Update: One-woman crusade to save Zion nuclear power station heads to court
It has been several months since I last reported on the efforts of Nancy Thorner, the Illinois resident who has been working diligently for several years to encourage Exelon to reconsider its 1998 decision to shut down the 22 year old (at the time) Zion nuclear power station. You can find links to previous articles about this situation below, but the basic story is as follows:
In the mid 1990s, Commonwealth Edison, the monopoly electric utility that built and operated many of the nuclear plants that are now owned and operated by Exelon as a merchant plant operator, was having difficulty managing and maintaining its nuclear plants. They were achieving low capacity factors, appearing on Nuclear Regulatory Commission watch lists, and suffering from power struggles between labor unions and management.
Zion, like many of the other Commonwealth Edison units, had issues that culminated in a group of operators resisting management orders and taking off their shirts in the control room. There were some other complicating circumstances, but the bottom line was that the company shut down both units of the plant and decided to keep them shut down. The decision allowed the company to fire or reassign the recalcitrant union members and to establish a more powerful position over the behavior of employees. At the time, replacement power was cheap since natural gas was selling for less than $2.00 per million BTU and since the midwest was shedding much of its manufacturing base, reducing the overall electricity demand.
Nancy became interested in the situation several years ago after hearing a talk given by David Hollein, a key member of the Westinghouse technical support team for Zion. David had already been campaigning for years to tell people that there was nothing technically wrong with the facility; it could be profitably operated with the same kind of management and operational attention that Oliver Kingsley brought to the rest of the Commonwealth Edison fleet soon after Zion was initially shut down.
Nancy’s efforts have been aimed at trying to convince Exelon that times have changed and that a 2,200 MWe emission-free nuclear power station that is already complete would be worth fixing up, even if it costs a couple of billion dollars to get the license restored. (TVA has already restored a long shutdown Browns Ferry to operation, has invested billions into completing the suspended Watts Bar II project and is now considering an effort to complete at least one of the units at the long suspended Bellefonte project site.)
Recently, Nancy has decided to take a new tack. She is a plaintiff in a lawsuit against ZionSolutions, the company that currently holds the possession only license for Zion. What Nancy and her attorney, Daniel Sponseller, have found is that there is currently no government agency (local, state or federal) that is watching the financial aspects of the decommissioning process or monitoring the decommissioning fund that was filled by charging electricity company ratepayers for the “stranded costs” that Exelon assumed when it took ownership of the nuclear plants that the ratepayers had purchased for Commonwealth Edison under the old monopoly utility construct.
After investigating the situation carefully, Nancy and the other plaintiffs to the suit developed significant concerns that the decommissioning fund will be completely drained, with no money left to return to ratepayers, even if the actual cost of the decommissioning is hundreds of millions less than initially estimated. She is concerned that the companies involved will simply inflate their bills, attribute unrelated expenses, and assert outsized profit margins that will combine to make the vanishing act seem legitimate.
On July 14, 2011, Dan Sponseller filed a lawsuit against ZionSolutions, the limited liability company set up by EnergySolutions to handle the Zion decommissioning project.
For several weeks after the lawsuit was filed, there was a complete silence in the news media. Perhaps that was partially caused by the fact that Exelon was not named in the suit; it no longer officially owns the Zion nuclear station. Instead, the corporation named in the suit was ZionSolutions, a limited liability company that did not exist before the project and will not exist after the project is completed.
There was no reporting from outlets that might be interested in the precedence that would be set regarding the proper handling and oversight of decommissioning funds for the rest of the nuclear power plant fleet. Even I dropped the ball and neglected to provide a timely update on the situation.
However, a couple of enterprising reporters have become intrigued by the implications of the story. The first one who broke the story was Jay Hancock of the Baltimore Sun. He became interested because Exelon recently made a bid to purchase Constellation Energy, the largest corporation with headquarters in Baltimore. Jay’s story appeared in the Sun’s August 6, 2011 edition with the headline of Customers protest fund switch by Constellation suitor Exelon.
Baltimore residents and political leaders are nervous about what might happen if the proposed sale of Constellation completed. The company and its predecessor, Baltimore Gas and Electric (BG&E), have been the source of important support for community activities and cultural organizations for decades. Jay’s article included some strong questioning of the situation, with quotes like the following:
Who’s protecting consumers’ interest in the trust fund now?
Not us, says the Illinois Commerce Commission.
“I don’t think we have any jurisdiction at all,” said ICC spokeswoman Beth Bosch. “All those plants were spun off to an Exelon affiliate” after deregulation, she added, which put them beyond the ICC’s reach. “And I don’t know that we’re even monitoring that case.”
Not us, says the Nuclear Regulatory Commission.
“From our standpoint, the fund is there to clean up the site and that is what is being done,” said NRC spokesman Scott Burnell. “When you start slicing up the pie and figuring out where the money goes, that starts to go outside our jurisdiction.”
Not us, says BNY Mellon, which became trustee for the decommissioning fund when EnergySolutions took over. The trust agreement says BNY has “no duty to inquire into the correctness or accuracy” of EnergySolutions’ requests for money from the fund.
Electricity deregulation in the late 1990s and early 2000s allowed valuable assets in many states to slip from the control of utility commissions into private hands.
As part of her campaign to save Zion, Nancy has developed good relations with local press outlets, so after Jay’s story appeared in the Baltimore Sun, she was able to get a lengthy commentary published in the Champion News titled ZionSolutions scrutinized for its handling of a trust fund to decommission the Zion Dual Nuclear Plant.
Jay Hancock’s investigation at the Baltimore Sun found that there is simply no one protecting the ratepayers’ statutory residual interests in the trust funds — all of which they paid over several years — which is one of the main reasons the lawsuit was brought.
The Baltimore Sun is a sister publication of the Chicago Tribune, yet it took the investigative skills of Baltimore Sun business reporter, Jay Hancock, to realize the story value of the lawsuit filed on July 14th questioning how the decommissioning fund is being handed by Zion Solutions.
Its mother paper, the Tribune, has never taken Chicago’s Exelon Corporation to task for its initial closing of the Zion Dual Nuclear Plant in 1998 and now the questionable handling of the decommissioning fund by ZionSolutions.
Other Chicago area newspapers have likewise been derelict in finding any fault or irregularities over the way The Zion Station was closed in 1998 and kept closed, for reasons never fully accounted for by Exelon Corporation, until Exelon handed the Dual Zion Nuclear Plant and its trust fund over to ZionSolution for decommissioning in September of 2011.
Though this will probably never be admitted by the big city newspaper, that column in Champion News seems to have had the effect of a wake up call for the Chicago Tribune. On Wednesday, August 10, 2011, the Tribune’s Julie Wernau picked up the story with her report titled Lawsuit filed over Zion plant decommissioning. Here is a quote from her article that describes the precedent-setting nature of the lawsuit:
The suit, filed in the U.S. District Court for the Northern District of Illinois by a group of local citizens, asks that a court-appointed third party manage the trust fund, which Commonwealth Edison customers paid into from 1998 to 2006.
“No qualified person or entity has been appointed to act as a trustee with respect to the trust funds to fully protect the rights of ComEd’s customers … or to review the withdrawals,” the suit asserts.
The case could be significant because determining how decommissioning costs are handled could set a precedent for other Illinois nuclear reactors that ultimately are mothballed. Each plant has a similar decommissioning fund that in total amounts to $4 billion—money paid by Illinois consumers.
In previous articles, I have described how Exelon determined that keeping the power that Zion could be suppling out of the “competitive” market was more valuable to the company than the revenue that the company would receive by selling the power. That slightly illogical construct works because limiting the available supply of electricity drives up the price at which the other 17 units in the Exelon fleet can sell their power. I have only recently begun to understand the scale of the money that is in play inside of the decommissioning funds and the lack of oversight regarding how those funds are expended in a “deregulated” market. Knowing a little about how invoices and payment systems work, it is easy to see the opportunity for some significant diversion of funds into the pockets of key individuals.
It will be interesting to see how the courts respond.
“The decision allowed the company to fire or reassign the recalcitrant union members and to establish a more powerful position over the behavior of employees.”
I have worked with union people all through my career. When the bell rings, they stop whatever they are doing no matter how important and walk out. Do you know what it’s like to have a union tech stall until the end of the day for a procedure change on a Reactor Protection surveillance test, knowing they’ll get time and a half overtime while you get zip point squat in fixing a mistake that they knew at day’s beginning existed? No, Rod, you don’t know what it’s like because you never worked in a commercial nuke plant with union techs. They are there at 7 pm at night drinking coffee and shooting the breeze while you’re tyring to get the 50.59 screen for procedure change throuigh review and approval, and they don’t give a crap. Their only sense is one of entitlement.
I remember at one nuke plant where the engineers went union. I was assigned to teach a one week course to them. At 3:30 pm, they dropped their pens and simply walked out of class. It didn’t matter that they took an hour lunch break like the management people in class did. It didn’t matter that there was homework they had to do to pass the test. The company owed them. That’s always been their philosophy. Governor Scott Walker of Wisconsin showed us how to defeat this godless laziness. And former President Reagan did the same to the air traffic controllers. But personal responsibility and accountability aren’t the virtues extolled by today’s liberals. Thus we have riots for sneakers and iPads in the UK. Liberal. Progressive. Democrat. That’s what shut Zion down. Two wolves and one sheep voting on what’s for dinner.
What an idiot. To strickly blame one side is simply rediculous. There are always two sides to every story. You should also take a look at how much paperwork needs to be done by maintenance every day. The amount of rules and regulations in place just to get work done. Between the regulators and IMPO, changes need to be made every day. Companies as well as Unions need to work together to achieve a common goal. To say Union people are Godless Lazy people is just showning how ignorant you are. And the ignorance of people like you is causing more hate and discontent than its worth.
One Goal and working together on both sides is the only way plants like Zion won’t get shutdown again!!!! GET A CLUE!!!!
I have worked/managed in both union and non-union shops throughout my career in aviation, and although there are some (albeit a minority) that will game the system in unionized places by in large these shops produced better product. The big reason, from a manager’s position, is that no one tried to cover-up mistakes in the union shops because they knew an error wouldn’t cost them their jobs.
On the other hand the worse two weeks of my life was the time a customer discovered that someone at the place I was working tried to hide a nick in a landing gear outer cylinder by filling it with automotive body putty and painting over it. A newer arrival to the country, he was afraid he would be fired if he reported it.
Nuclear is like aviation in that one must have a great deal of trust in the people that do the tasks, and despite the issues, I sill prefer to work in a union shop.
Ioannes – you continue to seek to demean and disrespect the work that I did in the navy merely because it was not in the commercial nuclear industry.
For your information, I have a fair amount of experience in working with unions in plant maintenance and repair. The sailors in my department were not union, but the shipyards and intermediate maintenance activities that support us certainly were (and still are).
I generally found that the union workers were exceptionally skilled and well-trained. I also appreciated the fact that they would follow rules and keep us all honest with regard to not pushing people to the limits of endurance – that is a recipe for error.
In the commercial world, unions are a good way to keep a balance between the pure money focus of people like John Rowe – an accountant who does not believe that nuclear is special at all – and the need to proceed carefully and methodically to ensure that we maintain reliable operations for a long period of time.
It never ceases to amaze me how the very wealthy in the US have managed to make a political alliance with working stiffs like you. Why are you opposed to hard-working people who are making decent wages, ensuring that they have time for family, and seeking to enforce rules that ensure that the fruits of their labor are not captured by the very few at the top? Is that really a conservative position? You say you are pro family, but your attitude belies that.
PS – I come from a family where more than half of the people in my parent’s generation were union members. They were some of the best people I knew.
Thanks Rod for bringing this issue to light.
This argument about the size of the decommissioning funds is one debating point the anti’s keep trying to use as another in their long line of reasons why nuclear is too expensive.
However, it appears there will be a sizable sum left over after decommissioning the plant in accordance with the rules and regs that will be left on the table as profit to the LLC in charge of the decom job as you report.
Therefore the entire line of argument from the anti’s about insufficient funds for decommissioning has no merit any longer.
What this means to me is that once again, the anti’s are not in this debate for the ratepayers. Instead their Anything But Nuclear googles are blinding them to the economic realities of nuclear power. When viewed from an entire system standpoint, not one or two data points, the nuclear industry means money stays in the hands of the average person for their use, not concentrating it in the bank accounts of commodity brokers.
If the fight for Zion is lost as inidcated by Mr. Rowe’s comments, the anti’s need to immediately start fighting for the consumer’s rights to get access to the money they paid into the decom fund. The decom firm is due a fair profit for the decommissioning activities but the remainder of the money should be returned to the ratepayers.
I have a suspicion though that the anti’s will not fight for the ratepayers. Instead I think they will try to get their hands on that money for their special pet efficiency, wind or solar project once they clue into the millions that will be available when the decom work is over. And they will still fight nuclear power even though their own pockets could be filled by that decom money during any legal fight that may occur. That is assuming the anti’s get their legal fees back similar to what is happening in VY where Exelon is having to pay for the professional anti’s fees. Hypocrisy at its worst.
Considering recent events in Germany, where the government proposed a tax on nuclear fuel that would go to support “renewable” projects, I think you might be right.
Brian,
FYI, the cash will be used for a transition to renewables by building coal plants.
I am not kidding. I guess she was drinking after all when she made the decision!
Daniel – I realize that you are not kidding. In fact, I recall reading recently that money collected for building a renewable infrastructure in Germany was being spent to build new coal plants.
And one day Brian, you will have to explain why solar energy is classified as renewable and not nuclear.
Cos when I do my math, the sun will stop from shining well before we run out of Uranium of this planet.
This is one positioning that the pro nukes never have attempted.
The gambit to the decommissioning funds that is incumbent only to nuclear is a carbon tax for all thermal plants.
It will act as an equalizer and give visibility to the entire cost structure across the industry.
Not speaking as an American, but an Australian, where we seem to have a far healthier workplace culture with mutual respect, I would far prefer my nuclear power station to employees to be part of a union. Unions have been responsible for basically all workplace safety improvements made in the past 150 years.
In the paradox of the anti nuclear democrats and pro nuclear republicans, let me offer you something quite interesting.
The democrats are much lore likely to impose a carbon tax than the GOP because of ideology. Yet, that ‘gambit’ would benefit nuclear more than anything else that the Bush republicans could have done in their 8 years of power.
I see that move on the energy board sooner than you think. This will come and haunt the True Green Democrats that want to fight climate change but are anti nuclear at the same time.
That’s what a call a gambit. It’s not obvious in chess and equally true in life.
Daniel,
the Greens in Germany already found a surprising solution for your paradox: they propose a carbon tax as well as treating nuclear as if it was coal with a – as they call it – “CO2 equivalence factor”.
Never underestimate the creativity of a True Green. They have a unique advantage compared to other parties in that their voters are as immune to sanity and logic as they are.
I hope Nancy Thorner is also armed with the excellent comments here regarding the rare accident/mortality rates incurred by nuclear plants since their conception. The idea that the worst case nature-caused incident killed none and had far less pernious health effects than chlorine escaping a derailed tanker car (far too common industrial occurances!) are figures laypeople can relate with and which anti-nuclear critics hate and want to hide!
James Greenidge
Rod. Great, wonderful post!
Does anybody know whether Zion was in “SafStor”? And how many workers were needed while it was mothballed?
Shumlin recently said that shutting down Vermont Yankee would not cost jobs because so many people would be on-site to run the equipment for several years and then “practically a public works project” (lots of people) to actually decommission. Shumlin is wrong, of course, but I would like to be able to prove it.
My hat is off to Nancy Thorner, who is proving that one person can make a big difference!
What Shumlin and other anti-nooks fail to understand about D&D work is that it is the ultimate “dead end” job. You work for a few years, and literally work yourself out of a job. And those are by and large low-quality jobs, basically nuclear janitors, pushing brooms and mops and doing surveys. When the job is done, where do you go? On the unemployment line, of course. Unless you want to become a wandering nomad, going from plant to plant, burying the life work of others. To that, I say, no thanks, I’ll take early retirement before I tear down the work of others.