Exelon and Entergy are the nation’s two largest nuclear utilities. And both are scrambling to avoid shutdowns of some of their troubled reactors.
In Exelon’s case, its two-unit Quad Cities and Byron reactors, and single-unit Oyster Creek and Clinton reactors, are economically suspect, unable at this point to provide electricity at a competitive price in the current marketplace. Oyster Creek is in New Jersey, the others are in Illinois.
Entergy also has troubled reactors, specifically single-unit reactors Pilgrim (Massachusetts) and FitzPatrick and two-unit Indian Point (New York). In Entergy’s case, the economic problems of its reactors are compounded by strong and still-growing public and state/local governmental opposition to them.
So what’s a poor utility to do? Exelon has chosen an aggressive, public path, with creation of its front group Nuclear Matters and an approach that tries to get its point of view in front of every camera and on every newspaper and website possible. Entergy has been somewhat more circumspect; while it has funded pro-nuclear groups like C2ES (Climate for Energy and Environmental Solutions), it hasn’t seized the public podium with the same level of gusto as Exelon.
But in a June 5 presentation to Wall Street financial analysts, Entergy made clear what it wants, even if it is keeping its goals and strategy to obtain them opaque to the general public.
“Explore market-based mechanisms with FERC, ISOs and regional stakeholders for currently uncompensated nuclear attributes (both):
•Baseload resource / Price stability
•On-site fuel supply
•Effectively zero greenhouse gas emissions”
Back to that canard of “baseload” power–a concept as necessary to the electrification of the nation in the 20th century as it is a roadblock in the 21st century to creation of a modern, clean and sustainable grid and electricity system.
“On-site fuel supply” is a new one for the utilities and dates back only to the “polar vortex” of last winter, in which some natural gas plants found it difficult to get new gas to keep operating. Gas comes in a pipeline when needed, it isn’t stored onsite. But nuclear reactors typically hold about 18 months of fuel in their cores. Of course, coal is also stored onsite at power plants, so this “attribute,” if it were allowed compensation by regulators would also reward continued operation of coal plants. That would appear at odds with Entergy’s third “attribute”: “effectively zero greenhouse gas emissions,” which is apparently a new way of saying “low-carbon” since they can’t say nuclear power is carbon-free.
It might be noted that while solar and wind power don’t store their fuel onsite, there really isn’t a problem in delivering the sun and wind to the power plant site, whether it be a large wind farm or a small rooftop solar installation. But the wording of the “attribute” would leave renewable power out of the mix.
Throughout Entergy’s presentation documents, there is nary a mention of clean renewable energy. Apparently Entergy sees renewables as a threat, not an opportunity–a perspective that bodes poorly for the utility’s long-term viability.
Entergy spends its largest effort in the presentation on Indian Point, devoting eight of its 25 pages to that endangered reactor site. Entergy seems frustrated that people just don’t seem to view Indian Point the same way Entergy does. It claims Indian Point is beneficial to the state, has broad public support and can’t simply be replaced (regardless of studies that show that it can, in fact, be replaced, and without much difficulty). But in Entergy’s fantasy world, Entergy’s assertions alone should be enough for it to obtain higher prices for nuclear electricity.
The utility thinks it shouldn’t, for example, be forced to build cooling towers to protect marine life along the Hudson River in order to keep Indian Point operating. That, after all, would cost money and despite the fact that Indian Point is at this point an economic reactor for Entergy, a billion dollars or more in cooling tower investment would change that equation rather quickly.
Entergy uses the exact same words to describe Indian Point as it does its goals in general:
“–Reliability: Baseload unit with on-site fuel
–Economic Sustainability: Price-stable baseload energy
–Environmental Sustainability: Important to meeting New York’s greenhouse gas reduction goals”
In a nutshell, what Entergy wants–and what Exelon wants as well–is to be paid for the wonders of nuclear power that few outside the nuclear power industry think are particular benefits at all. On-site fuel? That doesn’t matter where your fuel source is the sun and wind. Greenhouse gases? They can be reduced faster and cheaper with renewables, and without the production of radioactive waste or release of toxic radiation into our air and water. Baseload power? An antiquated concept that gets in the way of establishing a grid based on 21st century technology.
It may be that some executives at Entergy know this. On April 15, 2014, we published “Why are Entergy executives selling their stock?” which examined numerous recent sales of Entergy stock by the company’s own top executives.
Add another one to the list: on June 5, 2014, the same day Entergy made the presentation referred to here to the Wall Street analyst community, Entergy Senior Vice President Donald W. Vinci sold 3,000 shares of Entergy stock–about a third of his remaining holdings–at an average price of $78.50, for a total transaction of $235,500.00. Vinci also sold large shares of Entergy stock both last October and last December.
Maybe that presentation just didn’t go over so well? Or maybe Entergy executives know that nuclear power’s “attributes,” far from deserving increased compensation, are massively outweighed by its deficiencies that call instead for the speediest possible phase-out of Entergy’s, and all other, nuclear reactors.
Indeed, in a different part of the presentation–on the company’s expected growth–the Northeast U.S., where all of Entergy’s troubled reactors reside, is an afterthought. The utility sees its growth in its original home base: the gulf states of Louisiana and Mississippi, where regulators and governments are perhaps not as ready to close polluting power plants to make way for a cleaner, more affordable energy system. Perhaps Entergy really does see where the future lies, and it’s not with a nuclear-powered Northeast.
June 13, 2014
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