Still more ratepayer bailouts needed, says Entergy exec

The nuclear power industry increasingly reminds one of nothing so much as the spoiled brat (or, possibly, the greedy king Midas) who, upon receiving a gift, instantly wants “more!”

Thus, when the Federal Energy Regulatory Commission (FERC) June 10 approved a plan put forth last December by the PJM grid–the largest of the three major grids in the U.S.–to reward high-performing power plants and penalize low-performing units, Entergy’s (the second largest nuclear utility) instant reaction was “more.”

A little translation may be in order. After all, it would seem to make perfect sense to reward the best and penalize the worst. But the real intent of PJM’s plans was to funnel more money to nuclear reactors at the expense of renewables and gas, under the guise that reactors are better able to keep the lights on during things like polar vortexes and other freaks of nature.

It’s all part of the nuclear industry’s “reliability” pitch that appears in just about every industry press release and public statement. Actually, reactors, especially Entergy’s, haven’t been all that reliable in extreme weather: its Pilgrim reactor was shut down more than once last winter because of major snow storms, for example. But renewables, by definition, are low-performing: their capacity factor is low compared with nuclear and fossil fuels. That’s not necessarily a problem in the real world; it just means you need more nameplate capacity with renewables to get the same actual output.

And you need a grid that can handle the variable nature of renewables. Again, not a problem, as several countries in Europe have shown the ability to incorporate far higher levels of renewables than exist yet anywhere in the U.S. Although, fortunately, we’re starting to catch up–and installed solar power close to reaching less than $1/watt is one reason why.

Anyway, as it turns out, Entergy wants another $3-5 per megawatt hour from ratepayers to keep its unprofitable reactors running. That’s roughly the same amount Exelon wants the Illinois legislature–or someone, Exelon isn’t all that picky about the venue–to award it to keep its uneconomic nukes operating.

Entergy’s solution is to have FERC simply issue an order requiring the nation’s Independent System Operators to do that.

In Entergy’s view, a rate increase of this size “is pretty minor compared with a present market structure where we’re shutting down viable plants.” So says well-paid Entergy exec William Mohl.

Unless, of course, you’re trying to live on a fixed income and pay your ever-rising electric bills.

But you’ve got to love the gall. Because even if you’ve got plenty of money to pay your electric bills, there is no downside for consumers at all in shutting down “viable” nuclear reactors. Indeed, even in strictly economic terms, there is an obvious upside: avoiding additional radioactive waste generation and the accompanying high costs of its storage. And, of course, there is the upside of avoiding the possibility of nuclear meltdown and the accompanying financial devastation that would cause, as well as the upside of avoiding the additional “routine” radiation releases and their related health costs.

Avoided costs and their related benefits may not show up in Entergy’s accounting books, but they do show up in society’s.

The fact is, if a nuclear reactor can’t make money selling electricity–and other forms of electricity generation can and do, and do it cleaner and safer besides–then the reactor is not a “viable” entity.

But the nuclear fanatics at Entergy, and Exelon, and FirstEnergy and the rest, honestly believe that regular people should pay more than they need to for electricity just because it’s nuclear electricity. They believe people on Social Security, the disabled and ill, those trying to get by on minimum wage, and the rest of us in somewhat better circumstances as well, all should devote a larger chunk of their barely-existent income to pay for nuclear electricity, because, after all, the utilities already built those reactors and they haven’t completely fallen apart yet–thus they’re still “viable.”

Never mind that they can’t compete economically with cleaner sources of electricity. Never mind that “viable” doesn’t mean they can or should operate into eternity. Never mind that perhaps, just perhaps, it is for the public–not self-serving nuclear utilities–to decide how they want their power generated, since as we all have learned over the past 30 or so years, our choices for the generation of electricity hold the fate of our planet, which is a little more important in the long-term than Entergy’s third-quarter profit-loss statement.

It’s because the suits at the nuclear (and fossil) utilities think that way, and because they hold a certain amount of political power and spend generously to assure that they will keep that political power, that no amount of persuasion, or education, or impending climate devastation that will destroy their lives as well as ours, will cause them to give up their obsolete power plants on their own.

Only blunt economics: the reality that their reactors won’t get bailed out and never will turn a profit again will force them to turn the key and bring them to permanent shutdown.

Dominion’s shutdown of its Kewaunee reactor did come out of the blue, and shook up the industry far more than we realized at the time. The industry quickly understood that it hadn’t done nearly enough to ensure that its reactors could operate at a profit. Vermont Yankee’s shutdown shook up the industry in a different way, because in that case the industry realized citizen opposition could shift the balance of political power and prevent the kind of financial maneuvering that might save uneconomic reactors.

At least Exelon in Illinois and New York has been kind enough to let the world know which of its reactors are in the most trouble, so has FirstEnergy. Now Entergy publicly acknowledges that both Pilgrim and especially FitzPatrick are on the edge (and New York’s new plan for 50% renewables within 15 years doesn’t bode well for either Fitzpatrick or Indian Point, or Exelon’s Ginna). Stopping the endless bailouts (because there will always be another one coming) is the start to pushing them over that edge and into their well-deserved oblivion.

Michael Mariotte

June 29, 2015

Permalink: https://www.nirs.org/still-more-ratepayer-bailouts/

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