Sunday, November 17, 2013

Unintended Consequences from Decommissioning Funds: Guest Post by John Alan Rodericks

Late last month, I wrote about my sorrow at Vermont Yankee closing in the post We are not Spock: Emotion and Nuclear Power, published at ANS Nuclear Cafe.  There were very insightful comments on that post, and they deserved further discussion.  I obtained permission to use some of these comments as guest posts on my own blog.  This comment is by John Alan Rodericks.

Thank you for this well-written and thoughtful post.

Account book 1909
I view this conversion of decom money to cash flow as THE issue of the future in this post-deregulated electric power generation world — an unintended consequence of an ill-conceived plan. As such, it echoes the theme that is prevailing in the electric power industry at this time… what was once the domicile of engineers is now the domain of accountants.

My estimates are that it will cost about $500-700 million to replace VY’s megawatts with a highly efficient gas-fired 2-and-1 combined cycle plant that will be dispatchable in much less time and have a much smaller staff (assuming they can get the needed natural gas capacity). However, this will come at the expense of fuel diversity and proper market function as margin prices become easier to manipulate thorough strategic and calculated fuel hedging. Pilgrim likely will not be far behind.

New England could well find itself in a mess and it will be too late to do anything about it.

John Alan Rodericks wrote this about himself and his post:

I have worked in electric power generation for 32 years with (former) Cambridge Electric Light Co. as a plant operator.... Although I have never worked in nuclear, I've read extensively about it and have a number of friends who have been in nukes for many years. I am disturbed by the trend which is developing in New England, despite the advent of supposedly abundant shale gas. In my time I've seen cycles play out, and view this as just another one.

I hope for a more thoughtful discussion about nuclear going forward, although Vermont Yankee seems like fait accompli. We must learn the lesson from it.


Anonymous said...

It's a bad rule that is misused to make it more profitable to tear down a valuable peice of national infrastructure than operate it. Dominion admitted as much when they decided to trash Kewaunee. They said they'd make more money tearing the place down than generating emissions-free, reliable piower. There is something wrong with that kind of system. Emissions-free, reliable energy should be valued more than making a hole in the ground, which generates nothing.

Meredith Angwin said...

I agree.