U.S. nuclear power plant closures create negative economic consequences: Nuclear Matters

Nuclear power plants across the nation are facing a perfect storm of economic and policy challenges that are posing a threat to their continued operation, with the potential for significant economic consequences to states and local governments, said Nuclear Matters Leadership Council member Blanche Lincoln.

Electricity use has been flat for several years due to a sluggish economy, said Lincoln, a former Arkansas senator, in a written statement to Power News Wire. In addition, the rapid expansion of natural gas production and its resulting price decline over the past decade adds pressure to the industry. Electricity markets also fail to properly value nuclear energy as a low or zero-carbon electricity source, she said.

The combination of all three factors has created potentially fatal economic headwinds for some carbon-free nuclear energy plants.

“Regulators, policymakers, and industry stakeholders must work together to ensure that existing nuclear plants are properly recognized in electricity markets for the value that they provide,” said Lincoln of Nuclear Matters, a nuclear power advocacy group.

Nuclear plants contribute significantly to the economies of the states and cities in which they operate. A typical U.S. nuclear plant has an average annual payroll of $40 million, employs between 500 and 700 workers, generates about $470 million a year in sales of goods and services, and pays $16 million in local and state taxes, Lincoln said.

In Illinois, three nuclear power plants are suffering from economic challenges in Rock Island, Clinton and Ogle counties.

Exelon Corp. officials have warned if the playing field is not leveled and if the value of non-emitting energy sources are not recognized and rewarded by government, those plants might close. Once plants are closed, Exelon officials said, it is all but impossible to reopen them.

“With regards to Illinois, nuclear energy is very important to the state given that its existing nuclear plants produce nearly half of the state’s electricity and are vital to its economic security,” Lincoln said.

Nearly 28,000 direct and indirect jobs are at stake in Illinois from a nuclear power industry that injects about $9 billion directly into the economy each year.

“The closure of any one of the plants in Illinois would thus certainly have negative impacts. We must not underestimate their economic significance for that state,” Lincoln said.

The premature closure of well-functioning nuclear plants is unfortunate and the impacts of such events are tangible in the communities in which they occur, Lincoln said.

“The closure of even one plant can often mean devastating economic losses,” Lincoln said. “It’s not just hypothetical, we’re seeing this happen in real time in areas where plants are closing.”

The closure of the Kewaunee plant in Wisconsin in 2013 cost its host county 15 percent of its jobs and 30 percent of its tax revenue, Lincoln said. The closure of the San Onofre plant in California in 2013 resulted in the loss of 1,500 local jobs, and had an estimated cost of $400 million to the region in the form of lost revenue and increased costs.