Closing of nuclear plants a mistake
Prematurely closing nuclear power plants is a mistake. Early closing of well-operating nuclear power plants, including some of those operated by Exelon in Illinois, is bad for the environment, will cost Illinois a number of high-paying jobs and substantial amounts of local tax revenue, and will in the end raise electricity prices for Illinois businesses and residents.
Why is this happening? This bad policy is a result of the failure of the wholesale market for electricity to price the environmental benefits of nuclear power correctly and not to recognize the carbon emissions of other generation, including natural gas. It is a result of the subsidies to wind power producers and the failure of the wholesale market and energy policy to value energy diversity of supply.
While natural gas prices are low today, they have almost doubled from their earlier lows in 2012. Electricity generating plants last for 40 years and longer, and locking into one fuel for 40 years based on today's prices does not provide the insurance that we get from diversity. A diversity of generation protects us from large relative price changes in the future, and a sound energy policy would value fuel diversity.
Nuclear power is by far the most environmentally friendly source of electricity. Nuclear plants produce no carbon emissions and are available about 90 percent of the time, including, most importantly, at periods of peak demand. Maintenance is generally scheduled when the plants are less needed.
Much is made of alternative electricity generation, including wind power, which benefits from significant subsidies to offset its higher cost. But wind farms generate electricity only when the wind is blowing, and that means that wind farms only generate about 25 percent of their potential, compared with 90 percent for nuclear plants, and there is no guarantee that this generation will be when the power is most needed, for instance, on hot summer days. Wind generation, therefore, requires backup generation, and this is carbon-based gas or coal. This more than offsets the emissions gains from wind generation compared to nuclear generation.
Of course, nuclear power installations employ many people, and jobs for nuclear engineers and nuclear technicians, among others, are highly paid. Exelon employs 5,900 people at its nuclear facilities in Illinois, and this employment results in thousands of other indirect jobs. Full-time employees averaged over $100,000 in yearly salary. These jobs will be lost if nuclear plants shut down early. Companies with nuclear power plants pay substantial property taxes to local governments, including school districts. Exelon pays almost $300 million in state and local taxes each year. These taxes have improved life in these communities and have improved schools serving the area. Local communities and school districts will be hard pressed to replace these taxes.
Because the wholesale electricity market in Illinois is not correctly reflecting the environmental benefits of nuclear generation and the value that comes from fuel diversity, the government and the Illinois Commerce Commission must intervene. This would be to the benefit of Illinois businesses and residents, providing cleaner air, maintaining good jobs and local tax revenue, and helping to secure long-term favorable electricity prices for Illinois.
• Stanford L. Levin is emeritus professor of Economics at Southern Illinois University Edwardsville. He has served as a Commissioner on the Illinois Commerce Commission, the utility regulatory agency in Illinois and consults widely for regulatory commissions and utility companies in the U.S. and elsewhere.