By Ron Ulmer

I was recently asked, does Exelon need the surcharge to keep Clinton Nuclear Power Plant operating? My response was I do not know.

At Illinois Power, I was involved with 3 rate cases to have Clinton Nuclear power plant placed in rate base as well as Illinois’ electric deregulation years later, giving consumers the ability to choose their energy supplier, thereby placing competitive pressure on energy prices. Additionally, the large increase in the supply of natural gas in North America added a lower cost, cleaner fossil fuel to the energy supply mix. As a result we experienced downward pressure on energy prices.

Simultaneously, the government began to subsidize wind and solar energy coupled with stricter pollution regulations for coal fired generation that reduced the ability of the market to efficiently allocate resources. Exelon claims Clinton cannot compete with subsidized wind and solar energy. If the claims are true, resulting in closing Clinton, most likely the coal plants will replace the electric energy shortfall. How ironic that Nuclear Power plants will be replaced by emission producing coal plants that Nuclear replaced decades ago.

Solution, the subsidization of wind and solar energy needs to be terminated and efficient and effective taxes should be implemented on the emissions from fossil fuel plants equal to the cost of the environmental damage as well as denying Exelon’s surcharge request. These actions would make the playing field for energy supply as fair as possible. Markets, not taxpayer subsidies to wind and solar as well as no electric surcharge paid by electric consumers, would determine whether or not the Exelon plants operate.

The outcome is the desired amount of energy produced efficiently, at a lower price, with a reduced pollution level. Tax savings would result as no taxpayer money would go to subsidizing wind and solar, consumers would have lower electric bills as a result of no surcharge, smaller role for government, more freedom to producers and consumers. A win, win, win!

Ron Ulmer is an economist, have taught economics/finance at 3 central Illinois universities and employed by Illinois Power as a Senior Rate Analyst, supervisor of economic research, Market Program Manager. Now retired, Current member Normal Kiwanis, past 25 year member Optimist International Service Club, Property owner and manager in Normal for 37 years ongoing.   

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