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Nuclear Costs

Estimates for new reactor construction costs continue to sky-rocket. Conservative estimates range between $6 and $12 billion per reactor but Standard & Poor's predicts a continued rise. The nuclear power industry is lobbying for heavy federal subsidization including unlimited loan guarantees but the Congressional Budget Office predicts the risk of default will be well over 50 percent, leaving taxpayers to foot the bill. Beyond Nuclear opposes taxpayer and ratepayer subsidies for the nuclear energy industry.

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Thursday
Mar242016

Nuclear robber barons, riding radioactive white elephants: PSC approves Exelon takeover of Pepco, against the will of D.C.!

Sept. 17, 2015 PowerDC rally against Exelon takeover of Pepco, before marching to D.C. Mayor Muriel Bowser's office to deliver the hand-signed banner

Does D.C. stand for "Den of Corruption"? With a radioactive twist?

As reported by the Washington Post, in the latest shocking reversal -- of its own vote just a few weeks ago -- a 2-1 majority of the District of Columbia Public Service Commission (PSC) has approved Exelon Nuclear's takeover of Mid-Atlantic electric utility Pepco.

See the D.C. PSC press release announcing the split decision.

D.C. PSC Chairman, Betty Ann Kane, voted against Exelon's takeover of Pepco for the third time since August. In her Dissenting Opinion (see Appendix A to the PSC Order, pages 33-35 of 65 on the PDF counter), Kane wrote this remarkable passage:

Based on its merits, I find that while the proposed changes address some of my concerns, many others remain. Most importantly, none of the revisions to the 142 terms of the proposed acquisition change the fundamental inherent conflict which has led me on two prior occasions to find that the proposal is not in the public interest. There are many promises and a lot of money being offered. Expensive wedding gifts are nice. But all the wedding gifts in the world can't make a bad marriage good. (emphasis added)

Kane concluded her Dissent:

Unlike a rate case, the sale of Pepco won't be reviewed by the Commission and can't be adjusted every few years. It is gone forever. The stated motive of the sellers is to increase PHI [Pepco Holdings, Inc.] shareholder value. The motive of the buyers is to add regulated revenue to prop up Exelon's failure to pay dividends to its shareholders. However the needs of Pepco's customers and the District are for a safe, reliable, modern electricity delivery distribution system at a just and reasonable cost. I vote No. [emphasis added; internal citations omitted]

"Exelon's failure to pay dividends to its shareholders" is due to its five uncompetitive atomic reactors in IL, as well as Ginna in NY. In that very real sense, Exelon's takeover of Pepco's captive ratepayer base, across multiple Mid-Atlantic states and D.C., amounts to a massive, "life support" subsidy for age-degraded, failing, dirty, dangerous, and expensive nuclear power plants, that would otherwise likely close.

The PSC vote caught even trade press publications like Utility Dive by surprise, which just hours earlier had predicted the merger was likely going down to defeat, after a united Washington, D.C. city elected leadership had expressed its opposition to the latest takeover terms.

Exelon will pay $6.8 billion to take over Pepco, paying a large premium to Pepco shareholders for their stock holdings. Exelon has reportedly spent an additional $200-300 million, on such things as lawyers, lobbyists, and pull-out-the-stops PR campaigns, to secure the merger. Within minutes of the PSC's ruling announcement, Pepco shares increased in value by 25-30%, as reported by TheStreet.

Indeed, leading Exelon takeover opponent, D.C. Council Member Mary Cheh, stated to reporters moments after the D.C. PSC announced its ruling at its HQ hearing room in downtown D.C., that Exelon Corporation, and Pepco shareholders, were the sole beneficiaries of this bad decision, while D.C. ratepayers will be harmed.

The 2-1 DC PSC majority ruling defies the will of D.C.'s mayor, attorney general, and Office of People's Counsel, as well as its water department, and other parties to the proceeding, including member groups of the PowerDC public interest and environmental coalition.

Even the federal government -- the largest consumer of electricity in D.C. -- urged the PSC to reject Exelon and Pepco's latest proposal, citing dissent from D.C.'s local elected and appointed leadership, as well as the very narrow constraints of the PSC's previous rulings, requiring unanimity amongst all "Settling Parties," which is lacking. This begs the question, was this highly irregular, acrobatic D.C. PSC split-decision approval of Exelon's takeover of Pepco even legal?!

As reported by Utility Dive,

While the GSA is an important intervenor in the merger docket, it did not sign onto the settlement deal itself, saying it did not have time to review the deal before the merger docket was reopened.

This is quite an indictment of the D.C. PSC process. If the U.S. federal government General Services Administration (GSA), an official party to the proceeding, with a large budget and full staff of competent financial, legal, and technical experts, can't keep up with this D.C. PSC proceeding's roller coaster ride, how are D.C. ratepayers, non-profit groups, etc. supposed to?! This process has thus lacked essential, adequate openness, transparency, and accountability.

It appears that Exelon's previously pledged, even token commitments towards renewables, efficiency, micro-grids, etc. -- to sweeten the deal -- are now at risk. At least a portion of those funds will now likely be re-directed to cushion the blow of major rate hikes for D.C. residents, many of whom barely get by on fixed incomes, that could hit as early as this summer.

D.C. Mayor Muriel Bowser, who had recently supported Exelon's takeover, so long as Exelon's planned 45% rate hikes would not hit till 2019 (after her 2018 re-election campaign), recently reversed herself and opposed the Exelon takeover.

(Incredibly enough, under the previous terms that Mayor Bowser supported, Exelon was planning to charge interest on its coveted, accumulating rate hike, which would then have been applied in 2019!)

D.C. Mayor Bowser released a short statement in response to the D.C. PSC approval of the Exelon takoever of Pepco:

“It appears the Public Service Commission favors government and commercial ratepayers over DC residents. Instead of a three year rate increase reprieve that we negotiated, it appears that DC residents will be hit with a rate increase as soon as this summer.”

But the mayor's previous support had created a Frankenstein's monster, that got out of her control. The question now that the D.C. PSC proceeding roller coaster ride is apparently over, and this juggernaut has been set loose on the region, is how much damage will be done to Washington, D.C., including ratepayer pocketbooks (especially for those on fixed incomes, such as low income households, seniors, etc.), and local laws and policies envisioning a clean, green, sustainable energy future?!

D.C. Office of People's Counsel (OPC) Sandra Mattavous-Frye expressed deep concern "that residential consumers are losing out on the guaranteed rate protections OPC has sought since this case began two years ago," and added:

"Despite the Commission's perplexing approval of a proposal that OPC and most of the other settling parties rejected, the Office of the People's Counsel is fully prepared to continue to aggressively advocate for ratepayers and fight to ensure that rates remain affordable for consumers, particularly for our most economically vulnerable residents...".

D.C. Attorney General, Karl A. Racine, also restated his opposition to the now-approved Exelon takeover of Pepco:

“As we have previously stated, the only Pepco-Exelon merger agreement we believe is in the public interest is the agreement our office originally helped to negotiate, along with the Office of People’s Counsel and the Mayor’s office, last fall. We do not believe the agreement the Public Service Commission approved today provides enough benefits or protections for residential, including low-income, ratepayers.”

As warned by Beyond Nuclear and many others for the past many months and even years of this D.C. PSC proceeding, Exelon will now gouge ratepayers not only in D.C., but from NJ to DE, MD, and VA, across Pepco's service territory. The public utility commissions in those states had already blessed the highly controversial merger. So too had FERC (Federal Energy Regulatory Commission) and DOJ (U.S. Department of Justice). D.C. was the last chance to stop it.

Opponents to the merger now have 30 days to file a motion for reconsideration with the D.C. PSC.

Those steady Mid-Atlantic ratepayer funds will almost certainly be funneled by Exelon to Illinois, to help prop up five dirty, dangerous, expensive, and uncompetitive atomic reactors that otherwise might have closed for good. Exelon may even try to foist its astronomically expensive nuclear decommissioning bills on its newly acquired, far flung empire of captive ratepayers.

Exelon is simultaneously lobbying the Illinois state legislature for a massive bailout of more than $1.6 billion, for the same purpose.

Exelon's Ginna nuclear power plant in upstate NY would also likely already have been shut down, but for pricey surcharges being shouldered by Rochester Gas & Electric customers. AGREE is leading the resistance to that particular Exelon Nuclear bailout at ratepayer expense.

Thus, from NY to MD, PA to IL, Exelon Nuclear's fleet of two-dozen age-degraded atomic reactors is gouging ratepayers, like a herd of radioactive white elephants.

Exelon, the only company to be expelled from the American Wind Energy Association, is now no longer "just" the largest nuclear utility in the country, it is the largest electric utility in the country, after its highly controversial takeover of Pepco.

PowerDC has released the following statement:

"We are profoundly disappointed and saddened that the DC Public Service Commission has ignored the clear opposition to the proposed Exelon-PEPCO merger voiced by the District’s elected officials, community and business leaders, and residents.

"By approving the merger, the PSC has exposed our city to decades of higher rates, weakened its own ability to guide our city’s energy future, and helped ensure that DC will fall behind the rest of the US on clean, efficient energy.

“Our organizations and the citizens we represent will fight Exelon every step of the way to ensure that DC and the region do not suffer the same fate as Exelon’s other customers. And we will hold the PSC accountable for its actions in the months and years to come. The fight is not over.”

Allison Fisher, Outreach Director at Public Citizen’s Energy Program, released the following statement:

By clearing the path for Exelon to take over Pepco, the D.C. Public Service Commission has abdicated its responsibility to put the public interest before corporate profits. We are deeply disappointed that the commission discarded its well-informed and publicly supported position to reject the takeover.  

This is a huge loss for consumers, a discouraging setback for the institutions entrusted to protect them and a sad commentary on how things are done in the District.

Interviewed by WAMU, D.C. PSC Chairman Betty Anne Kane, who cast the dissenting vote against the takeover, warned that the decision undermines D.C. laws and regulations that envision a clean, green, sustainable energy system.

To learn more about Exelon's takeover of Pepco, and other nuclear utility money grabs at ratepayer and taxpayer expense, visit Beyond Nuclear's Nuclear Costs and Nuclear Subsidies website sub-sections.

Tuesday
Mar152016

"Playing Nuclear-Plant Chicken: Exelon's Crane Makes Springfield Rounds Again"

The BEST coalition is described on its website as "a 501 (C)(4) nonprofit organization comprised of business, government and consumer groups as well as small and large businesses working to protect struggling Illinois ratepayers from rate increases caused by the proposed $1.6 billion Exelon bailout. We do not oppose nuclear power. We oppose bad policy that would increase costs to consumers and businesses without providing any benefits." (emphasis added)

BEST has reprinted at its website an article by Crain's Chicago Business, "Playing Nuclear-Plant Chicken: Exelon's Crane Makes Springfield Rounds Again."

Monday
Mar072016

Exelon's takeover of Pepco on brink of collapse!

Sept. 17, 2015 PowerDC rally against Exelon takeover of Pepco, before marching to D.C. Mayor Muriel Bowser's office to deliver the hand-signed banner.As reported by the Washington Post, Chicago-based Exelon Nuclear and Mid-Atlantic utility Pepco have filed "last-ditch" proposals to save their $6.8 billion merger from imminent defeat. But the proposals lack support from any other party to the D.C. Public Service Commission (PSC) proceeding, including D.C.'s mayor, attorney general, and Office of Public Counsel. The proposals have been previously rejected by the D.C. PSC, multiple times. And they would up-end a proceeding that has been under way for two years already, providing the public with an absurdly short one-week time period in which to comment.

Although Exelon President and CEO, Chris Crane, had said recently to investors that he would walk away from the takevoer if it weren't settled by March 4, he has now urged the DC PSC to agree to the new bad deal by April 7.

PowerDC, a coalition of environmental, public interest, and ratepayer groups, urges D.C. residents and ratepayers to take action, to block Exelon's bad deal, once and for all.

Tuesday
Mar012016

Washington, D.C.'s mayor, attorney general, and Office of People's Counsel reject PSC conditions for Exelon takeover of Pepco!

Hold the presses! As reported by PowerDC, as well as NIRS and CCAN, the Mayor of Washington, D.C., Muriel Bowser, as well as D.C.'s Attorney General, Karl Racine, and the Office of People's Counsel, Sandra Mattavous-Frye, Esq., have all rejected the PSC's conditions for the Exelon takeover of Pepco to proceed. As reported by the Washington Post, this could well doom the corrupt deal. (Note that an earlier version of the Washington Post article stated, appropriately, that "The debate over the merger centered on the role of renewable energy sources like wind and solar against legacy technologies, such as nuclear power and natural gas. Many environmental groups opposed the deal because they believed it would hinder the migration toward renewable energies." (emphasis added) But, Orwellian "down the memory hold" style, the current version of the article has edited out this entirely appropriate language!) But eternal vigilance and redoubling of efforts is more called for than ever: PowerDC will hold a press conference at the JW Marriott near the mayor's office at the Wilson Building in downtown D.C. on Wed., March 2nd at noon, calling for an end to this bad deal, once and for all. You can take action too, by writing D.C. decision makers. [See entry below, for more background to this rapidly changing story!]

Friday
Feb262016

"A huge loss" for the public interest, ratepayers, and environment: Exelon Nuclear takeover of Pepco poised for approval

Sept. 17, 2015 PowerDC rally against Exelon takeover of Pepco, before marching to D.C. Mayor Muriel Bowser's office to deliver the hand-signed banner

[See entry above, and "follow up" posted below, for updates on this rapidly changing story!]

As reported by Crain's Chicago Business, the Washington Post, and Bloomberg, Exelon Nuclear is now poised to take over Mid-Atlantic utility Pepco. Exelon won the war, despite a determined public interest, ratepayer, and environmental group coalition winning all the battles against the controversial merger over the course of the past two years.

The D.C. Public Service Commission issued a 270-page Opinion and Order, and a press release.

As explained in the DC PSC press release, "the Commission ruled by a vote of 2 to 1 that if all settling parties accept the proposed conditions within 14 days from the date of the Order, the Revised NSA [Nonunanimous Full Settlement Agreement and Stipulation] and the Exelon/Pepco Merger will be approved as in the public interest without further Commission action."

PSC Commissioners Joanne Doddy Fort and Willie L. Phillips voted in favor of the merger; PSC Chairman Betty Ann Kane dissented, holding -- as she has since August 2015 -- that the merger is not in the public interest.

As reported by the Washington City Paper:

Opposing the merger, PSC member Betty Ann Kane said there was no evidence Pepco couldn't keep running without the purchase from Chicago-based Exelon. A merger, Kane said, would leave the PSC "forever playing whack-a-mole" to enforce the terms of the deal on Exelon. 

As quoted in the Blooomberg article:

"This is a huge loss for consumers, a discouraging setback for the institutions to protect them and a sad commentary on how things are done in the District," said Allison Fisher, public outreach director for Public Citizen.

(See Allison Fisher's full statement here.)

As summarized by PowerDC:

THE PSC REJECTED EXELON'S PROPOSAL, BUT LEFT THE DOOR WIDE OPEN FOR THE MERGER TO GO THROUGH. CHAIR KANE, IN MINORITY ON DECISION TO OFFER NEW TERMS, STRESSED THAT MERGER IS FUNDAMENTALLY FLAWED AND NOT IN THE PUBLIC INTEREST.

PowerDC has issued the following action alert:

Today the D.C. Public Service Commission (PSC) proposed a settlement offer to Mayor Bowser and the Office of People’s Council (OPC) that removes rate protections for D.C. residents. If the mayor and OPC accept this bad deal it means Exelon will take over Pepco and your monthly electric bill will increase.

Tell Mayor Bowser and OPC not to sign off on this bad deal!

Per the PSC’s decision, the settling parties have 14 days to either accept or reject the agreement. This is our last chance to stop Exelon.

The initial settlement included $25 million dollars meant to protect residential customers from expected rate increases. This protection is not included in the PSC’s alternative settlement. The PSC’s terms would allow the money to be allocated in the next rate increase. This means that money could end up anywhere.

In Baltimore, BG&E has raised its rates four times since its takeover by Exelon. We can’t let that happen here.

We need to stop this bad deal and we need your help today!

Thank you,

The PowerDC Coalition

David Kraft, Executive Director of Nuclear Energy Information Service in Chicago, a 35-year watchdog on Exelon/Commonwealth Edison, also issued a statement. 

For the past many long months, Beyond Nuclear has joined with public interest, environmental, and ratepayer allies in the PowerDC coalition to resist Exelon's takeover of Pepco at every twist and turn. This included the submission by Beyond Nuclear of extensive comments to the D.C. Public Service Commission, detailing the abuse Exelon has heaped on its own neighbors and workers (especially whistle-blowers) in Illinois, with a warning to not welcome such a rogue corporation to town. Given the permissive approval poised to take place, it is clear Beyond Nuclear's warnings fell on deaf ears, in terms of the 2-1 majority vote at the D.C. PSC. 

The approval deal comes despite a warning by financial analysts that the Exelon-Pepco merger is value destructive, and underlying weakness threatens total returns.