Nuclear Power - A History of Bailouts
It wasn’t that long ago that Pennsylvania policymakers proclaimed that the market is best suited to determine which energy technologies should move Pennsylvania forward.
Remember when nuclear power generators embraced the marketplace
and were betrothed to electric deregulation after they received a $9 billion
engagement ring?
Now two nuclear corporations, Exelon and FirstEnergy, are suing
ratepayers for a divorce.
Hold on to your wallets. Turns out that a handful of politicians
and their donors know what’s best for Pennsylvania ratepayers. Alimony is going
to be in the billions.
Welcome to this century’s version of corporate socialism.
In September 1974, Three Mile Island Unit 1 became operational.
But it was behind schedule and over budget. Four years later, in December 1978,
Three Mile Island Unit 2 came online: three times over budget and five years
behind schedule.
No private equity was invested in the construction of TMI. Only
cost overruns and delays. TMI was built and paid for by ratepayers. Sticker
shock: $1.1 billion.
Then came the bailouts.
Bailout No. 1: After 90 days
of operation, TMI-2 melted down. Ratepayers once again came to the rescue.
Under Gov. Dick Thornburgh’s plan, TMI-2 received $987 million to defuel the melted core from
1981 to 1993.
How did TMI show gratitude? Not only does TMI-2 pay no taxes,
but the school district and the county had to return about $1 million in 2005 after the company
appealed the tax assessment.
Great partner to the community!
In 1996, the Pennsylvania Legislature passed the
Electricity Generation Customer Choice and Competition Act. The law restructured the electricity utility industry, separating the generation of
electricity from its distribution and transmission.
Pennsylvanians were free to choose the source of their
electricity from any qualifying provider, but ownership and operation of the
utility wires remained with regulated monopolies. Once those customers were
free to choose a more affordable source of electricity, the utilities’
expensive nuclear power could not compete in the new retail generation market.
There was one huge problem — utilities were saddled with nuclear
power plants that were burdened with enormous debt because of cost overruns. That debt was
secured by the wallets of the utilities’ previously captive customers.
Bailout No. 2: TMI-1 was part of the $9 billion
deregulation bailout that took consumers a decade to pay off from 1999 to 2009.
Keep in mind, these payments were meant to help nuclear power generators
transition to competitive markets.
Now they are back for more!
It turns out that TMI is the most uneconomical reactor in the
state. It lost $300 million to $800 million
over the last five years despite the deregulation bailout.
If consumers already paid to build the nuclear plants, and then
paid off the debt on the nuclear plants, why does TMI need yet another bailout?
What happened to all the money collected from consumers under the Competitive
Transition Charge over 10 years?
Bailout No. 3? If the bailout
in New Jersey cost $300 million a year, how much is the bailout going to cost
Pennsylvania, which has three times the amount of nuclear capacity? This
includes three nuclear facilities with six reactors that continue to clear
auction and remain profitable.
Rather than asking for another bailout, TMI should commit to
finally cleaning up TMI-2 — a de facto high-level radioactive waste site in the
middle of the Susquehanna River — and deploy its 525 employees to decontaminate
and decommission TMI-1.
* Mr. Epstein is the Chairman of Three Mile Island Alert Inc.,
a safe-energy organization based
in Harrisburg, Pennsylvania, and founded in 1977. TMIA monitors Peach Bottom, Susquehanna
and Three Mile Island nuclear generating stations: tmia.com.
Type:
- Log in to post comments
