Exelon’s Chris Crane blames lawmakers for his plant closure announcements
A few minutes ago, Exelon employees received an email from Chris Crane, the company CEO, announcing the company’s decision to permanently close three nuclear reactors that each produce 7-8 billion kilowatt hours of electricity each year without dumping a molecule of CO2 into the atmosphere.
Even though the company reported 2015 after-tax earnings of approximately $2.3 billion on total revenue of $30 billion, it has decided that it cannot afford to wait for the next high price part of the natural gas price cycle.
As a reminder to readers, a population that I hope includes several betrayed employees of the three severely threatened units, here is a graph of the price of natural gas to electric utilities since 2002.
As the chart shows, natural gas prices are about as predictable as mid-Atlantic weather in the spring. “If you don’t like it, wait a while; it’ll change.”
In any commodity, especially one based on a limited natural resource and has heavy capital investment requirements, the sure cure for an extended period of low prices is an investment-constrained reduction in supply combined with a price-driven increase in demand. There seems to be little doubt that natural gas prices have a lot more room to go up than to go down.
Though I have no direct insight into Exelon’s decision making processes or even into its specific plant financials, I can only guess that they had no real desire to keep Clinton and Quad-Cities operating. There is no other logical explanation for conditioning their decision on prompt action by a notoriously gridlocked legislature, especially when the desired action was guaranteed to be about as popular as a skunk at an outdoor wedding.
How many voters relish the notion of providing cash subsidies to corporations reporting after tax profits greater than a couple of billion dollars? Even when marketed as a job-saving move, there are just too few people who have close relationships with nuclear workers. Nuclear plant employees tend to be concentrated in small towns and can, quite frankly, be a target of envy among people who are working at much lower paying jobs with fewer benefits.
My question to all of the executives that are making plant closure decisions is why are the “uneconomic” plants being closed instead of being marketed to willing buyers?
There is a good Econ 201 case that can be made for closing down marginal production capacity in an oversupplied market, but when the assets being closed are described by the owner as some of their most cost effective production sources there is room to question motives.
If the only customers considered capable of purchasing the plants are the few companies that are already in the club of nuclear plant operating companies, then the closure decisions begin to look like coordinated action to restrain trade. Though enforcement of anti-trust laws has been sadly lacking in the US in recent years, this might be a time for responsible investigatory agencies to ask some hard questions.
Here is a quoted copy of the email that Mr. Crane distributed.
June 2, 2016
Exelon to Retire Clinton and Quad Cities Plants
Dear Colleagues,
It is with deep disappointment that I share with you our announcement today that Exelon will move forward to shut down the Clinton and Quad Cities nuclear plants, given the lack of progress on Illinois energy legislation.
Over the past two years, we have informed you about the financial challenges facing these plants, and we have worked to find a sustainable path forward in consultation with federal regulators, market operators, state policymakers, plant community leaders, labor and business leaders, as well as environmental groups and other stakeholders.
While the Illinois legislative session has not ended, the path forward for the Next Generation Energy Plan legislation is not clear. As a result, Exelon has begun taking necessary steps to shut down the two nuclear facilities, including making required notifications to the appropriate regulatory bodies, and stopping capital investments for long-term operation of the plants. Clinton will close on June 1, 2017, and Quad Cities will close on June 1, 2018. Quad Cities and Clinton have lost a combined $800 million in the past seven years, despite being two of Exelon’s best-performing plants.
This decision has been a difficult one for our 1,500 employees at both plants and the surrounding communities. I want to extend my sincere thanks to every employee at both Clinton and Quad who, despite the challenges we faced, continued to perform at the highest levels to ensure the safety and reliability of the plants. Your commitment in your day-to-day work and your outpouring of support for legislative policy solutions are very much appreciated.
As leadership has been communicating to employees at both sites, we will do all that we can to support employees in preparation for this transition. Employees will continue to operate the facilities until the retirement dates, with staff transitions expected within six months after retirement. In recognition of the severe impact the closures will have on the host communities for the sites, we also will partner with local civic leaders to prepare.
We will continue to work with stakeholders on passing the Next Generation Energy Plan that is critical to the state’s environment and economy. We will work with policymakers and other stakeholders to advance an all-of-the-above strategy to promote zero-carbon energy, create and preserve clean-energy jobs, establish a more equitable utility rate structure and give customers more control over their bills.
Thank you to those employees who took action and participated in the Springfield rally, or called or emailed your legislators. Our work to ensure that nuclear power is properly valued for its economic and environmental benefits is far from over. I ask that you continue to follow this issue as we work to bring about market and policy changes. For now, please reach out to lawmakers by calling (844) 334-1740 and leave a voicemail saying what these plant closures mean to employees, their family members and the plant communities.
Sincerely,
Chris Crane
Note: I just noticed one more thing in Exelon’s financials worth mentioning. In 2015, the company reported a non-operating income of -$46 M, down from $455 reported in 2014. Normally that line in an income statement is reporting investment or asset transaction income. What it tells me is that the net difference in non operating income during a single year ~$600 M was nearly the same as the reported unsustainable “losses” for operating the three reactors over the past seven years of unusually low natural gas prices.
The reason for the closure is simple: Exelon made a commitment to close the plants if they could not receive additional state funds. They are simply following through on their commitment. This action is really designed to send a message to the legislature: that Exelon isn’t bluffing.
@xoviat
I don’t disagree that Exelon is simply following through. I predicted that action in yesterday’s post.
My beef is with the chosen tactic of making the threat to begin with. There is no real pressure on Exelon to close the plants. They are paying their dividends and making a solid profit. They probably have some activist shareholders that are demanding greater returns, but courageous leadership should be able to explain the long view of maintaining valuable, productive assets in a commodity business that will experience more price cycles during the next several decades when the plants could be operating.
Of course, selfish management is often willing to sell out hundreds of workers in order to capture a lucrative bonus or two.
What is stopping Exelon from adding more transmission capacity to move the power to more lucrative regions?
Look at the wholesale electricity prices from EIA (do links work?). They’ve really collapsed to about the same throughout the country. In addition, the vertically integrated markets aren’t going to accept external generation. So, there is no where to go.
As I’m sure you’re well aware, the root cause is that new wind receives tax expenditures and existing nuclear doesn’t. Since this is a national policy, there is nowhere in the United States for existing nuclear to turn.
Closing fees – “Renewable” fees – tax incentives and some federal grants/funding ? Im sure there is more to it.
I cant wait for president Trump to hopefully fire nearly everyone at the NRC. They don’t do anything when it comes to informing the public reasonably on nuclear power.
Here are the FIRST words they put out on nuclear power under “Protecting People and the Environment” :
“How the NRC Protects You”
“Radiation and its risks command considerable public attention. However, over many decades, the U.S. Nuclear Regulatory Commission (NRC) has developed a system of radiation protection that reflects the world’s improved understanding of the effects of radiation. In particular, the NRC ensures that users of radioactive materials keep radiation exposures within the agency’s specified dose limits and as low as reasonably achievable.”
Im Done with um. Im done with Democrats like Clinton and Sanders too. Its hard to take them or anyone seriously on dealing with Climate Change when HUGE environmental assets like this are closed down with little consideration.
President Obama’s Democratic administration in fact did more to push nuclear than any administration in recent history. Without that support, there would not have been any the new nuclear that is under construction. Unfortunately, a number of these plants were stopped before they got far along because of the drop in natural gas prices and the unpredictability of nuclear construction costs. The debacle in Japan was probably the death knell.
Like appointing Gregory Jaczko as chairman of the NRC?
@John T Tucker
The Bush Administration left him no choice. Jaczko was the only Democrat on the NRC when Obama took office. There were only 3 commissioners in place. The people that president Obama actually appointed to the Commission – Ostendorff, Apostolakis, Magwood, Burns and Baran have been pretty OK.
Charles H. Boyd says
June 2, 2016 at 1:52 PM
President Obama’s Democratic administration in fact did more to push nuclear than any administration in recent history. Without that support, there would not have been any the new nuclear that is under construction.
Weren’t those plants actually long suspended in the pipeline and resumed, that there were no new plants actually freshly ordered during this term?
The only thing that the Obama administration did was not get in the way sufficiently to stop the construction of plants that were planned early in the Bush administration.
Whether Obama considers this a success, considers this a failure, or just doesn’t consider anything about it at all is known only to Obama himself. Like his school grades … it is something that we shall never know.
Because as we all know, the President can select the Chairman only from the existing, already-appointed Commissioners at the time. I guess that’s why Obama replaced Jaczko, not with one of the two Democrat Commissioners already serving on the NRC, but with someone he just appointed out of the blue. /sarc
Geez … Rod. “The Bush Administration left him no choice”? Could you be more ridiculous? Do you always have to blame Bush for everything?
@Brian Mays
Good point. I suppose he could have come into office ready to nominate several new commissioners and get them through the confirmation process.
I’m not sure how high a priority I would expect a new administration facing a number of immediate economic challenges and having an agenda to implement would place on filling vacancies at an agency with a pretty decent track record but a strong pro-nuclear one might have seen the importance.
You’ve been participating here long enough to realize that I am not a fan of the way either of the two parties treat nuclear. One bashes it, but reluctantly admits that it may have some residual value. The other sometimes touts its potential off in the distant future, sometimes reverses negative decisions without restoring any of the resources that were taken away and generally keeps some people happy with crumbs.
I remain convinced that the interest groups that would lose wealth and power in a world where nuclear energy has been unleashed from the thousands of Lilliputian threads used to restrain it over the past 70 years span the Establishment and have — so far — managed to control the narrative and convince Gulliver to remain docile. It won’t take as much as some people assume to break free and do amazing things for the people who AREN’T locked into the Hydrocarbon Era’s wealth and power distribution.
“Im done with Democrats like Clinton and Sanders too. Its hard to take them or anyone seriously on dealing with Climate Change when HUGE environmental assets like this are closed down with little consideration.”
Then where are the Republucans fighting to oppose the closures? On this campaign cycle, do you see Sanders or Clinton saying “no nuclear”? Its ALL about partisan politics for you, isn’t it?
I doubt the closures would happen under Republicans POA. There wouldn’t be such unrealistic incentives for renewables. The nuclear fear closure and cleanup industry certainly wouldn’t be such a force.
Sanders and Clinton say what is along party lines. Sanders wants to ban all fracking, and I am very critical of improper fracking, but that is just ludicrous.
And yes it is all politics. Ive seen enough to confirm that. Even the its “Bush’s Fault” Rod sheepishly threw out up there really fell flat with me. Obama has been terrible as a nuclear advocate.
*sigh* … Well, it seems that someone has never bothered to read Sanders’s campaign platform. What’s really sad is that this person considers himself to be the self-appointed expert and lecturer on politics here. Clearly a Dunning-Kruger effect at work.
http://www.motherjones.com/environment/2016/04/grist-bernie-sanders-wants-to-phase-out-nuclear-power-plants
@Rod: What is stopping Exelon from adding more transmission capacity to move the power to more lucrative regions?
If I remember correctly, 345 kV Transmission lines, right of ways, and construction were $1,000,000 per mile back in the 1980s. If you’re bleeding hundreds of millions now, it may be considered somewhat unwise to go for numbers in excess of a billion. These aren’t exactly plug and play like windmills. When the Mw’s have zeroes behind them, so do the transmission costs. These plants, like their associated grid interties, are large capital infrastructure.
>What is stopping Exelon from adding more transmission capacity to move the power to more lucrative regions?
For Clinton, that’s MISO/AMEREN territory. Clinton does not own or operate it’s own switchyard! Transmission reforms have been proposed for supporting Clinton but it wasn’t selected as an option.
Due to the deregulated nature of Illinois, transmission line funding/construction has to go through the Illinois commission. It’s supposed to involve all sorts of analysis including cost, and you have to pick the ‘best’ of the options available for the grid, not for a particular plant.
There was talk of getting new transmission for Clinton. But instead, what actually is getting put in, is a transmission line across the middle of the state that brings more Iowa wind energy in, which is one of the things suppressing MISO zone 4 pricing and hurting Clinton.
Michael,
Back in the 80s and 90s when I worked there – Illinois Power owned both the plant and the switchyard.
You’re correct in geographic market conditions being the challenge.
There are profitable $28 / Mwe plants in the regulated regions of the US aspiring to ambitious $21 / Mwe levels – that are still priced out of the market you’re in.
Right now, none of my operators can go into the Relay house in the switchyard without an Ameren escort. And for a while we were actually locked out of the switchyard itself without an escort. We recently got that back and are working on relay house access.
April 9th 1996, we had a Breaker Failure Lockout triggered by 4538 – single phase testing. Closure required pulling the relay 4538BF in the Relay House. Still had power from the ERAT that time. Not a full LOSP.
In my opinion, you should have access to Offsite Power Sources Required by TS Section 3.8. Otherwise, how can you “Immediately take actions to restore …” ?
Maybe “take actions” has withered to “call Ameren”.
I’m just getting old, I guess.
I had thoughts about that situation a few months ago. Know of several plants where I thought the substation was owned separately and wondered how the NRC could have power over them, but never looked into it.
With improved tech specs, it no longer says to immediately take action. It’s just a “Restore in 72 hours” action for single offsite circuit INOPERABLE.
As for 4538, that was the pole disagree that left us hot on RCIC/SRVs for 3 days and ate up 60-70% of the design life on the RCIC spray nozzle and likely caused some of the steam dryer cracks we have. Frank Armetta was telling me he was in the service building basement at the time, and every time an SRV popped, it rumbled his desk.
Believe it or not, we haven’t had to lift an SRV in almost 15 years. And I don’t think we’ve had to inject RCIC in almost as long.
What are the gas replacement numbers here ? Increased CO2 ? Local Electricity bill increases ? Local jobs lost. Those should be first on people’s minds.
My concerns also. How much will NG prices go up when the 20 plants on the fence shut down? How much will CO2 emissions increase? How many manufacturing companies leave Illinois?
How many Wind Turbines are needed to provide eight billion kilowatts per year? Reliably and without brownouts/blackouts.
I am not sure if these programs are still around, but people used to (perhaps still do) pay more for being exclusively powered by “wind” (where they pay more on their bill so that, somewhere on the grid, a wind turbine’s output would be paid for by rate payers). I believe some utilities even had a special box to check on the electric bill that would increase the bill by some amount in order to accomplish this. Why not do this with nuclear power? I bet the cost difference on the total electric bill would not be that much anyway. This effort, combined with a effective marketing campaign, might save plants like these.
Folks, the climate change meme is merely a cover for the same old Leftist/Totalitarian/People Control crowd.
Yes, CO2 does contribute to some rise in global temperatures, all things being equal. But the magnitude the warmists are claiming is exaggerated.
Are we really supposed to believe that they understand the dynamics of climate but are so stupid as to believe that renewables can sustain a modern civilization?
It’s just another tool of people control.
The people that push this are the same ones that think it’s great that Europe and the US are being overrun with third world hordes, that are fine with wars in the middle east and are always pushing the latest social justice fad.
@FermiAged
John D. Rockefeller, III and his brother Laurence were major funders of what you call “Leftist/Totalitarian/People Control crowd.”
Pretty odd considering that they were part of a six children family.
As Leona Helmsley remarked, “Taxes are for the little people.”
Don’t confuse diagnosis of the problem by climatologists with the solutions pushed by anti-nuclear greens. Climatology is not anti-nuclear.
There really is no doubt about the physics of global warming, or that the current rush to gas will increase it.
If you watch Kurosawa’s movie “Dreams”, you will see an episode called “Village with the Watermills” which shows the world the greens want to live in. It has no relation to the reality of 21st century cities and their demand for large amounts of reliable power, or global trade and transport.
Mr. Adams, the Rockefellers are the Elite , People Control does not apply to them.
@Donald Ernst
I am fully aware of the fact that they consider themselves to be above the rest of us. Their perception isn’t reality.
Their heredity included a skilled entrepreneur/monopolist, but HIS father was a flimflam man who sold patent medicines and maintained two wives in two different cities.
In other words, they were just humans. Some may have had above average intelligence others no so much.
“I am fully aware of the fact that they consider themselves to be above the rest of us. Their perception isn’t reality”
Also true of those, above, that stereotype those of us on the left. Or, on the right, for that matter.
Sounds like the vaunted “Nuclear Renaissance” has become the Nuclear Wake. Its going to take a change in national policy to save this business. If the government won’t step in and operate these plants in the name of national energy security, its going to be nothing but a death spiral. Companies are going to be racing each other to see who can get out of the nuclear business fastest. As John Tuld said, if you’re first out the door, it’s not called panicking. I dislike government intervention as much as anybody, and I hate to see it come to that, but I really don’t see a way out. This isn’t a bailout of GM or banks or anything like that, this is the lifeblood of society we’re talking about (reliable, affordable electricity).
Once again, apologies for being off topic but not sure where to place this recent “Science Magazine” article where Frank von Hippel is again at the center:
http://www.sciencemag.org/news/2016/05/spent-fuel-fire-us-soil-could-dwarf-impact-fukushima
You can check back through the various articles published here and elsewhere to find fairly thorough debunkings of the “spent fuel fire” FUD. This isn’t my forum, but as a reader and contributor (on occasion), IMO I don’t think we need to rehash those. There is plenty of information out there in the public domain, including videos of why ignition of the zirconium cladding, much less damage to the fuel pellets, isn’t likely to occur in any realistic or even marginally unrealistic scenario.
There is plenty of information out there in the public domain, including videos of why ignition of the zirconium cladding,
Totally right but unless, like antis do, that kind of info is pushed into the voting public’s nose to see it and allay fears and kill FUD, the truth might as well be in the closet.
An overall profitable company can still have money losing operations.
That doesn’t mean they continue the money losing operations.
Either reward all forms of CO2 free forms of generation or reward none. That’s the issue. Not how evil Exelon is for not continuing a money losing operation.
@Jim Doyle
Partly agree. Exelon was at least honest enough to be pointing to wind subsidies and to be fighting last minute extension (for about the 10th time) of the tax credits started as a temporary measure in 1992.
Few power producers joined that effort.
My electric bills have gone up over the last couple years. This despite the fact that I live in PA with all of the cheap natural gas.
The power market is pretty skewed on a number of issues.
Wind/solar subsidies and the incentive to provide peaking units at the expense of base load units.
It all means more expensive bills.
Your bills are going to increase. TAXES, PROPERTY TAXES, ELECTRICITY BILLS. AND SERVICES WITHIN YOUR COUNTY. IT DOESN’T TAKE A MBA TO FIGURE THIS OUT!
Electricity bills have gone up 40% nationwide in the last ten years as the result of deregulation – the repeal of the Public Utility Holding Act – by George Bush and friends in 2005 (see below).
Utilities now buy natural gas from themselves, then bill captive ratepayers for it at their own inflated prices. It used to be called extortion.
Hi Rod.
I’m an SRO at Clinton.
There is a LOT that is affecting Clinton leading to this. MISO zone 4 in southern Illinois is a mess right now. It’s surrounded primarily by regulated assets, and wind assets from other states that are getting federal and state subsidies. These regulated and subsidized assets are bidding in to the MISO capacity auctions at $0/MWd and are causing lower power prices in zone 4.
For Clinton specifically, the Kincaid plant and Clinton tend to run into transmission congestion with each other. Clinton has three transmission lines, Brokaw (Bloomington), Rising/Goose Creek (goes towards Champaign), and Latham/Oreana (goes towards Kincaid and Decatur). These areas are all basically same or negative load growth. Bloomington in particular, losing the Mitsubishi plant and other business loss, but really all areas. Also, if you drive up Illinois-47, or I57/55, all you see is wind turbines, everywhere. There’s a lot of congestion, and it drives prices down in the local markets, but it doesn’t drive them negative! If they went negative, Clinton could participate in economic dispatch like Quad/Byron and lower output to return prices to a profitable range, but instead, prices tend to sit positive in the 10-20 dollars/MWh range, which is well below where Clinton needs to be.
There are so many factors that are issues, and big picture closing these units helps Exelon and hurts Illinois. For Exelon, they get to cut the losses, which raises profits, on top of helping to raise power prices for the other units. For the state of Illinois, at least in MISO/zone 4, I think what’s going to happen is that region will lose most of its baseload units and will be importing power, so state of Illinois money will leave and go to Iowa and other locations. On top of it all, the Clean power plan set Illinois’ carbon reduction based on all nukes operating, so losing any nuke will result in an increase in emissions. The state did a study a couple years ago and determined that the costs of losing Quad and Clinton would be far far greater than providing even a modest subsidy.
I’m rambling a bit. It’s late, I just got off shift, and even though the company has been very forthright and transparent with employees and we all knew this was coming, today was still a bit of a weird day. For many at Clinton, they’ve heard the closure threats since the plant went online, and I know many who even had pink slips back in the 90s during the extended 2.5 year shutdown because the plant was going to close before it eventually made its way to Unicom/Exleon. Those people all believed we would make it through, and now it’s hitting them hard. The company is really pushing wanting to keep everyone in the Exelon fold, even if it means going to one of the gas plants Exelon is building, going to transmission, going out east. etc. We will see how it goes.
No matter what you think about Exelon, or the state of Illinois, or whatever, this is a shame for carbon emissions/clean energy, it’s a shame for good high paying jobs, it’s a shame for the towns around Clinton and Quad Cities and their school districts and property taxes, and it’s a shame for the nuclear industry in general. It’s upsetting to me that Rauner makes statements that there needs to be balance between keeping Exelon jobs in state and protecting the rate payers, because the Illinois study showed that the cheapest thing for the ratepayers is to provide support for Clinton and Quad. It’s also a shame that the shareholders are getting impatient with Crane. At the Exelon Nuclear level, the executives there have been pretty adamant about not losing Clinton. Most of them worked at Clinton at some point in time, and it’s one of the best run sites in the country and is usually among the top 1 or 2 Exelon plants in indicators. Clinton just came off of a world record 11 day refuel, with the world record for lowest BWR dose, no OSHA events, no clearance or config control or HU performance events. Clinton also has never had a fuel element leak/rupture/failure in its entire operation. It’s really a great site to work for, and the only fault with the plant is where they happened to pour the concrete.
It does not take a genius to understand the real reason nuclear energy is not included in President Obama’s CO2 reduction, Renewable Energy Plan, and the rebates/subsidies given to “Renewables” only.
Thanks for your insightful comments and all the best yo you in the future.
Rod, Chris Crane is right – legislators are to blame, but not for the reasons he cites. What legislators have done is put corporations in a position of protecting the environment, a scenario which, in historical context, has proven consistently disastrous.
Nuclear is a victim of illegal business opportunities made legal by the demise of FDR’s now-defunct Public Utility Holding Company Act (PUHCA) of 1935. It was enacted specifically to eliminate double dealings by energy holding companies, which in the 1920s bought natural gas from their own subsidiaries after marking up the price – then billed ratepayers at the jacked-up price.
Section 9 of PUHCA was called the “watchdog provision”. it required any acquisition of 5% or more of the voting shares of a public utility company to be subject to SEC review under section 11. After 1935, the SEC could not only break up the big interstate holding companies (which was done with a few exceptions by about 1945), but prevent them from forming new ones.
Now, Exelon is only doing what corporations do best – making money for its shareholders – in a stratagem legalized by George W. Bush and his fossil fuel allies when they repealed PUHCA in 2005. A holding company formed by the merger of PECO Energy Company and Unicom in 2000, Exelon Corporation has merged with Constellation Energy Group and Pepco Holdings, Inc. to become the largest electricity conglomerate in the U.S., with $34.5 billion in revenue and 34,000 employees. Exelon has eight subsidiaries – what holding companies “hold” – and two are deregulated: Exelon Generation, an “energy generator”, and Constellation, a “competitive energy supplier”. Exelon’s six regulated utilities buy natural gas from their deregulated suppliers, then bill the public for it.
What could possibly go wrong?
In 2004 Lynn Hargis, a former FERC attorney and utility industry veteran, warned in prepared testimony to the SEC that
It was repealed anyway, catastrophe unfolding. Though Bernie Sanders has vowed allow nuclear licenses to expire at the end of their current terms, his language on the issue has softened lately, and he’s the only presidential candidate willing to take on energy holding companies. Unless PUHCA is reinstated, nuclear is doomed anyway.
How dare you blame the Bush administration for anything. He left perfect conditions to the Obama Administration. The middle east was stabilized. Al Qaeda was defeated. Afganistan was rid of the Taliban. Iraq was paying us for our assistance by giving us its oil, and Sadams nuclear arsenal had been found and dismantled. All Americans were working. Our economy was robust and blossoming. Our national debt was a mere pittance. Dick Cheney had a new pacemaker, and all traces of the coccaine on Dubya’s right nostril had all been washed away by his heroic declaration of great success on our war on terror. And once and for all, we put his missing periods of military service to rest, by proclaiming he was where he wasn’t when he wasn’t there.
Yes, its all Obama’s fault.
It wasn’t all Obama’s fault, and it wasn’t all Bush’s fault. From 1997-2000, “PG&E Corporation”, the holding company of “Pacific Gas & Electric” (the utility), drained $5 billion from the utility’s coffers when it was $6.6 billion in debt – nearly driving it to bankruptcy.
That and other exploits happened under Hillary’s husband’s watch, demonstrating that exploitation of the public by deregulated monopolies is a genuinely bi-partisan endeavor. We need to re-instate PUHCA, but it will likely take a third party candidate to do it.
Meanwhile, Exelon will be opening two 1000 MWe greenhouse gas polluting– natural gas– power plants in Texas in 2017.
http://www.energymanagertoday.com/exelon-breaks-ground-1000-mw-natural-gas-plant-texas-0113721/
The solution to this problem is simple, IMO.
It has to be Federally mandated that at least 50% of all the electricity (kwh) produced by a utility within the US must be carbon neutral (nuclear, hydroelectric, wind, solar, etc.) by 2020 and at least 90% by 2030.
This would provide a strong incentive for US utilities to keep current nuclear power plants open and for other utilities to try to purchase existing nuclear facilities or to purchase and reopen recently closed facilities.
A 100% sin tax would be placed on all carbon polluting electricity (coal, natural gas, etc.) produced by US utilities that fail to meet the Federal standards.
Marcel
It’s simply not possible for most US utilities to go 50% carbon neutral by 2020. Worse, pushing wind and PV to meet the target would mostly drive up costs by aggravating the inefficiency of the fossil side.
Currently, about 30% of the electricity produced in the US is carbon neutral.
But there are some US utilities already exceeding the 50% carbon neutral electricity production level.
So maybe 50% by 2030 and 90% by 2040 would be more practical targets.
But you clearly can’t reduce greenhouse gas emissions by closing down nuclear power plants while building more fossil fuel power plants. So there has to be a long term incentive for utilities to invest in the construction of substantially more carbon neutral power plants.
And the fastest way to do that is by building a lot more nuclear reactors at existing nuclear sites.
Marcel
If you think the equivalent of the current US reactor fleet can be built before 2020, you’re plainly nuts.
And I’ll bet that every one that isn’t dependent on other utilities for the bulk of their generation is doing it with nuclear and hydro.
You’re taking the electric problem in isolation. That’s not going to fix the problem with fuel consumption for space heat and DHW, much of which burns FF directly.
Any real GHG solution has to deal with space heat, DHW and industrial process heat, and transportation IN ADDITION TO electricity. Ideally, this would be a multiple birds/one stone thing. Light-duty vehicles are relatively easily electrified for a great deal of their mileage (PHEV) so long as generation can handle their demand curve. Electric heat pumps are not a solution for space heat because peak electric demands go too high. One option is to put SMRs like NuScales inside cities, where spent steam or hot condenser cooling water can be used for heat and to supply DHW. This decarbonizes electric demand, gets rid of much if not all of the FF for low-grade heat, and at the least supplies off-peak generation for PEVs.
@E-P
Am I correct in interpreting DHW as domestic hot water?
Yup. (Apparently I need to add a pile of verbiage to that to get the reply to post.)
“If you think the equivalent of the current US reactor fleet can be built before 2020, you’re plainly nuts.”
If you added just two reactors (2GWe) to every existing nuclear site in the US, you could do it by the early 2020s. Politically, however, it probably couldn’t be done before 2030.
“You’re taking the electric problem in isolation. That’s not going to fix the problem with fuel consumption for space heat and DHW, much of which burns FF directly.”
There are already electric space heaters and water heaters so you don’t need nuclear waste heat in order to replace fossil fuel water heaters and space heaters.
Electricity production in the US only comprises about 40% of total energy use in the US. In order to replace liquid transportation fuels and industrial chemicals produced by the fossil fuel industry, the US is probably going to have to build more than 1000 1GWe Ocean Nuclear power plants for the production of carbon neutral synfuels (methanol, gasoline, diesel fuel, jet fuel, etc.) and industrial chemicals (ammonia, urea, formaldehyde, etc.)
http://newpapyrusmagazine.blogspot.com/2016/02/will-russia-and-china-dominate-ocean.html
http://newpapyrusmagazine.blogspot.com/2014/01/the-future-of-ocean-nuclear-synfuel.html
@Marcel F. Williams
If you added just two reactors (2GWe) to every existing nuclear site in the US, you could do it by the early 2020s. Politically, however, it probably couldn’t be done before 2030.
Since we are already half way through 2016, there are only 3.5 years between now and 2020. Not every reactor site in the US has the physical space, cooling water resources and transmission infrastructure expansion capacity to add 2 GWe. Only a handful already have permission in the form of an early site permit (ESP) to add new units. The existing process for getting permission to add more units thus requires about 5-7 years if begun without an ESP but using one of the three certified designs that are being actively marketed today (ABWR, AP1000 and ESBWR)
Construction completion, especially if begun promptly after getting the combined license (COL), should be possible about 5 years after completing the COL. Thus, a group of reactors begun today could be completed before 2030. The multibillion dollar question is the size of the group and the phasing that would be required to maximize the probability of timely, cost effective completion.
If too many tried to start at one time, we would be repeating the errors of the Great Bandwagon Market.
I’m of the opinion that a prompt, sustainable building program should be started and should be coordinated with something approaching the way that we built the Eisenhower Interstate Highway system. That multi-decade project completely reshaped our transportation infrastructure and has influenced the life of nearly every American citizen; it is a much better model of the kind of effort required than the Manhattan Project or the Moonshot.
I’m coming around to the idea of short-haul EVs for displacement of fossil fuel use. I commuted for years to a job that was maybe 20 miles roundtrip. I guess an EV could handle that. Most people would still want the perceived freedom of having a long-haul vehicle available.
Long-haul freight (not people) I guess could be handled by electrified trains, assuming power could be delivered and used by locomotives that could handle such hauls.
That leaves aviation as the most intractable problem. Not sure anything on the electric side can replace Jet-A. And I don’t think it is practical to do away with the aviation business. Going back to trains for long-haul people moving is kind of a 19th century lifestyle that would be a hard sell in today’s fast-paced world.
Just thinking about some of the issues in electrifying the transport sector, which for some reason I have always thought of being the most difficult side of the fossil fuel problem use to solve. Stationary power systems are a relatively straightforward problem, if you want to take the brute force approach and just bludgeon it with high-density energy sources (which is simplest). Moving people around, well, I don’t think the European model of high density cities with electrified public transit is going to work in a geographically dispersed country with a history of individual freedom of movement and mobility.
@Wayne SW
Going back to trains for long-haul people moving is kind of a 19th century lifestyle that would be a hard sell in today’s fast-paced world.
I’m not so sure. First of all, today’s jet travel for the 99+% of us that do not have a private jet at our disposal is not all that fast. There is a heavy burden of overhead associated with parking, getting to the terminal, waiting in security lines (or allowing for the potential to wait in security lines) and dealing with luggage one way or another.
I’m lucky enough to live in a small town with a deep railroad history. It has a beautiful, recently remodeled train station and a convenient regional train run that leaves every morning. It can get me to almost any downtown location between here and Boston more quickly, comfortably and cheaply than flying from the local regional airport.
For the individual freedom of movement that you mention, nothing beats an automobile plus the Interstate highway system.
@Rod Adams
Yes, the long-haul personal travel will require fossil fuel so I’m not sure we’ll get entirely away from that. Same with the hassles of air travel you mentioned. I generally don’t travel by air as much as I used to, but there were some trips I just had to make, S. Korea for business on occasion, attending my brother’s funeral in Oregon on short notice, business-pleasure trip to Hawaii, overnight shipment of instrumentation to a job site for emergency repairs, etc. But along with that were person-years of short trips that might have been served by an EV. Certain regions have developed reasonably good infrastructure in rail travel as a result of historical trends such as the Northeast Corridor. In the NYC area, you also have to use it, since personal automobile use has such a burden of overhead. Likewise in DC. I’ve heard Gov. Brown wants to do likewise in the SF-LA corridor. We’ll see how that works out, but it looks pretty pricey right now.
And if a bullfrog had wings he wouldn’t bump his behind when he croaked.
It couldn’t be done logistically with anything built to date. There aren’t the forges or skilled workers. There isn’t the supply chain.
That leaves out things not yet built. The NuScale design lends itself to much shorter schedules. 2 NuScales per day 250 days a year = 500 units/year = 23.75 GW(e) net per year. That matches current US nuclear output in 5 years and fully replaces most base-load generation in 15.
You think that a base-load to mid-load technology matches up with extremely peaky resistance heat? Please. No sane person can take that seriously.
A NuScale is rated at 47.5 MW(e) net, 160 MW(t). That’s about 110 MW of waste heat, or the equivalent of 3750 therms of natural gas every hour. That heat is a byproduct of electric generation; it’s “free”. To get the same output from electric resistance heat, you would need to build more than 3x the reactors.
Nuclear waste heat can replace vast amounts of fossil fuel. That annual 23.75 GW of electric additions would produce 55 GW of heat, 188 billion BTU/hr, 1.48 quadrillion BTU/yr at 90% capacity factor. Total residential and commercial consumption of natural gas in 2013 was about 8.3 quads. Assuming that 70% of the thermal output must be dumped because of lack of demand, you get all the gas displaced by nuclear in 18 years.
It’s obvious that you’ve never used a calculator on this stuff. I wonder if you even can.
Re-read this comment VERY closely.
That is a presentation designed to kill the concept by making any solution appear absurdly grandiose and unachieveable. Total electrification of ground transport in the USA would take about 180 GW. 1 TW is a ridiculous number, and was intended to be.
I used to drive a car that got 22 MPG average. Today I drive a PHEV which is pushing 140 MPG average; I cut more than 80% of my liquid fuel consumption by getting a car with a relatively small traction battery. Between nuclear electricity and biofuels, most people’s driving could be almost completely decarbonized.
This is very doable. It’s just not doable in the ways proposed by the people who don’t want it done.
@E-P
Great comment. Are you trying to imitate a “cranky wise man” with the following?
“It’s obvious that you’ve never used a calculator on this stuff. I wonder if you even can.”
You mis-spelled “curmudgeon”.
@E-P
Nope. I just used words I knew how to spell. 🙂
Remind me again, who majored in English and who in engineering? Were we swapped at graduation or something?
@E-P
My excuse is that most of the writing I did after graduation was for engineers and sailors. I had 30 years to allow my ability to spell long words rust away. Besides, I’ve always been a Hemingway fan.
I guess I’m the engineer after all; I managed to say with 3 syllables what any old guy says with 4. 😉
@Engineer-Poet
What are you driving these days? I have an order in for a 2017 Volt. Looking forward to cutting back on how much money I send to those who are not particularly friendly.
2013 Ford Fusion Energi. I’ve burned a bit less than 11 quarts of gas from the tank I filled 3400+ miles ago. Not doing too bad.
Those timelines are way too fast. That’s like me saying I’m going to lose 25 pounds by tomorrow. Short of cutting off an appendage, that isn’t happening.
Theres a few here whose heads weigh three times that amount.
And there are some that are so fixated on other posters that they cant make a relevant argument no matter the circumstances.
Do you even have an opinion on the closings? If so what.
poa’s entire purpose here is to exhibit his own personality flaws.
Yes, I do. I think that those of you that are the most fun to mess with are also the most culpable in NE’S fall from favor. An unlikable and abrasive bunch, who the more astute thinkers amongst you shoulda shushed along time ago.
Getting away from personalities, though, how’s it feel knowing you and your compatriots have done such a MISERABLE job of engaing and besting your adversaries? For all your sputter, bluster, and science, plants are closing left and right.
Yet you geniuses have all the answers. Doncha Tucker? Brian?? How’s your way workin’ out for ya? Yeah, you two are real mensas, arencha?
“poa’s entire purpose here is to exhibit his own personality flaws.”
Note that I wasn’t even engaged with this obnoxious hypocrite when he chimed in. Yet on another thread he is whining about me singling him out. Utterly incapable of looking inwards, this one.
This is awful news. It appears the EPA “clean power plan” is working exactly as its authors from the NRDC and their gas industry sponsors intended.
Contrast this with Hansen’s fee and dividend plan:
If the fee begins at US$15/tCO2 and rises $10 per year, the rate after 10 years would be equivalent to about US$1 per gallon of gasoline.
A carbon fee of $115/tCO2 would push the price of coal fired electricity by $115/MWh and that of gas fired electricity by $50/MWh. It would also massively encourage fuel switching from coal to gas, increasing the price of gas.
This would turn the plants the Exelon is closing into $billion per year cash cows.
Illinois has about 45% nuclear, 45% coal, neighbouring Indiana 85% coal. Exelon has 60% nuclear, 20% gas, 0% coal.
They should be lobbying for fee and dividend, and not some obscure and unpopular lex exelon.
The fact that Exelon decide to close plants show that they see the chances that fee and dividend or any other meaningful measures to bring down CO2 emissions ar introduced as near zero.