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Need to formally establish a planned economic mitigation fund for reactor communities in Illinois via NEIS

ince Exelon’s unilateral closure of the twin-Zion nuclear reactor in 1997, NEIS has urged public officials at all levels to plan and establish economic mitigation funds to prepare for the negative consequences of the abrupt loss of tax revenue and jobs in affected reactor communities resulting from such closures. To date, we have seen nothing that rectifies this adverse economic impact eventuality. Just as the U.S. did in Iraq – we have no “exit strategy.” Consequently all future hand-wringing about economic disruption as a result of reactor closures is really more a matter of “self-fulfilling prophecy,” than crisis requiring immediate and ill-thought- out, knee-jerk response. We believe that this situation can best be rectified by State legislation, for uniformity and planning.

Further, in a period of energy transition such as the nation and world are currently experiencing, it is natural and inevitable and should be recognized that some jobs will and must be transitioned, changed or lost. Illinois no longer supports the families of unemployed blacksmiths or clipper ship sailors. While acting responsibly to help workers transition into new jobs and fields, the State should not succumb to legalizing extortive practices from large “company town” employers like Exelon Corporation. Instead, it should responsibly plan and assist ways to facilitate the job transitions with the minimal disruption to workers and local economies. Subsidizing annual jobs-hostage crises — the inevitable consequence of caving to Exelon’s current demands — is not responsible governance, nor acceptable fiduciary practice.

As NEIS has pointed out repeatedly, there are numerous ways that reactors can close, some anticipated, some unexpected, some outright immediate. Because of the latter, it is incumbent on responsible public officials at the local and state levels to take measures in advance which mitigate the negative effects of the inevitable closures.

We list the many possible ways for reactors to close:

• Unexpected major accident, resulting in immediate and presumably premature closure
• An NRC ordered shut down
• Exelon’s unilateral decision to close a plant on economic or other grounds, as it did at Zion, resulting in an immediate loss of about 55% of Zion’s tax base
• Devaluation through sale, as occurred at the Clinton station, resulting in enormous loss of tax base
• Eventual old-age, license expiration closure (the outcome most hoped for after 40-60 years)

[…]
Recommendation: Planning for some kind of eventual closure must be made long before it happens to minimize economic and service disruptions to the entities whose tax base will be affected. Current debate about the reactor license extensions for Exelon’s Byron and Braidwood reactors, and Exelon’s threat to close as many as five of its Illinois reactors serve as a reminder of this need, and an opportunity to take action. We recommend that dependent governmental and taxing entities begin formal negotiations with Exelon to establish an escrowed “closure mitigation/just-transition fund,” based on some mutually agreeable assessment and payment structure, so that dependent entities will have some kind of defined temporary funding stream available to soften the economic blow of closure, and not radically disrupt essential services.

[…]
Such programs have already been established between the U.S. Dept. of Energy and local communities around DOE sites. In the early 90’s after several federal nuclear weapons production sites were closed, Sen. John Glenn drafted legislation that established a worker and community transition and worker medical monitoring programs in the Energy Department ( Sections 3161& 3162 of the FY 1992 Defense Authorization Act). The law provided funds for worker training for site cleanup, medical follow-up of current and former workers, transfer of assets for community reuse, and payment in to local jurisdictions lieu of taxes.

An example of what NEIS suggests is found in our comments to the Nuclear Regulatory Commission on the proposed re-licensing of the Byron and Braidwood nuclear plants:

Comment 2: Analysis of socio-economic impacts are incomplete. No analysis of impacts of early or unexpected closure are considered or provided.

The Exelon ER documents a significant local tax impact for the presence of the Braidwood Nuclear Station, yet only addresses the positive impacts. No mention or analysis of negative impacts resulting from abrupt, planned, or unexpected early closure of Braidwood is presented. This is a significant omission.

According to the Exelon ER Braidwood represents less than 2% of the Will County total tax base, roughly $20 million annually for the years 2008 through 2010. However, it accounts for upwards of 78% of the Reed-Custer School District 255U’s adjusted property tax levy. These are not insignificant amounts for the local communities around Braidwood, as opposed to the county as a whole. Their abrupt disappearance would wreak local economic havoc on the affected governmental and essential service entities’ ability to operate; while leaving Will County as a whole largely unaffected.

The ER either fails to recognize or mention at all some of the possible events that could result in such a situation:

• Unexpected major accident, resulting in immediate and presumably premature closure
• NRC ordered shut down
• Exelon’s unilateral decision to close the plant on economic or other grounds, as it did at Zion, resulting in an immediate loss of about 55% of Zion’s tax base
• Devaluation through sale, as occurred at the Clinton station, resulting in enormous loss of tax base
• Eventual old-age, license expiration closure (the outcome most hoped for)

[…]

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