Subsidies to nuclear power reactors are among the most obvious instances of the federal government acting as a wealth pump for large corporations. Now, companies that operate these expensive and dangerous power plants are looking for additional wealth pumping from state governments. If those of us who support cleaner, cheaper and much less dangerous power can’t stop them, our state governments will have less to invest in education, clean energy and other beneficial work because more will go to extending the life of a failing nuclear power industry.
We might start by looking at the Price-Anderson Act. It was first passed in 1957 and has been renewed as needed since. It puts a cap on the amount of damages for which a commercial reactor can be held liable. For 2017, that amount is $450 million per reactor. (Read the linked Wikipedia article for details.)
It seems like a big number, but it is pretty small when compared to what is possible. In December of 2016, the Japanese government estimated the cleanup costs for the Fukushima nuclear reactor disaster at $190 billion. That’s “billion,” not “million.” For an equivalent disaster in the United States, insurance would cover $0.45 billion, leaving the government to cover the other $189.55 billion.
The Fukushima reactors are located in a thinly populated area of Japan. Something like 185,000 people were evacuated. In the United States, reactors that might melt down are located upwind of New York City (metro area population over 20 million), Chicago (9-1/2 million) and Detroit (4.3 million in 6 counties, 5.3 million in 9 counties), to cite just 3 examples in which fallout would be orders of magnitude more damaging than at Fukushima.
It’s impossible to put a real dollar number on the value of this subsidy. It each US reactor were required to purchase insurance for the worst outcome of a nuclear accident, then no reactor would be operating. The insurance industry does not and will not issue insurance for such a huge catastrophe.
Then there’s highly radioactive nuclear waste – spent fuel highly irradiated reactor parts. To quote from an actual contract, “… DOE [federal Department of Energy] has the responsibility for the disposal of spent nuclear fuel and high-level radioactive waste of domestic origin from civilian nuclear power reactors in order to protect the public health and safety, and the environment …”
In fact, the DOE has failed to take the spent fuel, so the DOE now owes reactor companies for the cost of storage of spent fuel past the time it could have been turned over to the DOE for disposal. That is, for the first 5 years or so after removal from the reactor, used fuel rods are too radioactive for anything but storage in a water-cooled pool at the reactor site. Once the radioactivity has died down a bit, they could then be placed in dry shipping or storage casks.
From 1987 to 2011, there was a plan to use Yucca Mountain in Nevada as the federally-owned site for permanent disposal of spent nuclear fuel. In 2011, this plan was abandoned. There currently is no plan on how to permanently dispose of spent fuel. it is a hard problem. Until there is such a plan, it is not possible to say what it would cost to follow that plan.
We now have two government guarantees for which it is impossible to come up with a sound dollar cost figure. However, without both these guarantees, the commercial nuclear reactor industry could not exist. Some people are reluctant to call these guarantees “subsidies,” because for most subsidies, there is at least some estimate of or cap on costs. Perhaps, just to be able to differentiate these two uncapped guarantees from ordinary subsidies, it’s necessary to call them “supersubsidies,” in the same way we speak of “supercomputers” or “superstars” or “Super PACs.”
Even with federal supersubsidies, it has proven more and more difficult for electric utilities to operate their reactors profitably. That’s why the owners of the Fitzpatrick reactor, the Nine Mile Point station, the Clinton station and the Quad Cities plant have recently lobbied for and gotten subsidies from the states in which they operate.
The idea that these operations were losing money is not just speculation. To quote from the Wikipedia article about Quad Cities:
“On June 2, 2016, Exelon announced its intentions to close Quad Cities Nuclear Generating Station on June 1, 2018 due to the plant’s profitability and a lack of support from the Illinois state legislature.
On December 14, 2016, Exelon announced it would keep Quad Cities Nuclear Generating station open due to Illinois passing the Future Energy Jobs Bill.”
“In December 2016, Illinois voted to subsidize Exelon with 1c/kWh or $235 million per year (depending on electricity rates) to keep QC and Clinton open for at least 10 years, as natural gas had decreased rates.”
Counterpunch recently ran an article about new subsidies for nuclear plants. However, the issue is not new. In 2011, the Union of Concerned Scientists did an extensive report which concluded, “The nuclear power industry requires government help to stay afloat.” It’s more true today than it was then.
Commercial nuclear reactors are supposed to be private businesses. Retail stores such as Radio Shack, K Mart are closed when they cannot be operated at a profit. Restaurant chains such as Bennigans or Howard Johnsons have closed down for the same reasons. In 2016, hospitals – a critical public service if ever there was one – closed for financial reasons in Ohio, Connecticut, California and elsewhere. Remember Sports Authority, Circuit City, Montgomery Ward and the General Atlantic and Pacific Tea Company?
Just this year, Westinghouse filed for bankruptcy because it has been losing lots and lots of money by being in the busiess of construction nuclear reactors. Read all about it from the New York Times.
Closing down should have happened with the money-losing reactors in New York and Illinois. Instead, the companies operating them were successful in lobbying state legislatures to give them money. The problem is, these reactors are not particularly different from Fermi 2 in Michigan, or any of the other 98 reactors running in Washington, California, Florida, New Hampshire and points between. They are all, in spite of the insurance cap and waste disposal subsidies, absurdly expensive to operate.
If new subsidies granted by the governments of New Your and illinois are a precedent, we can expect the same demand made on every other state in which a commercial reactor is located. We had all better get prepared to say, “NO!” By being prepared, I mean finding out now if your state legislator will agree to such a demand. If so, then prepare to support, in the next election, an opponent who will not. If you live in Illinois and New York, you can easily find out whether your state legislator supported the new subsidy, and act appropriately.
The nuclear power industry is dying, for several excellent reasons. Cheaper and safer ways of producing electrical power are available now. Using public money to put off nuclear’s demise is a waste. Public policies and funds should support solar and wind, or at the very least get out of the way.