Tuesday, March 28, 2000

Sentinel editorial: Some nuclear power plants would be worth more if they disappeared (3-28-00)

Decades ago, when there were lots of nuclear power plants on American utility drawing boards, the industry's promise was that the resultant electricity would be "too cheap to meter." Then, as the plants were built and began to age -- not always gracefully -- the electricity became too expensive to fathom. Today, many of those plants still generate electricity -- along with nuclear waste that no one knows what to do with -- but no new plants are planned or under construction.

Here in New England, the aging plants are becoming increasingly difficult to dispose of. They're difficult to sell, witness the stalled Vermont Yankee sale. It may not even be possible to give them away. Three plants, in Connecticut, Maine and Massachusetts, have been shut down for reasons of safety and economy. They no longer generate electricity; now they just sit there, generating losses for their owners.

Still, old attitudes die hard, and some people continue to imagine that foes of nuclear power are all bedraggled protesters, refugees from the 1960s. In fact, these days, a lot of them wear spiffy suits and sit on the boards of major utilities.

A case in point: In a few weeks, shareholders of New York-based Con Edison and Connecticut-based Northeast Utilities will vote on a merger. If they approve, Public Service Company of New Hampshire will be part of the combined company, to be called New Con Edison.

Con Edison and NU have sent out a thick report to shareholders, urging a yes vote on the merger. And the report notes that NU shareholders will receive more money for their stock -- a sort of bonus --if NU is somehow able to get rid of its nuclear plants in Connecticut. We were fascinated by the report's blunt -- if barely articulate -- analysis of the present state of nuclear power and its future prospects:

"Although Con Edison is an experienced nuclear operator and believes nuclear power to have meaningful commercial value, ownership of nuclear assets is not a primary component of Con Edison's strategy. In that regard, Con Edison remains concerned about the risks that can be associated with nuclear operations and market perceptions of them. The additional consideration payable upon satisfaction of the divestiture condition relating to the sale of Northeast's Millstone nuclear facilities reflects Con Edison's higher valuation of Northeast without the Millstone facilities due to concerns about nuclear operations, the adverse effect that nuclear operations have had on Northeast and the risks related to, and the potential adverse effect that those operations could have on, New Con Edison's and Northeast's results of operations. The divestiture condition and the additional consideration payable upon satisfaction of the condition also provides increased value to Northeast's shareholders."

In other words, remember all those utility-company promises about the wonders of clean, safe and inexpensive nuclear energy?

Never mind.


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