run, always be cheaper than anything else. That’s Economics 101. The sooner Illinois prioritizes those things, the faster we’ll get cheaper power, make the state more competitive, create more jobs etc.
Comment by Pageturner Thursday, Jan 8, 15 @ 11:46 am
== “…the 100 million megawatts of nuclear power.” ==
Did you mean the 5,184 megawatts of summer capacity at the three proposed locations?
Comment by MikeMacD Thursday, Jan 8, 15 @ 11:48 am
Lunacy. Total lunacy.
This state doesn’t even have two figurative nickels to rub together.
Yet we should commit beaucoup bucks to nuclear welfare?
Yeah. Nuclear welfare.
While welfare for human beings is at a breaking point (see today’s Munger post about Topinka.)
Now. Why won’t private capital come in on behalf of Exelon?
Because the Byron, Clinton, and Quad Cities plants are, by Exelon’s own account, unprofitable. And private capital don’t back no losers.
So if investors and shareholders are disinclined to pony up, who ya gonna call?
You got it. Ratepayers. And taxpayers.
Look. We’ve had nuclear power plants in this state since 1960. Fifty-five years on, it’s now abundantly clear that they are unable to stand on their own financially.
So from a strictly bean-counting standpoint — time to give it up. (Look at it this way: private capital already HAS given up. Otherwise they’d be all-in, right?)
One more thing: the suggestion that nukes don’t emit greenhouse gases (as they sit online purring like kittens, mind you) is, I think, a half truth.
Enormous amounts of fossil fuel are used in the extraction and processing of uranium ore. And in the construction of the plants themselves. So is there really a net environmental gain? I wonder.
I’m outta here.
Comment by Third Reading Thursday, Jan 8, 15 @ 12:05 pm
=Oil under $50 per. That’s the real brake on movement to renewables, and non-C02-producing energy=
Oil is a non-factor when it comes to generating power in most of the country and particularly in the Midwest.
=The EPA doesn’t allow high sulfur Illinois coal to be burned in Illinois=
Wrong. The newer, more modern power plants in the state like the Prairie State Energy facility in Washington County are burning Illinois high sulfur coal.
I think cheap natural gas, transmission bottlenecks and lower electricity demand are causing the biggest headaches for the nuke plants in IL. Adding more transmission capacity to move electricity through Indiana to urban centers out east would be a good short-term fix to help the nukes and large wind energy producers too.
Comment by Going nuclear Thursday, Jan 8, 15 @ 12:25 pm
@pageturner
=Things that have no marginal cost, like energy efficiency and solar power, will, in the long run, always be cheaper than anything else.=
Sounds like your ready to invest in bankrupt Solyndra… AGAIN.
You’re way off base here. Unreliable “renewable” energy, like solar and wind, require full capacity back up generation infrastructure so that when the wind isn’t blowing and the sun isn’t shining, everbody’s lights don’t go out. If you’re going through the capital expense of fossil generation capacity anyway (typically gas turbine peaking units which have a VERY high generating cost, ALMOST as much as the real cost of solar and wind)you most cost effectively use them for generation instead of the “renewables”.
The simple fact is that Exelon wants to have their cake and eat it too. When market rates are high for electricity, they wanted the “free market”. When market rates are low due to conservation, population reduction in the Midwest and de-industialization in the rust belt, they want public subsidies.
I don’t blame them for asking… but I sure would blame the pols if they give it to them!
The fact is that no one in the region is building fossil or nuclear plants anymore. If Exelon wants to keep stations in “hot standby” to reduce fuel depletion, more power to them. Decommissioning about $30 billion in power generation infrastructure, however, makes little economic sense.
I just glanced through the report, but I haven’t been able to find why LaSalle and Dresden (among the oldest units in their system) have lower operating costs. Dresden is very similar to Quad Cities in age and condition. Why is that profitable while Quad isn’t? Clinton is a single generating unit compared to multiple units at the other stations, so maybe mothballing that unit makes sense.
Braidwood is virtually the same design and operation as Byron (same generation of PWRs-Pressurized Water Reactors). Why is Braidwood profitable but Byron not?
Discard all the arguments about benefits of reducing “greehouse gasses”. That’s a red herring that will be exposed by REAL science soon enough, and shouldn’t be the basis of policy decisions, especially economic ones.
These low electricity prices (which really aren’t that low) are a temporary thing. With no new SERIOUS power generation coming on line (wind and solar are pittances)it won’t be long before demand catches up with diminishing supply and prices rise.
Of course, keep an eye out for the “SMART grid” scam I’ve been warning about for some time now. Once it’s operational, the utilities will be gouging consumers by charging higher rates at peak hours, despite the fact that nukes’ generating costs are the same regardless of time of day. They’re base loaders.
Bet on it, folks. What really hurts is that consumers are being forced to pay for the rope that’ll be used to hang them…..
Comment by Arizona Bob Thursday, Jan 8, 15 @ 12:38 pm
@goingnuclear:
Here’s some info regarding Prairie State from Wikpedia:
=PSEC started delivering electricity in 2012 at prices well above market rates.[5] Some of its investors resell the energy at a loss, some raise consumer rates, and two backed out of the project.[5] PSEC’s original $2 billion estimated cost attracted municipal electric utilities to invest and to sign 28 year contracts. However as of early 2010 the estimated cost had increased to $4.4 billion, requiring investors to borrow more money and raising the projected cost of electricity to undesirable levels.[4][13]=
They needed to provide extraordinary expense scrubbing and precipitator technology to even get licensed and generate juice, goingnuclear.
They’ve also been criticized for CO2 emissions since they didn’t install even MORE expensive coal gassification technology.
I should ammend my statement. No economically FEASIBLE Illinois coal generation is allowed to occur in Illinois.
This has all the earmarks of a just another costly boondoggle.
Comment by Arizona Bob Thursday, Jan 8, 15 @ 12:58 pm
A few thousand in campaign contributions to the Madigans goes a long way.
http://www.examiner.com/article/madigans-campaign-donations-from-exelon-and-constellation-lobbyists
Comment by Liberty Thursday, Jan 8, 15 @ 1:19 pm
@Bob:
I have no problem mandating that coal emissions be scrubbed to the greatest extent possible. Anybody that favors economics over the environment has their priorities backward in my opinion. If I have to pay a few more dollars for my electricity to have this “luxury” then so be it. I’d rather do that than have a bunch of toxins released into the environment. I’m OK with coal. Don’t think I’m some big coal basher. I just think we should make it as clean as possible.
Comment by Demoralized Thursday, Jan 8, 15 @ 1:28 pm
Demoralized:
I agree in principle, but let’s face it - everything we use has a trade off. “Clean as possible” regardless of cost would make it way uneconomical to ever use coal. We could reduce fatalities on Illinois highways as low as possible, too, with an enforced 5 mph speed limit on all the interstates. “As low as reasonable and feasible” is more like it.
Comment by Six Degrees of Separation Thursday, Jan 8, 15 @ 3:12 pm
@Demoralized
=Don’t think I’m some big coal basher. I just think we should make it as clean as possible.=
I agree, and if we can’t do it cleanly and healthfully, we shouldn’t build it.
In the 1980s I spent a good part of my career designing sulfur scrubbing systems on power plants to address the very real acid rain problems that existed. It cost money, but I believe the monsy was well spent. Lake and forest acidification in the Northeast has essentially been abated today.
I alos worked a lot on particulate filter and electrostatic precipitator upgrades on coal power stations. It removed unhealthy carbon particulates from the air that certainly contributed to respiratory problems of the people.
In the early 2000s, I designed energy efficiency projects on schools to reduce pollution, save energy and reduce cost. It was win-win-win and it made sense.
It seems strange, but you’d be surprised how many times the upgrades that save energy and reduce pollution actually wind up costing less in public health, safety and energy costs far in excess of their expense over the long term.
Those all made sense, unlike this abstract “greenhouse gas pollution” nonsense.
Comment by Arizona Bob Thursday, Jan 8, 15 @ 3:25 pm
My goodness Bob I’ve agreed with you twice in two days. Perhaps that’s why it’s so cold here. Did hell freeze over? lol
Comment by Demoralized Thursday, Jan 8, 15 @ 3:53 pm
Yes, Bob. Energy efficiency is the answer.
Comment by yo Thursday, Jan 8, 15 @ 4:24 pm
wordslinger,
you’re right about the decommissioning. Exelon hasn’t put a dime into their decommissioning funds since Illinois ratepayers put $73 million a year million into Zion’s fund from ‘01-’06. The NRC requires a minimum amount of funding in separate decommissioning accounts, but the company only has to show that the current amount, multiplied by the average market rate of return, will result in enough money to decommission the plant at the end of the time frame allowed for the plant to sit idle after it shuts down. That time frame is 60 years after the end of its current license. So if one of those plants closes tomorrow, either Exelon dumps a lot of its own money into the fund to get decommissioning going (unlikely), waits 60 years for the market to make up enough money to cover decommissioning (unlikely we’ll accept that), or they come back to Illinois ratepayers to bail them out again. The latter is almost a foregone conclusion. For comparison, Zion’s decommissioning is estimated to cost $1B, Vermont Yankee $1.24 billion. As of the last filing Clinton’s fund had $386 million and the decommissioning estimate was $800 million. Where are they going to get that money?
Comment by energist Thursday, Jan 8, 15 @ 5:20 pm
=I should amend my statement. No economically FEASIBLE Illinois coal generation is allowed to occur in Illinois=
You’re moving the goal posts Bob. The Prairie State Energy plant is the cleanest coal-burning plant in the state and one of the most modern facilities in the world. It’s also a mine-mouth plant, which means no truck or rail emissions from transporting coal to the plant. The municipal utility plant in Springfield and the Southern Illinois Power Co-op plant in Marion are also burning Illinois high sulfur coal. These three plants are a huge improvement over the old Ameren and ComEd plants that were sold off years ago. Yes, the plants are more expensive because they operate with the latest pollution controls. However, their electricity prices are more reflective of the true costs associated with burning fossil fuels and we should appreciate that the municipal utilities and rural co-ops were willing to invest in them.
Comment by Going nuclear Thursday, Jan 8, 15 @ 6:50 pm