Environmentalists and Citizen Groups Are Fighting Billions in Subsidies Meant to Prop Up Aging Nuclear Plants

Climate change is forcing hard decisions about the future of energy. In the United States, aging nuclear power plants increasingly can't compete economically. More and more reactors will close without government subsidies, hence the industry push for massive bailouts to eke out a few more years of profits at ratepayers' expense.  

To justify this, nuclear plant owners are promoting themselves as “clean energy” and “zero emissions.” They argue they should be eligible for state clean energy contracts and state credits for being carbon-free. A few state governments are going along. Illinois and New York decided to bundle nuclear subsidies with renewable energy and emissions reduction programs. Other states like New Jersey and Connecticut are considering following suit. In all four states, the measures are highly controversial, meeting with intense opposition by everyone from consumer groups and environmental, to local governments and business associations.  

Environmental and citizens' groups downwind of these nuclear plants are especially infuriated by such specious claims. Aging, leaking, obsolete nuclear plants are not renewable, sustainable, emission-free or "clean." In fact, as they deteriorate and pile up more lethal radioactive waste, they are a growing threat to public safety and the environment. These plants are outmoded, at or near the end of their lives, and increasingly irrelevant to our energy supply. The billions subsidizing their corporate owners at ratepayer expense is money that can’t go toward ramping up real renewables and efficiency.

Yet if you casually read most news coverage of these nuclear subsidy programs, you’d get the impression that they are uncontroversial, and easily gaining general acceptance.

But you’d be wrong. Ratepayers and citizens have fought and continue to fight them hard, arguing they’re unfair, improper, and illegal. Legal challenges to the regulatory actions enabling these programs are moving through the courts.

New York is a case in point. Two weeks after the Federal Energy Regulatory Commission rejected a United States Department of Energy proposal for federal subsidies to prop up uncompetitive nuclear and coal plants, the New York State Supreme Court in Albany County rejected efforts to dismiss a lawsuit challenging billions in ratepayer subsidies for aging nuclear plants included in New York’s Clean Energy Standard. The case (Matter of Hudson River Sloop Clearwater v. NYS Public Service Commission, Albany County, 7242-16) is now headed to trial.

The suit was brought by small local businesses like Goshen Green Farm, NGOs like the Hudson River Sloop Clearwater and the Nuclear Information and Research Service, and about 60 other concerned citizens and groups. It argued that the New York State Public Service Commission failed to follow the law when it ordered what amounts to an illegal  bailout of up to $7.6 billion in ratepayer money, paid out over 12 years (2017 to 2029) to four aging upstate New York nuclear reactors: James A. Fitzpatrick, R.E. Ginna and Nine Mile Point Unit 1 and Unit 2.

To subsidize those plants, the PSC decision stuck New York ratepayers with some $40 million in extra charges on their monthly bills.  They have been paying those charges for nine months already, yet few are aware of what they’re for or where the money is going. The lawsuit says the PSC process that sprung them on ratepayers was flawed, failed to follow State rules, and ignored key facts about nuclear energy. It contends the nuclear subsidies aren’t just bad policy; they’re actually illegal.

The PSC, Exelon and other nuclear plant owners filed a motion to stop the case before it began, making various representations why it should be dismissed rather than heard.  But the Court rejected them, saying it refused “to entertain such discussions without the benefit of answers and the full administrative record.” In other words, the lawsuit will move forward and the question of whether these nuclear subsidies are legal will have to be decided on merits and evidence.

That’s a victory for democracy and the rule of law. It’s vitally important ratepayers on the hook for this $7.6 billion fiat have legal recourse and get their day in court. Denying the motion to dismiss the lawsuit ensures that they will.

Clean energy itself will not be on trial, despite the nuclear industry attempting to paint the lawsuit that way. No one disputes that New York’s goal of 50% renewable energy by 2030 and having state regulations to get there are vital for combatting climate change and building a sustainable future. The dispute is over whether using billions of dollars of ratepayers’ money to bail out aging, uncompetitive nuclear plants is a justifiable way to do it.

It's a David-vs-Goliath mismatch when a band of citizens’ groups takes on state government and giant nuclear corporations like Exelon. The Goliaths are used to getting their way. But let’s hope the fact that David won this round in New York is a sign of the times. Public interest and citizens’ groups in other states have been trying to get courts to hear similar arguments against nuclear subsidies. The fact that these arguments will get heard fully in New York indicates they are serious and triable. It’s time they got their day in court in other states, too.