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The Almighty Buck Power

Central New York Nuclear Plants Struggle To Avoid Financial Meltdown 270

Posted by samzenpus
from the keeping-the-lights-on dept.
mdsolar writes "As recently as four years ago, nuclear power companies were planning to spend billions of dollars to build a new reactor in Oswego County, alongside three existing nuclear plants. Then the bottom fell out. Natural gas-burning power plants that benefit from a glut of cheap gas produced by hydrofracking cut wholesale electricity prices in half. Now the outlook for nuclear power plants is so bleak that Wall Street analysts say one or more Upstate nuclear plants could go out of business if conditions don't change. Two Upstate nukes in particular — the James A. FitzPatrick Nuclear Power Plant in Oswego County and the R.E. Ginna Nuclear Power Plant in nearby Wayne County — are high on the watch list of plants that industry experts say are at risk of closing for economic reasons."
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Central New York Nuclear Plants Struggle To Avoid Financial Meltdown

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  • So... (Score:5, Funny)

    by fuzzyfuzzyfungus (1223518) on Monday September 30, 2013 @08:56AM (#44990979) Journal
    I see 'Wall Street analysts' and 'meltdown' in the same sentence. I should probably just bend over and subsidize somebody, to get it over with, right?

    Who's it going to be this time?
    • Re:So... (Score:5, Insightful)

      by serviscope_minor (664417) on Monday September 30, 2013 @09:20AM (#44991227) Journal

      Who's it going to be this time?

      Gas. You're already subsidizing gas in that the government is providing a free license to trash the place with fracking and will eventually (i.e. you eventually) have to pay for the cleanup. They get to keep the profit.

      The invisible hand: grabbing you by the balls since 1764.

      • Re: (Score:3, Insightful)

        by jbmartin6 (1232050)

        government is providing a free license to trash the place with fracking

        Smith's 'invisible hand' has no relation to government shielding favored businesses from the costs of their process. If you are going to blame some for grabbing you by the balls, please take a look down and see whose hand it is.

        • Re:So... (Score:5, Insightful)

          by serviscope_minor (664417) on Monday September 30, 2013 @10:28AM (#44991787) Journal

          mith's 'invisible hand' has no relation to government shielding favored businesses from the costs of their process.

          Depends on how you define "cost". It doesn't cost you anything to dump whatever crap you want into the air and water unless government regulation imposes a cost on you. Your results may cause others to incur costs. The thing is the invisible hand of the free market doesn't actually work well in this situation because it's a situation where people can save money by making others incur costs indirectly.

        • Re: (Score:2, Insightful)

          by mspohr (589790)

          The "invisible hand" includes all of the factors which influence decisions. This includes both private profit motives as well as government regulations.
          So in the case of fracking, the fact that the government has created a favorable legal environment (loose regulations, shielding from liability, tax incentives, etc.) all factor into the decision by the private sector to invest in this profitable activity. The fact that the government is doing a poor job of regulation (exemption from clean water laws, for ex

      • Re:So... (Score:5, Insightful)

        by green is the enemy (3021751) on Monday September 30, 2013 @10:38AM (#44991865)
        Letting a short-term downturn in natural gas prices ruin other established energy producers just strikes me as unwise. Reliable energy infrastructure, like nuclear power, takes decades to build up. Natural gas prices are volatile. It may be cheap now, and may easily double or quadruple again in the near future for unforeseen reasons. Nuclear power is not volatile like this.
  • by Anonymous Coward

    cheap gas produced by hydrofracking cut wholesale electricity prices in half

    If this trend holds up, soon we'll have energy too cheap to meter!

  • by Anonymous Coward on Monday September 30, 2013 @09:02AM (#44991045)

    Am I alone in wondering why the cost to the consumer remains the same?

    • What the market (the top 20% anyway)* will bear...

      *They're the bastards who set prices for the rest of us

    • Regulated monopolies (Score:5, Informative)

      by sjbe (173966) on Monday September 30, 2013 @09:58AM (#44991543)

      Am I alone in wondering why the cost to the consumer remains the same?

      Power utilities are regulated and the prices they charge to consumers are typically regulated as well. Since in most areas they are a monopoly you should expect them to charge the highest amount permitted by the local regulating body and not a penny less. Not like you can go anywhere else. Where I live I have precisely one option for electricity and one option for natural gas. The power company knows this and behaves accordingly. Even in areas where there is more than one option they basically are an oligopoly which isn't much different from a pricing standpoint. They all know there is little incentive to compete.

      • The location I live in has "choice" for natural gas and electricity - want to guess on how much we consumers are saving because we have that "choice"?

        On the other hand we do reap the benefits have having far less reliable electric service that takes far longer to recover from an outage

        I love those feel-good bullshit stories about line crews from other areas going into a storm hit location to help repair the outages....the electric companies have to do this because they have laid-off so many line crews that

    • by shentino (1139071)

      You are. The rest of us already know we're getting screwed.

  • Next up: "Rather Mundane Story Attempts to Get Attention via Sensational Headline"
  • Scary (Score:5, Insightful)

    by gwstuff (2067112) on Monday September 30, 2013 @09:06AM (#44991085)

    So what happens when a nuclear plant runs into financial difficulty? You cut your reactor monitoring staff? Drop to the cheap disaster management plan? Postpone the upgrade of the creaky boilers?

    • by polar red (215081)

      So what happens when a nuclear plant runs into financial difficulty? You cut your reactor monitoring staff? Drop to the cheap disaster management plan? Postpone the upgrade of the creaky boilers?

      when they run into financial difficulty? or when they want to increase their profits?

    • So what happens when a nuclear plant runs into financial difficulty?

      It gets decommissioned. Still expensive but less expensive than operating at a significant loss over time. Nuke plants aren't like gas or coal plants where they can be mothballed and then restarted later easily. (I'm sure it's technically possible but apparently very problematic)

      • by afidel (530433)

        Mothballing a nuclear plant shouldn't be an issue at all, many plants have stayed offline for a year or more due to regulatory problems, if they can be kept offline for one year I can't see why they can't be kept offline for 5 and be brought online in the same manner. It's not like the startup procedure cares how long its been since the last criticality event.

        • Because radiation causes things to get brittle and break down quicker.

        • Mothballing a nuclear plant shouldn't be an issue at all, many plants have stayed offline for a year or more due to regulatory problems, if they can be kept offline for one year I can't see why they can't be kept offline for 5

          There are a lot of costs with keeping them offline. Personnel, servicing, inspections, security, and lots of other high fixed costs that don't go away just because the plant is not producing electricity. For a relatively short time it might make sense to bear these costs but for periods of more than 1-2 years the economics start to look really bad. Nuke plants have huge operating expenses and they generate not a dime of profit unless they are producing electricity. Would you shut down your business for

    • by mdsolar (1045926)
      At Vermont Yankee, they tried all three, cutting staff, getting out of requirements to install sirens and deferred maintenance that led to a cooling tower collapse and radioactive materials leaks.
  • Two worlds collide (Score:5, Informative)

    by BlackPignouf (1017012) on Monday September 30, 2013 @09:18AM (#44991215)

    Two worlds collide :

    In order to plan an energy strategy, you need to look 20-30 years ahead.
    In order to avoid financial meltdown, you need to make Wall Street happy before next quarter.

  • by jdev (227251) on Monday September 30, 2013 @09:33AM (#44991343)

    The long run problem here is that natural gas prices are highly volatile. Prices are super cheap right now because of a big increase in supply while demand doesn't change much and storage costs are big. Prices may stay low for a few years, but nobody knows what will happen later. If we ramp up electricity production through natural gas though, that will increase demand driving up prices again. When natural gas prices go back up, that could be rough on consumers.

    Here's a graph highlighting gas prices over the past 40 years [ourfiniteworld.com].

    • by mdsolar (1045926)
      That is likely going to come to an end. Synthesis of methane using ultra-cheap renewable energy such as stranded wind will likely stabilize gas prices at a low level going forward.
    • by bobbied (2522392)

      Fracking seems to promise a continued glut of domestic Natural gas supply into the next few decades. Fracking has been the greatest single downward impact on Natural Gas prices domestically over the last decade. Consumption of NG is going up rapidly for electric generation, but domestic production has out stripped consumption, which has drastically lowered NG prices.

      Developing natural gas production takes years. Drilling wells, building pipelines, constructing processing plants all take multiple years to

  • "Natural gas-burning power plants that benefit from a glut of cheap gas produced by hydrofracking cut wholesale electricity prices in half." ... while retail electricity rates continued to rise...

    • by bobbied (2522392)

      Retail electric rates where I live have been steadily falling over the last decade. Of course, they've not fallen as much as NG prices, but I don't expect that.

      So, I don't know where you live, but here in Texas I've seen the available electric rates continue to fall, and if you consider inflation, drop significantly over at least the last 5 years. It used to be that $0.20 kw/h was about the average rate, but now you can get $0.12 without trying hard and I've seen plans where they give you electricity fo

  • I would thank you to never use the terms "nuclear plants" and "meltdown" in the same sentence unless you're talking about a LITERAL MELTDOWN.

  • by nimbius (983462) on Monday September 30, 2013 @09:44AM (#44991423) Homepage
    nuclear and other power plants should not be allowed construction without adequate consideration of cleanup cost. as it stands, superfund is a joke considering an insolvent or nonexistant subsidiary deprecated after the working lifespan of a reactor just lets the government foot the cleanup bill under the guise that its insolvent or nonexistent.
    https://en.wikipedia.org/wiki/Superfund [wikipedia.org]
    in TFA the James A. FitzPatrick Nuclear Power Plant is arguably at the end of its useable lifespan (30-40 years.) Coincidentally so is the Ginna plant. for those keeping track of the joke that is Nuclear Regulation in america, both have been given a 30 year extension despite having gone from megawatt to gigawatt in their installed versus actual capacity. the reactor cleanup cost would likely go to Entergy...who would either declare bankruptcy or drag the government and mohawk energy (a prior owner) into court over potentially responsible party definition as that would determine who has to clean things up. if Mohawk were to declare themselves insolvent, or the PRP could not be identified in court, the entire site would become an orphan share. that means no one has to clean it up but the taxpayer out of the congressional general fund. its lemon socialism.

    Entergy likely understands the cost to litigate its way out of a superfund cleanup is way cheaper than actually cleaning a nuclear site and once its absolved of cleanup, it can focus on investing in the gas fracturing movement, which is likely vastly more lucrative than maintaining 40 year old nuclear sites.
    • There is an old joke: The problem with Socialism is that eventually you run out of other people's money.

    • by iggymanz (596061)

      you forget the hidden costs of coal and oil (in dollars and human life) is astronomical in comparison to nuclear.

    • by TubeSteak (669689) on Monday September 30, 2013 @11:26AM (#44992431) Journal

      nuclear and other power plants should not be allowed construction without adequate consideration of cleanup cost. as it stands, superfund is a joke

      Superfund has absofuckinglutely nothing to do with cleaning up nuclear plants.
      I'm surprised there are so many people who modded up a fundamentally wrong post.

      http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/decommissioning.html [nrc.gov]

      Decommissioning Funds

      Each nuclear power plant licensee must report to the NRC every two years the status of its decommissioning funding for each reactor or share of a reactor that it owns. The report must estimate the minimum amount needed for decommissioning by using the formulas found in 10 CFR 50.75(c). Licensees may alternatively determine a site-specific funding estimate, provided that amount is greater than the generic decommissioning estimate. Although there are many factors that affect reactor decommissioning costs, generally they range from $300 million to $400 million. Approximately 70 percent of licensees are authorized to accumulate decommissioning funds over the operating life of their plants. These owners -- generally traditional, rate-regulated electric utilities or indirectly regulated generation companies -- are not required today to have all of the funds needed for decommissioning. The remaining licensees must provide financial assurance through other methods such as prepaid decommissioning funds and/or a surety method or guarantee. The staff performs an independent analysis of each of these reports to determine whether licensees are providing reasonable "decommissioning funding assurance" for radiological decommissioning of the reactor at the permanent termination of operation.

      Before a nuclear power plant begins operations, the licensee must establish or obtain a financial mechanism -- such as a trust fund or a guarantee from its parent company -- to ensure that there will be sufficient money to pay for the ultimate decommissioning of the facility.

  • by Jawnn (445279) on Monday September 30, 2013 @09:51AM (#44991483)
    ...that all the "clean, safe, and cheap" promises were just so much bullshit? And that the hustle still continues now that it's time to pay for cleaning up the mess they made? I am shocked. Shocked, I tell you.
  • by ssam (2723487) on Monday September 30, 2013 @10:18AM (#44991721)

    If every nuclear story needs 'meltdown' in the title, I propose every natural gas story gets 'explode'. This will help remind us of the thousands of people blown up in oil and gas accidents.

    Natural gas, the explosive financial opportunity.

  • by tatman (1076111) on Monday September 30, 2013 @10:59AM (#44992115) Homepage

    I think that this could be good for energy industry because it could open the door to other means for producing energy. Nuclear reactor operators have opposed technologies that improve our energy grid because of the costs associated with running nuclear reactors. But they may have lost the battle anyways.

    I think our energy policy that demands big massive producers are they only source of energy is wrong. And its strategically dangerous as well.

    For the record, I'm not opposed to nuclear energy. I just don't believe an energy policy solely relying on big business is in the consumers nor countries best interest.

  • Why didn't the consumers see any of this? My rates keep going up, up, up....

"The medium is the message." -- Marshall McLuhan

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