Nuclear, Renewables

Here We Go Again

Issue 6 and Volume 120.

By Sharryn Dotson, Editor

Kewaunee. Vermont Yankee. Pilgrim. FitzPatrick. Now, we can potentially add Fort Calhoun, Clinton and Quad Cities to this list that plant operators don’t want to be on. All of these nuclear plants have either ceased operations prematurely, announced that they will retire early, or are weighing the option to shut down early. The main takeaway is this: They’re all closing before their operating licenses expire due to adverse market conditions.

In my previous column, “A Lesson Not Learned,” I wrote that industry leaders have been sounding the alarm to change some electricity markets for years now, but no one is listening. I’m sure Marvin Fertel, president and CEO of the Nuclear Energy Institute, feels like a broken record. He’s been pushing for market reforms since at least 2013 (and probably before) when the Kewaunee Station in Wisconsin shut down. He spoke out again the following year when Vermont Yankee shut down. In 2015 when Entergy announced it was closing the Pilgrim plant, Fertel said: “Today’s announcement is more proof that the reforms urgently needed in competitive electric markets are too slow in coming. Design flaws in wholesale markets such as New England continue to result in artificially low electricity and capacity prices.” Entergy followed up by announcing it would close down the FitzPatrick plant in New York. Fertel again gave a warning: “The fact that the FitzPatrick nuclear energy facility in New York is the industry’s fourth nuclear power plant to prematurely close due to uncorrected flaws in competitive electricity markets is alarming.”

That was obviously not alarming enough. Exelon said in June it will close both the Clinton and Quad Cities plants in Illinois. Quad Cities also did not clear PJM’s 2019-2020 capacity auction. Clinton cleared MISO’s capacity auction, but it will not be bringing in enough money to operate. As if that didn’t already sting, the CEO of the Omaha Public Power District hit us with the news that it doesn’t make financial sense to continue operating the Fort Calhoun nuclear plant past 2016. He suggested that the 400-MW plant – considered the smallest in North America – close early. Workers with OPPD and Exelon Generation fought through flooding, fire, violations and increased NRC oversight to bring the plant back to full operations, only to possibly shut down by the end of this year because, once again, the markets can’t support the operating costs? Like a serious case of déjà vu, NEI is back with a comment, this time from spokesman Steve Kerekes: “It is incumbent upon our nation’s political leaders in Washington and state capitols to put together the policy pieces that appropriately value all attributes of electricity generation and preserve nuclear energy facilities in a diversified electricity portfolio. There is an urgent need to develop policies that will prevent additional, premature nuclear plant retirements, because the economic and environmental consequences are enormously negative.”

Fertel spoke during the DOE-sponsored summit on nuclear energy economics where he predicted more closures are possible.

“We see 15-to-20 plants at risk of shut-down over the next five-to-10 years,” Fertel warned. The ones who bear the brunt of these negative consequences are the workers at the plants and the communities where they are sited. Each plant slated to close or potentially closing employ around 600 workers. That’s 4,200 jobs lost. Yes, many of the jobs would have been lost to retirement, but many more would have stayed on for years down the road.

That’s also lost tax revenue in communities across Wisconsin, Illinois, Vermont, Massachusetts, New York and Nebraska. Jobs will be phased out as decommissioning proceeds and some will be lost to retirements, but a majority of folks will be left to job hunt. When Kewaunee shut down in May 2013, plant operator Dominion said the plant’s tax payment to the town of Carlton, Wisconsin, would decrease 20 percent each year until 2019.

It’s obvious the U.S. nuclear industry needs market reforms now more than ever. Nuclear plants aren’t asking for a handout, just that the plants are compensated like other zero-emissions generating sources like solar and wind energy. How many more alarms need to sound before officials realize what is going on and work toward a solution?