Analysis & Opinions -

Shutting Down Nuclear Plants is a Bad Bet for Ohio Consumers

| Nov. 05, 2017

On Mother's Day weekends, going back more than 30 years, I drive from my parents' house in Toledo to Magee Marsh, to see a stunning array of brilliantly colored warblers feed among the cottonwoods and box elders, gaining the strength they will need to cross Lake Erie during their spring migration. I know we are getting close when I see the cooling towers of the Davis-Besse nuclear power plant.

That unit, and the Perry plant near Cleveland, are the largest and most reliable power plants in the state, providing clean electricity 24 hours a day. But perhaps not for long.

Absent state action, Ohio could face the premature - and permanent - shutdown of both Perry and Davis-Besse as soon as next year. Say goodbye to 17 billion kilowatt-hours of carbon-free electricity generated every year. Multiply that loss by at least 20 more years of the plants' useful lives, and probably more, and you will realize what a big mistake that would be.

Here's one way to think about it. Imagine that every single-family house in Ohio, all 3.5 million of them, had rooftop solar panels. That's what it would take to generate the same amount of carbon-free electricity as the two nuclear plants. Now imagine ripping out all of those solar panels 20 years before the end of their useful life. Sounds wasteful, doesn't it?

The premature destruction of the nuclear plants would reduce Ohio's energy diversity, worsen air pollution, and raise electricity prices.

The Ohio legislature is considering a proposal to protect consumers from this outcome by creating "zero emission credits," which would appropriately compensate nuclear energy for not emitting carbon dioxide or other air pollutants. Illinois and New York recently approved similar measures to keep their nuclear plants running.

The Ohio proposal would add about 8 cents a day to a typical residential electricity bill. But closing the reactors would almost certainly cost consumers more in the long run. The plants are struggling financially today because the price of natural gas has fallen so far that it is - for now - cheaper than the reactors, assuming you do not value clean air or reliability. The problem is that once the nuclear plants close, they cannot be restarted. The shutdown decision is permanent, even if historically low natural gas prices may not be.

To be clear, low natural gas prices have been a boon to industry and consumers. But why put all our eggs in one basket? Diversity in energy supplies hedges against unexpected shortages or price hikes in any one energy source.

During the "polar vortex" of January 2014, for example, many natural gas and coal plants suffered outages just when electricity demand was surging to record levels. Meanwhile, operating nuclear power plants across the country kept running at near-full capacity and helped avoid blackouts during some of the coldest weather in memory.

Shutting down the reactors means Ohio consumers will be hit much harder when the unexpected happens.

And since renewables account for just three percent of Ohio's electricity generation, they cannot fill the breach that would be created by closing the Davis-Besse and Perry units.

We should also consider the economic impact. A recent analysis by the Brattle Group for Nuclear Matters showed that the plants contribute more than $500 million annually to Ohio's economy, supporting more than 4,000 jobs and producing $23 million in state and local tax revenues. Instead of supporting Ohio jobs and Ohio's economy, you'll be paying more for electricity produced in other states.

In short, shutting down the nuclear reactors could be a very expensive mistake. Especially if the federal government acts to limit carbon-dioxide emissions in the next 10 to 15 years, as many Republicans and Democrats already propose.

No one knows for sure what the future holds, but if past is prologue, then the clean air rules on power plants could get stricter, and unexpected weather and price contingencies will inevitably occur. When they do, the people of Illinois and New York will be glad that they paid a little more today to keep efficient nuclear plants running, rather than paying a lot more tomorrow to replace plants that have been prematurely closed.

Hopefully, Ohioans will reach the same conclusion.

For more information on this publication: Belfer Communications Office
For Academic Citation: Poneman, Daniel.“Shutting Down Nuclear Plants is a Bad Bet for Ohio Consumers.”, November 5, 2017.

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