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.]

I was not able to be there to gloat over the fact that this month Dominion was forced to close the Kewaunee reactor in Wisconsin. As the NY Times wrote about this plant’s closure:

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.

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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.

terminal-nuclear-industry

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About paxus

a funologist, memeticist and revolutionary. Can be found in the vanity bin of Wikipedia and in locations of imminent calamity. buckle up, there is going to be some rough sledding.

10 responses to “May is Kewaunee Closes”

  1. Loran says :

    Not clear what you are angry about. Are you angry that Dominion as a company just wants to make money? Are you angry that Dominion generates electricity using methods different from what you think they should use? Are you angry that Dominion engages in political lobbying to create conditions favorable to it? Angry that you only own two shares? Or just angry you couldn’t make the annual meeting this year?

    • paxus says :

      Thank you Loran for this clarifying question. i could do with one share for that is all i need to get into the shareholders mtg, but i am not angry about this. Dominion is a publicly regulated monopoly. I am angry that they have tremendous influence over energy legislation in the state, which is nearly universally to their benefit and to both their rate payers and the environments disadvantage.

      I am angry with Dominion because they have a functioning reactor in WI, which they are closing because they cant make it make economic sense to continue it, But they will build a brand new reactor in Virginia, of a design which has never been build before (basically insuring delays and cost overruns) and they will pass the cost of this easily foreseeable mistake on to its customers and tax payers. They will do this claiming that they are 1) interested in protecting the environment with nuclear and 2) keeping a diversity of fuel types. Both of which are clear lies, Dominion could care less about this thing, if it did not put them into this political game which allows them to “recover costs” for clearly no economic, centralizing and in the case of earthquake prone central Virginia dangerous reactors. And because they own the law makers, they are quite likely get their way.

      Best i can tell you think control of the world should be given over completely to corporations, perhaps because you think they will do a better job?

  2. Loran says :

    I think outcomes are generally better when people have a choice and when there is competition — this applies to schools, businesses, technology, etc. This is a quite different than saying “the world should be given over completely to corporations,” although corporations generally can do things more efficiently than governments.

    I’m angry at a number of the same things you are, Pax, but for different reasons. Utilities like Dominion are heavily regulated corporations. No surprise that such a regulated environment results in more lobbying, more corruption, and ultimately worse outcomes for customers.

    Ending government regulations of energy providers and laws which grant public monopoly status to them would be one way of ending the problems you are angry about. Perhaps your anger is misdirected, Pax?

    • paxus says :

      We certainly agree that government sanctioned monopolies are a bad thing. Tho one of the biggest windfalls of the nuclear power industry has been collecting for “stranded assets” when states deregulate.

      The problem is that corporations are designed to pass on “externalities” to who ever they can. So they are often acting as close to illegally as they can get away with, because that profit maximizes. This has some unfortunate side effects, like the planet dies.

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