Customers protest fund switch by Constellation suitor Exelon

The dismantling of Exelon Corp.'s Zion Station nuclear power plant near Chicago is setting several remarkable precedents.

It's the biggest-ever nuclear decommissioning job in the United States, says Exelon, which is seeking permission to buy Constellation Energy and Baltimore Gas & Electric. The enterprise will take a decade, employing hundreds. Instead of separating the radioactive debris from the nonradioactive, the usual method, workers will ship most of the rubble to Utah and dump it in the desert. (Spent fuel will be encased in concrete and stay in Illinois.)

The project also looks like a radical new way for unregulated energy companies to siphon quasi-public money into private pockets.

In September, Exelon transferred almost all of Zion Station's assets — including a decommissioning trust fund worth about $800 million, collected from utility customers — to an unregulated nuclear-waste company in Utah.

That company, EnergySolutions, is tapping the fund to dismantle the plant and award itself profits of between 15 percent and 20 percent, according to what it has told investors. Profits could eventually reach $200 million or more, the company has said.

Illinois electricity customers have filed a lawsuit in U.S. District Court in Chicago to contest the deal.

They allege that the arrangement not only violates the law that restricts how the funds can be distributed but also leaves nobody looking after the interests of the ratepayers who put up the huge pot of money.

Whatever remains from the trust fund after decommissioning is supposed to be credited to customers of Commonwealth Edison, the Exelon-owned utility that once operated Zion Station. But the way things are going, you could pardon them for doubting that anything will be left.

"It belongs to us. We paid the money in the first place," said Nancy J. Thorner, a blogger and ComEd customer who is a plaintiff in the suit, said in an interview. "They're claiming 15 or 20 percent profit out of it. They're not supposed to get profit out of the decommissioning money we paid."

The plaintiffs, who seek class-action status, want to block improper trust fund payments to EnergySolutions and ensure that ComEd consumers get what they're due.

Exelon and EnergySolutions reject suggestions of impropriety. By using the Utah company's nuclear dump, they say, the deal will cost less and be completed sooner than if Exelon had managed the work itself.

"They have the tools, the resources, the waste facilities — everything they need to do it," Exelon spokeswoman Krista Lopykinski told me. "We would have waited until the decommissioning fund grew before we started the process."

EnergySolutions spokesman Mark Walker said the project "is good for the citizens of Illinois" and "subject to ongoing oversight by the United State Nuclear Regulatory Commission."

Before deregulation, the decommissioning of Zion Station and its two reactors would have been comparatively simple. ComEd would have hired contractors to dismantle the place, which was built in the 1970s and stopped operating in the 1990s. An independent trustee would have paid workers from the decommissioning fund. The Illinois Commerce Commission, which regulates utilities in that state, would have made sure consumers didn't get abused.

But parent Exelon took over Zion Station and other ComEd plants years ago. Now Exelon has given EnergySolutions not just the Zion Station trust fund but the plant's ownership title and operating license, too. It's the first time a nuclear-plant license has ever been transferred to a non-utility.

Who's protecting consumers' interest in the trust fund now?

Not us, says the Illinois Commerce Commission.

"I don't think we have any jurisdiction at all," said ICC spokeswoman Beth Bosch. "All those plants were spun off to an Exelon affiliate" after deregulation, she added, which put them beyond the ICC's reach. "And I don't know that we're even monitoring that case."

Not us, says the Nuclear Regulatory Commission.

Featured Stories

CTnow is using Facebook comments on stories. To comment on articles, sign into Facebook and enter your comment in the field below. Comments will appear in your Facebook News Feed unless you choose otherwise. To report spam or abuse, click the X next to the comment. For guidelines on commenting, click here.



Business Midday Get daily business news sent directly to your inbox for free weekdays at 1 p.m.

After signing in, click on your username at the top left of this screen and then on "My Newsletter Subscriptions."