Nuclear Bailouts Are Uniting All in Disgust Over Corruption and Subsidies

Tom Shepstone
Shepstone Management Company, Inc.

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Nuclear bailouts became a thing suddenly over the last few years, and one is now proposed in Pennsylvania, but corruption and subsidies are revealing a scam.

One industry has been on tear recently in the race for government rent. Nuclear bailouts seem to have become the order of the day, in fact. But, just as suddenly, these nuclear bailouts have been revealed as ugly corrupt scams. Speakers of the House in two different states are now embroiled in criminal investigations over briberies they are accused of taking from the nuclear industry, which is under enormous financial pressure from natural gas. The solution, as the nuclear industry saw it, was to abandon free enterprise and start sucking money out the government. It very quickly spent hundreds of millions in several states attempting to fleece consumers. The predictable result of this cash infusion into politics has been major corruption.

Here is what’s happening in Ohio, as reported at Cleveland.com:

In the federal complaint that accuses Ohio House Speaker Larry Householder and four allies of engineering a $60 million bribery scheme, few people come out looking good. Tyler Fehrman, though, is one of them.

Fehrman, a Columbus political consultant listed as “CHS 1” in the complaint, alerted the FBI in September 2019 after claiming his friend Matt Borges, an ex-Ohio Republican Party chair who is charged in the case, offered him $15,000 to provide inside information about the campaign to hold a referendum repealing House Bill 6. Householder pushed through the bill, a billion-dollar nuclear plant bailout, with massive financial help from FirstEnergy Corp., the beneficiary of the measure.

Fehrman later wore a wire at the FBI’s behest, recording conversations with Borges that later became a significant part of the federal case against Borges, Householder, and three others.

And, here’s the summary from the criminal compliant itself:

nuclear bailoutsWhat’s especially interesting, though, is the description of how the whole thing allegedly began:

nuclear bailoutsSadly, the nuclear industry apparently chose the “legislative solution” or, as I prefer to describe it, the ratepayer ripoff. Now, even dopey Governor Mike DeWine, also a recipient of money from promoters of nuclear bailouts and a previous fan of the ratepayer ripoff has turned tail and no says he’s for a repeal of the outrageous subsidies delivered to the nuclear industry. Here’s a nice video to tell the story:

Electric utility ComEd has agreed to pay $200 million to resolve a federal criminal investigation into a long-running bribery scheme that implicates Illinois House Speaker Michael Madigan, long considered the state’s most powerful lawmaker.

Federal prosecutors said Friday the company has admitted that from 2011 to 2019 it arranged jobs, subcontracted work and monetary payments related to those jobs “for various associates of a high-level elected official for the state of Illinois.”

The U.S. attorney’s office identified the high-level elected official as “Public Official A” in a news release. A deferred prosecution agreement for ComEd filed in federal court states that “Public Official A” is the Illinois House speaker, but Madigan — a Chicago Democrat who is the longest-serving state House speaker in modern American history — is not mentioned by name.

Madigan’s spokesman, Steve Brown, couldn’t be reached for comment Friday and didn’t immediately respond to a voice message.

The U.S. attorney’s office scheduled a Friday afternoon news conference “to announce developments in a public corruption investigation.”

“Public Official A controlled what measures were called for a vote in the Illinois House of Representatives and exerted substantial influence over fellow lawmakers concerning legislation affecting ComEd,” the news release states.

Prosecutors say that during the time of the scheme, the Illinois General Assembly considered legislation that affected the company’s profitability, including regulatory processes used to determine rates the state’s largest electric utility charged customers.

The alleged bribery scheme was orchestrated “to influence and reward the official’s efforts to assist ComEd with respect to legislation concerning ComEd and its business,” prosecutors said. That included arranging jobs and vendor contracts for Madigan allies and workers, including for people who performed little or no work, appointing people to the company’s board at Madigan’s request and giving internships to students from his Chicago ward.

And, Ohio isn’t the only place where nuclear bailouts have tarnished the reputation of politicians. There’s also Illinois where corruption is worn like the robes of an emperor. Here’s some background from MarketWatch:

Electric utility ComEd has agreed to pay $200 million to resolve a federal criminal investigation into a long-running bribery scheme that implicates Illinois House Speaker Michael Madigan, long considered the state’s most powerful lawmaker.

Federal prosecutors said Friday the company has admitted that from 2011 to 2019 it arranged jobs, subcontracted work and monetary payments related to those jobs “for various associates of a high-level elected official for the state of Illinois.”

The U.S. attorney’s office identified the high-level elected official as “Public Official A” in a news release. A deferred prosecution agreement for ComEd filed in federal court states that “Public Official A” is the Illinois House speaker, but Madigan — a Chicago Democrat who is the longest-serving state House speaker in modern American history — is not mentioned by name…

Prosecutors say that during the time of the scheme, the Illinois General Assembly considered legislation that affected the company’s profitability, including regulatory processes used to determine rates the state’s largest electric utility charged customers.

The alleged bribery scheme was orchestrated “to influence and reward the official’s efforts to assist ComEd with respect to legislation concerning ComEd and its business,” prosecutors said. That included arranging jobs and vendor contracts for Madigan allies and workers, including for people who performed little or no work, appointing people to the company’s board at Madigan’s request and giving internships to students from his Chicago ward.

How nice. How thoroughly Chicagoan.

But, the nuclear industry is still working overtime to secure nuclear bailouts in places such as New Jersey, according to the Electrical Power Supply Association, an organization of its competitors whose customers will directly suffer from these outrageous, and apparently crooked, nuclear bailouts:

A proposal by utilities PSEG and Exelon could raise electricity costs for New Jersey customers by more than $605 million annually, according to new analysis released Wednesday by the independent monitor for PJM Interconnection, the power grid operator for 65 million customers in D.C. and 13 Mid-Atlantic states including the Garden State. The cost increase and reduced choice comes at exactly the wrong time as the state looks to recover from the financial impacts of the COVID-19 pandemic, said Todd Snitchler, president and CEO of the Electric Power Supply Association.

PJM Independent Market Monitor (IMM) Joe Bowring put forward 10 scenarios in comments to the New Jersey Board of Public Utilities. Bowring concluded that “Using any plausible interpretation of the PSEG and Exelon FRR proposal, costs to New Jersey customers will increase significantly compared to continued participation in the PJM Capacity Market.”

It appears the nuclear industry wants New Jersey to create its own electricity market. But, PSE&G, in addition to owning and operating nuclear plants, is also a very large utility in NJ. Talk about a conflict in interest; this would amount to the buyer and seller agreeing in ripoff electricity prices to subsidize a financially failing industry and take us one-step closer to a nationalized energy industry with no competition, ever-rising prices and a collapse of innovation and all controls over quality of service. It would turn the electricity business into Amtrak or worse.

nuclear bailouts

Incredibly, Pennsylvania is also entertaining this nonsense in the midst of the obvious:

Bills introduced in the state House and Senate last year would classify nuclear power plants under the alternative energy portfolio standards, with power from those plants to be purchased, and will help Pennsylvania workers retain jobs and help ensure a reliable source of power, said State Rep. Thomas Mehaffie III, R-Hershey, the prime sponsor of the House initiative.

The nuclear power industry lined up behind the bill, while the natural gas industry targeted the proposal, Mehaffie said.

When the Pennsylvania bills were introduced, “the lobbying from both sides was intense,” Mehaffie said. “You had people all over the place.”

The Pennsylvania Public Utilities Commission projected the changes to the alternative energy portfolio will cost customers between $460 million and $550 million a year. Both bills remain stalled in the consumer affairs committee. No vote is scheduled in either chamber.

I wrote about nuclear bailouts and what is proposed in Pennsylvania here, noting the proposal for the Keystone State would actually demand electric utilities purchase as much as half of their electricity from nuclear energy as if it were “alternative energy.” It’s hard to think of a more dastardly or stupid policy, but it’s easy to understand how the nuclear industry thinks they can get away with it after seeing what’s happened in Ohio and Illinois, isn’t it?

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