Opinion: Is Exelon Spinoff Prelude to a Nuclear Bailout?

Calvert Cliffs Nuclear Power Plant. CC BY-SA 3.0.

Last month, The Baltimore Sun reported that nuclear energy behemoth Exelon, owner of Baltimore Gas and Electric Co. and five other utilities, may spin off its electricity-generation business into a new, separate company.

The reason for this impulse is obvious: Exelon’s nuclear business is bleeding money and threatens the company’s stock prices. Exelon is desperate to unload its money-losing nuclear power plants as soon as possible.

The problem Exelon faces unloading its nuclear business is equally obvious: Investors and creditors also know the reactors are bleeding money — and they won’t let the spinoff move forward unless they receive guarantees that the reactors will be profitable. After all, if Exelon, the largest and most politically powerful nuclear operator in the country, can’t run its reactors profitably, who can?

In other words, this may all be a prelude to another nuclear bailout. As it has done in four other states, Exelon and its supporters will come pleading that nuclear power is essential to Maryland’s energy mix and fighting climate change.

Now, former EPA administrator Carol Browner has published a vaguely worded commentary [“It’s Time for States to Determine Their Own Clean Energy Futures,” Maryland Matters, Dec. 4] urging Maryland and other states to “chart their own path” on energy. Since 2014, Browner has been a paid spokesperson for Nuclear Matters, a front group Exelon has funded to lobby for expensive consumer-finance bailouts for unprofitable, old nuclear power plants.

Browner’s piece rightly points out that electricity markets are stacked against renewable energy sources like wind and solar. But she suggests that those markets also disadvantage nuclear power. That couldn’t be further from the truth.

What’s more, beware Browner’s nebulously suggested solution. “Charting their own path” means each state having to procure all the electricity capacity necessary to meet requirements that would still be set by the same bodies that are undermining renewable energy: PJM Interconnection and the Federal Energy Regulatory Commission.

Because Maryland does not have enough power plants to supply all of the electricity we use, the power plants that are located in Maryland would command a hefty premium — including Exelon’s Calvert Cliffs Nuclear Power Plant in Lusby.

Exelon is making the same pitch in New Jersey now. Under a 2018 law, nuclear power plants owned by Exelon and PSEG are receiving $300 million per year in subsidies paid by consumers. Just two years later, Exelon and PSEG are now offering to give up $300 million per year in easy money if New Jersey will do what Browner is suggesting. That’s a sure bet it’s an even worse deal for consumers and the climate.

A recent study by researchers at the University of Sussex shows that countries that invest in nuclear do not see climate emission reductions but countries that invest in renewables do. It also shows that investments in nuclear and renewables tend to crowd each other out. In other words, countries that invest more in nuclear tend to invest less in renewables, and vice versa.

Another recent report by economists with RethinkX shows that nuclear — and even fracked gas — will not be anywhere close to competitive against wind and solar in the near future. The study shows renewables are poised to transform the energy industry as quickly as smartphones did a decade ago, making it possible to convert our economy to 100% renewable electricity as soon as 2030.

No wonder the nuclear industry is engaging in corrupt practices across the country to secure bailouts and save its investments. In Ohio, FirstEnergy and its lobbyists funneled $60 million to the House Speaker and his associates to buy the 2018 election, in exchange for enacting a $1 billion bailout for FirstEnergy’s reactors. The bailout appears to have been necessary for FirstEnergy’s creditors to agree to a bankruptcy plan, under which the corporation spun off its unprofitable nuclear and coal plants into a new company called Energy Harbor. Many people may be going to jail, including FirstEnergy’s CEO, who hasn’t been indicted yet but was fired last week.

In Illinois, four Exelon executives and lobbyists were indicted on federal corruption charges this week. The case includes ComEd’s maneuverings to attain a $2.4 billion nuclear bailout in 2016. House Speaker and state Democratic Party Chair Michael Madigan is also under investigation, while the state’s largest utility, ComEd (an Exelon subsidiary), is cooperating under a deferred prosecution agreement and paying $200 million in fines.

The spinoffs and influence-peddling by nuclear operators and their allies are the last gasps of an obsolete industry. Nuclear energy is dirty, dangerous and expensive, with extensive environmental justice and human rights violations. There is no comparison to renewables, either on cost or on the environment.

Maryland needs a plan to phase nuclear out, not throw it a lifeline it doesn’t deserve. Exelon’s spin-off and bailout schemes would only leave Marylanders holding the bag for a business Exelon knows has no future.

If Marylanders want to fight the climate crisis while making our electricity bills affordable, we need to resist coming calls from Exelon and its supporters for a nuclear bailout and embrace the future: moving to 100% renewable energy.

— TIM JUDSON

The writer is executive director of Nuclear Information and Resource Service, a national environmental watchdog based in Takoma Park. He has written several reports on nuclear energy, climate justice and renewable energy.