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States shouldn’t bail out nuclear power plants: David Williams

Posted 11/7/17

 

More than half of America’s nuclear power plants face a financial crisis. Collectively, these plants lose nearly $3 billion a year. They haven’t been able to compete with power …

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States shouldn’t bail out nuclear power plants: David Williams

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More than half of America’s nuclear power plants face a financial crisis. Collectively, these plants lose nearly $3 billion a year. They haven’t been able to compete with power plants that run on cheap natural gas. 

Nuclear operators are begging state legislatures for subsidies to keep their plants running. They’re hoping to lure lawmakers into bailing them out by promising zero-emissions energy production.  

State legislators should reject their requests. Nuclear subsidies cost taxpayers and consumers billions of dollars and offer little to no economic or environmental benefits.

Nuclear plants in several states already receive taxpayer-funded subsidies. In July, an Illinois federal judge upheld state legislation that funnels $230 million per year to Chicago-based Exelon Corp. (owner of Three Mile Island) to keep its nuclear facilities operating. The same month in New York, a federal judge dismissed a consumer lawsuit against a $480 million annual handout to three nuclear plants. 

Nuclear bailouts don’t protect consumers from energy price increases; they facilitate them. Nuclear subsidies are expected to raise New Yorkers’ electric bills by $3.4 billion within the first five years. The Illinois program constitutes the biggest energy rate hike in U.S. history — projected to cost residents and businesses $16.4 billion.

The same goes for other states. Under a proposed subsidy in Ohio, consumers would see electric bills climb 5 percent per year. Consumers in the mid-Atlantic and the Northeast would have to pay $3.9 billion more per year if nuclear plants in the area received similar backing.

Bailout proponents also raise the specter of job losses. While nuclear facilities do provide local jobs — Exelon employs 5,900 people at its plants in Illinois — subsidy programs rob Peter to pay Paul. An analysis of the Illinois subsidies found they would cost the state 43,000 jobs by 2030 and $14.7 billion in economic output.

Natural gas firms create jobs and grow the economy without picking taxpayers’ pockets. According to the American Petroleum Institute, in Illinois, the natural gas industry supported nearly 150,000 jobs and contributed $18 billion to the state economy in 2015. The numbers are higher still for New York, where natural gas is responsible for 152,000 jobs and more than $20 billion in economic output.

Unlike nuclear subsidies that jack up monthly energy bills, natural gas saves consumers billions. Electricity prices in Ohio have dropped 50 percent since 2008 thanks to affordable natural gas. Last year, thanks to the continued natural gas boom, Americans spent just 4 percent of their household budgets on energy costs — the lowest share ever.

Some supporters of nuclear energy claim that the economic inefficiencies are worthwhile, since nuclear power helps reduce U.S. carbon emissions. The United States has indeed made significant progress on curbing emissions. According to the U.S. Energy Information Administration, energy-related U.S. carbon output has declined nearly 14 percent since 2005. 

But nuclear plants don’t deserve the credit — natural gas-fired plants do. Almost 70 percent of the reduction in energy-related carbon emissions between 2005 and 2015 is due to the shift from coal to natural gas for electricity generation, according to the EIA.

Natural gas is abundant and affordable, and that won’t change anytime soon. The United States is a global leader in producing oil and natural gas, and the latter generates one-third of the nation’s electricity. 

New York and Illinois officials are harming consumers and taxpayers by propping up failing nuclear plants. Policymakers nationwide should reject corporate welfare and allow unsubsidized market competition to determine which energy sources work best for their constituents. 

David Williams is president of the Taxpayers Protection Alliance.


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