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Home / PowerFacts Blog / Threats to Close Illinois Nuclear Plants Highlight the Problem With Subsidies

August 30, 2021

Threats to Close Illinois Nuclear Plants Highlight the Problem With Subsidies

By EPSA

Illinois lawmakers will reconvene Tuesday, and may be poised to take up significant energy legislation that has stalled over the summer. The results will have significant implications for electricity customers, local communities, competitive market innovation and the state’s future energy costs – as well as Governor J.B. Pritzker’s clean energy ambitions. 

At the heart of the matter is the future of two nuclear plants owned by Exelon Corp. The conglomerate is once again putting pressure on the state legislature and local communities heavily reliant on plant-generated jobs and tax revenue, saying it will shut down its Byron and Dresden facilities if it cannot secure millions in ratepayer-funded subsidies to support the plants’ operation. This puts legislators in a tough position. But little evidence has been given to show the plants aren’t profitable, with expert reports indicating they can operate based on market revenues without subsidies. And PJM Interconnection, the state’s power grid operator, has said closing the plants will not threaten reliability.  

A Troubled History 

The legislative stalemate and tension highlight the bigger challenges and pattern surrounding subsidized nuclear generation owned by multiple companies throughout the U.S., which puts energy customers on the hook for increased costs of running plants that expert analysis indicate should be profitable without assistance outside of the market.  

The troubled history isn’t limited to one company or state. Battles over nuclear subsidies have played out in several states,  including most recently South Carolina, where a nuclear executive became the fourth individual facing federal charges concerning the construction of units at the V.C. summer nuclear plant. In Ohio, political dealings to secure support and favorable legislation for the Davis-Besse and Perry plants resulted in one of history’s biggest energy corruption scandals. And Illinois is not immune from questions surrounding the energy policy process. The local utility owned by Exelon, ComEd, agreed last year to pay $200 million to federal prosecutors to settle an alleged bribery scheme involving House Speaker Michael Madigan. Governor Pritzker made a special point last summer to assure voters that any future energy policy would prioritize fair competition, protect consumers and hold ComEd accountable.

Raising the Stakes 

In addition to playing a high stakes game at the state level, the industry has taken its case to Capitol Hill, where it is poised to secure billions in federal support for existing nuclear plants – even though Exelon claims that support will not come in time to save Byron and Dresden. Currently, there are few measures in place to ensure that subsidies are needed and proper oversight is in place to protect consumers from paying more than necessary. We are working to share concerns with legislators, and point them to competitive policy solutions that result in a better deal for consumers and the environment.

Competition Brings Better Energy Solutions 

There is no question that nuclear power has an important role to play in a reliable and cleaner energy future. But the competitive market and regional grid operator can best determine how much it should cost, and where and when it is needed. Illinois has a wealth of competitively priced and reliable power generation at its disposal, with a promising path to a more affordable clean energy transition through the competitive power market. Illinois is part of PJM Interconnection, the nation’s largest regional grid operator and competitive electricity market, which has brought record low power generation costs, reliability and carbon reductions to the state. 

See how Illinois benefits from competitive power suppliers.

Subsidies undermine the ability of competitive markets to drive innovation, spur retirement of more expensive or outdated resources, and bring better energy solutions to the grid. And when power generation is competitive, plant owners – not ratepayers – are responsible for the cost of doing business. Standing in clear contrast, EPSA member companies own and operate competitive nuclear plants, which run without repeated requests to raise customer bills.  

We’ve watched this drama play out before. It’s not the first time nuclear owners have threatened closure if subsidies could not be secured. But it’s time for a new paradigm. By keeping power generation competitive and less at the whim of politics, we can avoid entanglements that allow national conglomerates to use local communities and governments as pawns to earn higher profits. Instead, Americans can thrive with competitively priced, innovative power generation that evolves as demand shifts and better solutions come to market. 

Read more from EPSA president and CEO Todd Snitchler on why already profitable nuclear plants don’t need a taxpayer bailout.

Filed Under: Homepage Featured Article, PowerFacts Blog Tagged With: affordable, clean energy, Competition, electricity, emissions, energy policy, Illinois, markets, nuclear plants, nuclear subsidies, power markets, reliable, subsidies

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