JOURNAL NEWS 10/12/16
By Michael Shank
Bailouts are common in government — at the federal and state level and regardless of political party — and that’s what is happening now in New York for the nuclear industry.
New York’s nuclear bailout is merely the latest example of business getting off scot-free while taxpayers pick up multi-billion-dollar tabs. Gov. Andrew Cuomo is planning to bail out the aging and money-losing Ginna, FitzPatrick and Nine Mile Point nuclear plants, some of America’s oldest nuclear plants owned by Exelon and Entergy, with nearly $8 billion of New Yorkers’ hard-earned money (and another $2.8 billion if energy prices fall).
That decision was made after Exelon alone spent $430,000 in lobbying Albany over the past two years. In the same amount of time, Entergy spent $1.7 million lobbying New York state. Money talks.
Nuclear energy throughout New York, and the nation, is struggling because of cheaper natural gas prices and bottom-of-the-barrel oil prices — a glut that’s attributed to rampant hydrofracking. The absence of a carbon tax that would put a more accurate cost on heavy-emitting gas, oil and coal undermines the nuclear industry, while America’s fracked gas boom decimates drinking water supplies and geological integrity all across the country. New York doesn’t allow fracking, but the product is piped across the state.
The New York nuclear bailout falls into the same trap that riddled financial industry and auto industry bailout schemes. There’s little corrective action that’s encouraged, or regulated, and so the industry is allowed to continue making the same mistakes — all at a significant cost to our economy. Nothing could be more inefficient. The most common nuclear industry bailout props up companies operating old plants — in desperate need of repair, emitting radioactive waste, leaking toxic material often and keeping cooling systems that kill massive amounts of marine life — with no conditions. And it’s done using taxpayer dollars to prop up companies — such as Fortune 100 Company Exelon with $34 billion in annual revenues — that aren’t in need of extra revenue.
Albany’s bailout is particularly egregious because the New York taxpayer is not only picking up a nuclear tab but a utilities tab, too, the latter of which is a product of the state’s new Clean Energy Standard. The new standard, while meritoriously aiming for an electricity goal of 50 percent renewable energy by 2030, is requiring utilities to obtain renewable energy credits, a cost that’s also going to be passed on to the taxpayers. And it’s not like these utilities are struggling. New York utilities giant, Con Edison, for example, has $13 billion in annual revenues and $47 billion in assets. They’re going to be fine.
Neither New York’s nuclear industry nor the utilities industry should be passing on these costs to taxpayers, nor should state governments be picking up the corporate tab. These are costs that companies should cover, not citizens.
It’s time to end the bailouts of big business. For nuclear, if we really want to save it, then New York should put a price on carbon so that gas, coal and oil show their true cost on society. Until then, no amount of bailing out will stem the flow of freer fossil fuels. If this is about jobs, then these billions could be better spent on more reliable renewable industries in New York. If this is about a clean energy future, then figure out next-generation nuclear ASAP. But that is not happening with these bailouts. It’s a boon for big business while New York taxpayers pony up.
The writer, a Peekskill resident, teaches sustainable development at NYU’s Center for Global Affairs.