Nuclear Industry Politics: Bribes, Corruption and Lies

The U.S. nuclear industry knows it can’t compete fairly on the open market with safe, clean, cost-effective renewable energy sources like solar, wind and storage batteries, so it’s turning to illegal and unsavory tactics. This year, a string of scandals has exposed how some utilities are willing to use bribes, corrupt politics and lies to keep aging reactors online and planned new plants alive.

  • In July, the FBI filed racketeering charges against the speaker of the Ohio House of Representatives for taking more than $60 million from FirstEnergy Corporation to ensure passage of legislation for a ratepayer bailout of the company’s nuclear plans, and for using bribery to quash a referendum to repeal the bailout.
  • The very next day, Commonwealth Edison Company, or ComEd, a subsidiary of Exelon, agreed to pay a $200 million fine to settle federal charges for bribing the speaker of the Illinois House to ensure passage of legislation that ensured a ratepayer bailout of two nuclear plants.
  • In February, the federal Securities and Exchange Commission, or SEC, filed a complaint against the owner of South Carolina Gas and Electric for lying to regulators and investors about progress of the V.C. Summer nuclear plant, cancelled in 2017 due to $13 billion in projected cost overruns and construction delays.

It’s no mystery why utilities resort to such unlawful and shady tactics: The risk is worth the payoff. Last year, an EWG analysis found that since 2016, five states, including Illinois and Ohio, have forced more than $15 billion In nuclear bailouts on ratepayers.

"When companies like ComEd and FirstEnergy have billions of dollars at stake, spending tens of millions of dollars on campaign contributions, bribes and other activities is sort of a down payment,” Howard Learner, executive director of Environmental Law and Policy Center, told Inside Climate News.

In Ohio, House Speaker Larry Householder and cronies created a political advocacy nonprofit, Generation Now, that they used to funnel bribes to hide the payments and the scheme from public scrutiny. The FBI said Householder and his associates used millions of FirstEnergy’s money to get candidates elected that would support him in his bid for speaker, and who would also vote to rescue the Perry and Davis-Besse nuclear plants – a bailout worth $1.3 billion to FirstEnergy.

They also took $38 million from FirstEnergy to hire firms to collect signatures to put the bailout-repeal referendum on the ballot, which would have been a prohibited conflict of interest for Householder. They tried to bribe a signature collector for inside information on the campaign, and gave a signature collection company $600,000, which the firm offered to pro-referendum collectors to get them to quit.

In Illinois, federal prosecutors say ComEd curried favor with House Speaker Mike Madigan by funneling more than $1.3 million over the past decade to his friends and associates. In return, ComEd was able to secure passage of a bill to make customers bail out the Cline and Quad Cities nuclear plants. In an op-ed for The Hill, conservative anti-tax crusader Grover Norquist said the deal will cost Illinois residents $2.4 billion.

“[T]he legislation would amount to the largest energy rate hike in U.S. history,” Norquist wrote. “The city of Chicago alone would see more than $127 million in higher energy costs.”   

In South Carolina, the SEC found that senior executives of SCANA, owner of South Carolina Gas and Electric, “repeatedly deceived investors, regulators, and the public over several years about the status of a $10 billion nuclear energy project,” the Summer nuclear plant. “When the truth was revealed, it resulted in hundreds of millions of dollars in losses to SCANA’s investors and to South Carolinians.” 

A result of SCANA’s lies is that South Carolina ratepayers will pay $2.3 billion to cover the sunk cost of the scrapped project.

“In the private sector, you would never be able to justify this,” Gregory Jackzo, former chair of the Nuclear Regulatory Commission, told The Intercept. “It’s insane for a project that’s done nothing, and never will. And is just a giant hole in the ground. Well, a filled-in hole now, at this point.”

In Ohio, state senators will convene a special session next month to consider repealing the bill that gave First Energy the $1 billion bailout. Illinois Gov. J.B. Pritzker has announced legislative initiatives to curb utility influence. But to stop the scandals plaguing energy politics – which are not limited to the nuclear industry – here’s what should be done:

  • Legislation to bail out uneconomic power plants should instead replace them with clean energy.  
  • Electric rates and policies should support aggressive energy efficiency and customer-owned and community solar programs to reduce costs, replace financially untenable plants and ensure least-cost service.
  • States should mandate reporting of all lobbying expenditures and campaign contributions. 

"If we get the corrupting influence of utility money out of politics,” David Pomerantz, executive director of the Energy and Policy Institute, told Inside Climate News, “I'll very happily take my chances with honest policy debates that engage the public, which broadly supports the rapid transition from fossil fuels to clean energy."

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