May is Kewaunee Closes
i missed the Dominion Resources shareholder meeting this year after having attended faithfully every year for perhaps half a dozen. Perhaps CEO Tom Farrell missed my annoying questions about how the utility which i own two shares of continues to waste money on plans for another reactor at North Anna, which will likely never be built. [I am told that Farrell finds annoying shareholder questions to be one of the most headachey part of his job, which i have to say gives me quite some satisfaction.]
The decision was viewed as an early sign that the wave of retirements of old generating stations across the Midwest is now stretching from the coal industry into nuclear power, driven by slack demand for energy and the low price of natural gas.
Also in this NYT article Dominion’s Farrell said of the closure of the plant:
“This decision was based purely on economics.”
It will not surprise people who watch nuclear power closely to hear that this is not what Dominion often says about how they make decisions. As with the North Anna 3 project we often hear that we need “a mix of fuels”. This is the marketing plan the PR people have cooked up to rationalize the poor economics of this plant. They are not doing it to make money for the company, they are doing it because it is important to have a diversified portfolio of energy types. Using this pathetic logic, Dominion should be opening day care centers where they were harnessing kids on treadmills.
No, the real reasons are always they same. They build reactors for the money, but the reason they can not be direct about it is because if it public where the money was coming from, there would be additional problems. For example, the utilities in Georgia and Florida are able to charge their customers now for reactors they are in the process of building or even some that they are thinking about building.
Then there are other tricks, like the “stranded assets” gambit, where the utility says “We built these reactors thinking we were a monopoly, and now that you are changing the rules and we are not a monopoly, we should get the profits from these poor investments as if the market did not exist.” As crazy as this sounds, this scheme has resulted in hundreds of billions of dollars being transferred from rate payers to utilities.
How Dominion’s plans to make money on North Anna 3 is not completely clear. But rest assured it is not because they think there will be a carbon tax in the US (this was used as a justification for a while) and not because they believe they need to keep all options open (otherwise they would be more serious about renewables). Dominion is not the largest contributor to political campaigns in the state of Virginia because it feels candidates don’t have enough money to run their campaigns. The reason is that they have a clever plan to bilk customers (and sometimes the state) for money and they are confident that they can pull it off.