Exelon threatens to close two nuke plants

Threat to 3,500 jobs in Bryron, Morris seen as attempt to squeeze concessions from legislators, Pritzker

The Byron nuclear power plant doesn’t produce carbon emissions, but its Exelon ownership says it can’t compete with sweetheart deals granted the fossil-fuel industry. (Wikimedia Commons/Christopher Peterson)

By Ted Cox

Exelon is threatening to close two Illinois nuclear power plants unless it gains concessions from Gov. Pritzker and the General Assembly.

Exelon Generation announced Thursday in a formal business news release that it plans to close nuclear plants in Byron and Morris a year from now, next fall. According to the company, the plants supply power to 4 million homes and businesses, pay more than $60 million in taxes, and together employ 1,500 full-time employees and another 2,000 supplemental workers.

Yet the company cried poor, with the release stating that “despite being among the most efficient and reliable units in the nation’s nuclear fleet, Dresden (in Morris) and Byron face revenue shortfalls in the hundreds of millions of dollars because of declining energy prices and market rules that allow fossil-fuel plants to underbid clean resources … even though there is broad public support for sustaining and expanding clean-energy resources to address the climate crisis.” It warned that reactors in LaSalle and Braidwood employing another 1,500 skilled workers “are also at high risk for premature closure.”

The Governor’s Office swiftly rebuffed those claims, with spokeswoman Jordan Abudayyeh issuing a statement saying, “First, let’s remember that Exelon already receives a ratepayer-funded subsidy of $235 million per year to run nuclear plants in Illinois. While they couch their messaging in their desire for a clean-energy future, their primary purpose is to dramatically increase those subsidies on behalf of their shareholders.”

Exelon claims it’s at a competitive disadvantage because the fossil-fuel industry has been granted the ability to artificially underbid them on energy markets. If indeed that’s a problem, it’s only gotten worse under President Trump. Supporters of the Clean Energy Jobs Act argued earlier this year that, if enacted, it would halt Trump administration sweetheart deals that constitute “a massive bailout of the fossil-fuel industry.”

It’s a thorny issue, however, made all the more thorny by the scrutiny Exelon and its ComEd subsidiary are under after agreeing to pay a $200 million fine this summer in a delayed-prosecution agreement with the U.S. Justice Department over a bribery scheme in the General Assembly involving rate increases and sweetheart deals of their own.

Exelon is pressing for the General Assembly and the governor to alter the rules to put nuclear energy on even footing with coal and natural-gas plants. It also no doubt wouldn’t mind subsidies of the sort granted its nuclear plants in Clinton and Cordova four years ago under former Gov. Rauner that kept those reactors open.

Abudayyeh pointed to how the company made the same threats to close those plants before being granted the subsidies. “We have seen these threats before,” she said, “and this time Exelon’s threats will need to be backed up by a thorough and transparent review of their finances — including why the profits of the company as a whole cannot cover alleged operating losses at a few plants.”

Gov. Pritkzer is dubious about Exelon’s claims that financial hardship will force it to close two Illinois nuclear plants. (Illinois.gov)

The Clean Energy Jobs Act does grant support to nuclear energy as a bridge to a 100 percent renewable power system. In the General Assembly, lead sponsor Sen. Cristina Castro argued just this week that was necessary to close down fossil-fuel plants on the way to 100 percent renewable, and earlier this year Rep. Ann Williams, lead sponsor in the House, said, “Nuclear energy is not what I would pick, ideally, but it’s definitely a bridge we need. It does not emit carbon. And it’s a bridge we need to get us to 100 percent renewables — which is exactly what CEJA contemplates.”

The fossil-fuel industry has countered with its own arguments against granting “bailouts” to ComEd and Exelon — especially with the ongoing bribery investigation. Even CEJA supporter Andrew Barbeau, of the Clean Energy Jobs Coalition, recently argued that the bill would stand against utility “bailouts,” such as extra funding for Exelon’s nuclear plants in Illinois, saying, “Exelon is a highly profitable company that shouldn’t be asking taxpayers to keep their operations going.”

“The governor has been clear that establishing a program to reward clean-energy sources and phase out dirty energy is a critical part of any comprehensive energy framework, but that framework needs to be developed based on a transparent understanding of the economics involved with the nuclear plants,” Abudayyeh said. “Any financial benefit to the nuclear plants must be right-sized and protect Illinois ratepayers.” She echoed the governor’s firm position that “transitioning to a clean renewable energy economy is a top priority for his administration, but the utility companies will not write the legislation to get the state there.”

Williams chimed in, issuing a statement saying: “The profits of Exelon, fossil-fuel companies, and any other business interests should not and will not dictate energy policy in Springfield any longer; we need to move forward with a comprehensive energy bill that will focus on the needs of consumers, communities, and climate. I look forward to working with the Governor's Office and my colleagues in the House and Senate toward that end.”

Exelon President Christopher Crane cried crocodile tears in a statement issued Thursday, saying: “Although we know in our heads that shutting down the uneconomic Illinois plants is necessary to preserve even more jobs elsewhere, our hearts ache today for the thousands of talented women and men that have served Illinois families for more than a generation and will lose their jobs because of poorly conceived energy policies. But we are only about a year away from shutdown and we need to give our people, the host communities, and regulators time to prepare.”

Lobbying at the same time for concessions, he claimed the company has “opened our books to policymakers and will continue to do so for any lawmaker who wishes to judge the plants’ profitability.”

He then praised Pritzker’s recent adoption of eight key principles on the shift to a clean-energy economy, adding, “We agree with Gov. Pritzker that policy reform is urgently needed to address the climate crisis and advance Illinois’s clean-energy economy, and we support the objectives of the governor’s recent energy principles. That’s separate from today’s announcement to retire these two zero-carbon nuclear plants, which was not a decision made lightly and is one that has been in the works for some time.”

According to the Chicago Sun-Times, which labeled the announcement a “power play,” the Byron plant, southwest of Rockford, went online in the mid-’80s and is licensed through 2046, while the Dresden plant in Morris in central Illinois launched in 1970 and is licensed through 2031.