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Nuclear Front Groups Spread Disinformation to Cover Industry Assets
Nuclear power, which accounts for 19 percent of the nation's electricity generation, is facing some serious challenges. Not only did its hoped-for renaissance fizzle out, four reactors shut down last year, another is closing this fall, and the nuclear giant Exelon says it will announce plant closings by the end of this year if market conditions don't improve.
Indeed, market conditions have not been good for Exelon, which owns 23 reactors at 14 plant sites, making it the largest nuclear plant operator in the country. Although the company netted $1.16 billion on revenues of $23.5 billion from all of its energy holdings in 2013, none of the Chicago-based company's six Illinois nuclear plants turned a profit in the last five years, according to a recent Chicago Tribune investigation. At least three of those plants are reportedly on the chopping block.
Photo courtesy of Shutterstock
Why is the nuclear industry in such dire straits? Mainly because of cheap natural gas and dampened electricity demand due to energy efficiency programs and a sluggish economy. The most vulnerable plants are in states with deregulated electricity markets, such as Illinois. Unlike regulated utilities, which are guaranteed an annual rate of return, these "merchant" plants sell power on the wholesale market and are being underpriced by their competition.
To try to stanch the bleeding, Exelon recently launched a front group, Nuclear Matters, to sell the public on the need to keep the remaining U.S. fleet of some 100 reactors running. According to its website, the group rests its argument largely on the fact that nuclear plants run 24/7 and don't emit carbon or traditional air pollutants, and insists that efforts to address global warming will be foiled if any reactors close. The website also lists some of the commonly cited reasons for the industry's current plight, but, echoing Exelon, also blames federal and state policies that support wind and solar power, which it claims "distorts" electricity markets. Not only is that a dubious assertion, it's especially ironic given the nuclear industry would not be economically viable without more than 50 years of federal subsidies, many of which continue to this day.
A New York public relations firm, Sloane & Company, is managing Nuclear Matters for Exelon. Since the group's launch in March, the agency has placed full-page ads and op-eds in a range of publications and recruited an impressive array of former public officials to plead the company's case. Former Sens. Evan Bayh (D-IN) and Judd Gregg (R-NH) were on board at the beginning as co-chairs. They were soon joined by former Secretary of Commerce and White House Chief of Staff William Daley, former Energy Secretary and Sen. Spencer Abraham (R-MI), former Sen. Blanche Lincoln (D-AR), and former Clinton Environmental Protection Agency (EPA) Administrator Carol Browner, who served as the Obama Administration's climate adviser.
Why start a front group? For the same reason the industry trade association Nuclear Energy Institute (NEI) hired the Hill & Knowlton PR agency eight years ago to create the faux grassroots Clean and Safe Energy Coalition and tap former EPA Administrator Christine Todd Whitman to be its primary spokesperson. Who is the public going to believe? A former EPA administrator or NEI CEO Marv Fertel? A former U.S. senator or Exelon CEO Christopher Crane? More than likely the former government officials, especially if they don't disclose the fact that the nuclear industry is paying them to advance its agenda.
Front groups are certainly not unique to the nuclear industry. Over the last decade or so, for instance, ExxonMobil and Charles and David Koch, owners of the coal, oil and gas conglomerate Koch Industries, have given tens of millions of dollars to dozens of self-described "free market" think tanks to spread disinformation about climate change and attack renewable energy. Unlike those think tanks, however, neither Nuclear Matters or the CASEnergy Coalition are bona fide organizations with staffs and brick and mortar offices. They are nothing more than PR agency-managed websites with high-profile paid spokespeople in tow. The other big difference is those fossil fuel industry-funded think tanks don't have a code of ethics. The public relations industry does, and both Sloane & Company and Hill & Knowlton are violating it.
The industry's code of ethics, developed by the Public Relations Society of America (PRSA), includes a section on transparency. To build public trust and ensure informed policymaking, PRSA's code states it is imperative that PR professionals disclose all pertinent information. Among other things, they should "reveal the sponsors for causes and interests represented" and "disclose financial interest ... in a client's organization." PRSA then provides some examples of improper conduct under this provision. The first one is front groups, when a PR firm, for example, "implements 'grass roots' campaigns...."
Thus far, Sloane & Company has been glossing over the fact that Nuclear Matters is financed by Exelon. There's no mention of Exelon's funding on the group's website, and none of Nuclear Matters' press releases to date cite Exelon at all.
Fortunately a number of reporters who have written about Nuclear Matters have at least mentioned that the group is a creature of the nuclear industry, and some have directly cited Exelon's role, thanks in part to a press release disclosing the connection from the Nuclear Information and Resource Service. But reporters paid attention early on to the fact that NEI was behind the CASEnergy Coalition, and then, over the ensuing months and years, neglected to point out that Whitman was actually speaking on behalf of the nuclear industry, not some independent grassroots group that promotes "clean and safe energy."
In any case, reporters can't completely make up for columnists and other commentators who fail to reference Exelon or misrepresent Nuclear Matters to enhance its credibility. In late March, Nuclear Matters Co-Chairmen Bayh and Gregg wrote an op-ed laying out the group's argument for The Hill, a newspaper that covers Congress. The authors' bios at the end of the piece didn't mention that Exelon is underwriting their campaign. Meanwhile, in early May, Sen. Lamar Alexander (R-TN) wrote a Wall Street Journal column attacking a key federal wind tax break that Exelon wants Congress to kill. A longtime nuclear power proponent, Alexander called Nuclear Matters an "environmental" group.
Exelon Already Holds Sway in Washington
Nuclear Matters is just the latest gambit of a very powerful political player. Over the last five years, Exelon has spent millions on political candidates and tens of millions on lobbying, and has taken advantage of its close ties with the Obama Administration to weaken or stymie stronger nuclear plant safeguards.
According to the nonpartisan Center for Responsive Politics, Exelon has spent nearly $8 million on political campaigns since 2008, more than any other private electric utility. Over that same time period, Exelon also spent $34.6 million on lobbying, putting it in the top 10 among electric utilities. In addition, Exelon is one of the biggest corporate donors to trade associations, pro-business alliances and other politically active nonprofits, according to a January report by the Center for Public Integrity. In 2012, Exelon gave $13.6 million to approximately two dozen nonprofits, the second-largest amount voluntarily disclosed among the Fortune 300 companies CPI reviewed.
Exelon's lobbyists also have enjoyed unparalleled access to the Obama Administration, according to an Aug. 2012 New York Times exposé. The Times provided several examples of how the company exerted its influence, including delaying and weakening a proposed EPA rule to prevent power plant water intake systems from killing fish and other aquatic life.
The Times also reported that Exelon joined with NEI and other plant owners to challenge the NRC's post-Fukushima safety recommendations. Specifically, they opposed a proposed requirement that they install filters on hardened vents at 31 boiling water reactors to help prevent radiation discharges into the environment in the event of an accident. Those reactors are similar in design to the six at the Fukushima facility.
Filtered vents are now required in Japan and much of Europe, and the Nuclear Regulatory Commission technical staff recommended they be installed here. But Exelon and the rest of the U.S. nuclear industry, loathe to spend hundreds of millions of dollars on filters, insist there are other ways to achieve the same result and lobbied hard to avoid the upgrade.
In early 2013, more than 50 of the industry's friends in Congress sent letters to the NRC requesting that the commissioners reject the filtered vent recommendation and slow down the implementation of other post-Fukushima safety reforms. A number of the signatories have reactors in or near their districts, and most have received sizeable campaign contributions from the nuclear industry. Two sign-on letters, for example, came from House members, one from 21 Republicans and the other from 26 Democrats. Since 2008, the nuclear industry gave more than $3.32 million to the 41 of the letters' 47 signatories. Roughly 30 percent of that funding came from Exelon.
The industry prevailed—for the time being. Despite the fact that the NRC technical staff provided ample evidence that filtered vents are a sensible, cost-effective measure that would protect nearby communities, NRC commissioners issued an order requiring owners of the 31 reactors to upgrade their hardened vents that stopped short of requiring filters. Instead, the commissioners gave their staff two years to review all the options for reducing radiation releases. The NRC will then open the proposed rule to public comment and finalize it by the end of 2017.
A Tool to Squelch Renewables?
Exelon and NEI clearly know their way around Washington. But some arguments sound a lot less self-serving when they appear to come from a disinterested third-party. A case in point is Nuclear Matters' contention that the U.S. has to maintain its entire fleet of nuclear power plants to stave off the worst consequences of global warming.
To be sure, nuclear power is the largest source of low-carbon electricity in the country, a major selling point. But Nuclear Matters' website ominously warns that "the closings of just a handful of nuclear energy plants would have a devastating environmental impact on our country and make it nearly impossible for us to meet our clean energy or carbon reduction goals."
Is that right? Not quite. As it turns out, ramping up renewables—especially wind and solar—and energy efficiency could replace a significant amount of nuclear generation, and do it in a hurry.
Let's look at the numbers. What would happen if Exelon closed the five reactors in Illinois that energy analysts have identified as ripe for retirement? The five reactor—one at Clinton and two each at Byron and Quad Cities—have a rated capacity of 5,203 megawatts (MW).
In 2012 alone, the U.S. wind industry installed the functional equivalent. It added 13,131 MW of new capacity, which, at a 35 percent capacity factor—that is, the percentage of time the generator is actually producing power—would produce about the same amount of electricity as Exelon's five reactors operating at a 90 percent capacity factor. According to the American Wind Energy Association, there is currently 17,200 MW of new wind capacity under construction or with signed power purchase agreements that will be built over the next two to three years. Those wind farms will produce the equivalent output of more than six typical 1,100 MW nuclear reactors.
Now add solar power to the mix. According the Solar Energy Industries Association, the solar industry installed 8,120 MW of new capacity in 2012 and 2013, and is projected to install another 25,000 MW by 2016, which altogether will produce the equivalent output of about seven nuclear reactors.
And let's not forget energy efficiency. The American Council for an Energy Efficient Economy projects that by 2020, existing energy efficiency resources standards in 26 states will save the equivalent output of more than 27 reactors.
In other words, renewables and efficiency could go a long way to replace nuclear plants—and retiring coal plants—to dramatically reduce U.S. carbon emissions. While more transmission capacity would be needed for wind and utility-scale solar projects, there is progress on this front. In addition to four new transmission projects constructed last year, which could support 10,000 MW of new wind capacity, there are 15 projects in advanced stages of development that could support an additional 60,000 MW of wind in Plains, Midwestern and Western states by 2018. These transmission projects also could open up new markets for nuclear plants.
But you're not going to hear about the potential of renewables and energy efficiency from Nuclear Matters. Exelon started the front group for the same reason NEI created the CASEnergy Coalition: to prop up the nuclear industry. And not only does Exelon want state and federal authorities to rescue its financially ailing reactors, it also has another goal in mind. A key component of Exelon's game plan is to hamstring its low-carbon competition, namely the wind and solar industries.
Elliott Negin is the director of news and commentary at the Union of Concerned Scientists. Steve Clemmer, UCS director of energy research and analysis, and Mike Jacobs, a UCS senior energy analyst, contributed to this blog. Correction: This blog has been corrected to reflect the fact that it is not clear that Nuclear Matters’ spokespeople are being paid for their services.
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