John Rowe, chairman and CEO of Exelon Corp., is seen at the National Summit in Detroit, Monday, June 15, 2009. (AP Photo/Carlos Osorio) Credit: Associated Press

Until 2012 John Rowe served as CEO of Exelon Corp., one of the country’s biggest power companies and parent of utility company ComEd. He was known as a colorful and prominent energy chief executive, who invested in wind, solar and the smart grid while also wielding his considerable political clout to aggressively champion nuclear power.

Rowe’s main focus now is promoting charter schools. He teaches history at a Chicago charter school which he co-founded with retired ComEd CEO Frank Clark.

Midwest Energy News spoke with Rowe at the Energy Thought Summit in Chicago July 22, about the future of nuclear power and the energy landscape more broadly.

Midwest Energy News: Where do you see the generation system headed, including the future of nuclear?

Rowe: I am not an Exelon insider anymore – I don’t speak for them or necessarily know everything they’re doing. With that caveat, it’s pretty clear to me the generation system is moving in the direction of blends of natural gas and renewables. It’s clear old coal will be around for q while but it’s shrinking. New coal is not economic, new nuclear is not economic. Wind and solar will be subsidized even when they’re not economic.

So we’re looking at blends of gas, wind and solar that are driven more by politics than by markets. Just where they come out I cannot say. It will tend to come out mostly gas if it’s left up to the market. Then the issue is how much wind and solar will be subsidized and required. Solar continues to get more economic. Wind too but I believe it’s getting close to asymptotic.

The real questions are how much of this becomes distributed, and what happens with load growth.

Solar is inherently a distributed resource.  Wind is as much a centralized resource as nuclear power plants are – it’s still totally dependent on the transmission system.

I think we just don’t know whether energy efficiency continues to virtually eliminate load growth, which is what I think is going on in the northeast right now, and how long the old coal plants will be economic to run.

As for nuclear, I think that there is a big difference between new nuclear and the existing fleet. Say what you want about the technology, but it remains the only way to produce zero-carbon electricity that is not dependent on wind, solar or rain to operate. Even if we could pair renewables with massive storage, the cost will be multiples of the cost of electricity from nuclear energy. That makes nuclear a very unique animal. But without some recognition, these plants could see the same fate as the old coal plants.

You see that issue with Exelon’s bill in the Illinois legislature right now. We have three plants on the wrong side of the marginal cost curve, significantly driven by low gas prices and the subsidized wind production. Even prominent environmental and climate change advocates see the value of keeping the existing nuclear plants in operation through their design life. That makes a lot of sense to me. But, as to new nuclear, the costs are so high at this point that I just don’t see a future there unless we see radical cost reductions.

What do you think should happen with the three Illinois nuclear plants in question?

It’s best for the environment and the state if they continue to run. But we’re not looking at a real market. The market is heavily influenced by wind. So I haven’t any idea what’s going to happen. I might have been quicker to shut them down than the current management would be. I put a pretty high value on what’s going on with the market, more value than Chris [Exelon CEO Chris Crane] and his team do, simply because I had the good years of the market and it’s not so good anymore.

I think Exelon is best off if it gets its bill coupled with some of the other clean energy legislation. But you can’t answer those questions without knowing what happens in the negotiations.

What do you think of the concept of a low-carbon standard, as proposed in the Exelon bill?

I’ve always been an advocate of cap-and-trade and carbon taxes, I think that’s the right way to do it rather than a low-carbon standard. But a low-carbon standard is third best.

What about renewable energy advocates’ fears that a low-carbon standard replacing a renewable energy standard would be met entirely by nuclear energy and eliminate the incentive for wind and solar?

It all depends how big the standard is and what the price is. There’s no doubt you can keep those three plants going more cheaply than you can put in more wind and solar. The issue is at what price are you meddling in the market.

Wind and solar all have their own strengths and weaknesses. The best thing about solar is one, it’s distributed and two, it tends to produce the maximum energy in the daytime when it has the most value. Wind requires a lot of transmission and blows most heavily at night when it has the least value. Wind is much more of an economic burden on the nuclear plants than is the solar. Some people would say that’s a good thing, some would say that’s a bad thing.

The real point is we’re talking about three different forms of market intervention and they’re not consistent. What you’re doing is intellectually putting a different price on different forms of energy. That might be a legitimate thing to do, I’m not against it. But you’re not coming out with a uniform value of the carbon you’re replacing, you’re coming out with disparate values.

During your time at Exelon it constructed the solar farm on Chicago’s south side; was that a good idea and do you see more projects like that in the future?

I’m sure it’s never made a dollar. We did not get the subsidies that were promised for it, and it only made sense with federal subsidies. It’s a long story that is all politics and no economics. There is a role for solar farms. I don’t think it’s very big, I think the real value [of solar] is as a distributed resource.

What do you think of utilities increasing fixed rates and otherwise altering rate structures in ways that impede distributed solar development?

Solar with the right to sell the power back when they don’t need it is basically using the transmission grid on the cheap. At some point if it gets too big than the government just has to change that, because no one is paying for the upkeep of the grid we’re all relying on.

Illinois, Wisconsin, everybody is preparing for more solar, everyone is seeing more solar. With the subsidies the price of solar in some cities is now lower than the delivered cost of electricity. There’s danger for the utility, that’s true. That there’s a danger for everyone else is only a half-truth. It ignores the fact that we don’t have that much solar yet. The utilities are right but the time [for such policies] may not be right.

The net metering requirement, when you only have a little solar it’s a very nice way to subsidize the development of a new renewable industry. But when you have a lot, you can’t afford the subsidy anymore.

By subsidy, you mean net metering or other existing rate structures that have been amenable to distributed solar development?

It’s not a subsidy on the generation side, it’s a subsidy on the T and D [transmission and distribution] side. Both at night when they need to import the electricity into the solar house, and in the daytime when they send it out and they’re using that wire system, but because of the net metering they’re not [paying their fair share.]

Opponents of nuclear energy say that aside from the generation economics, the waste issue is a reason not to have nuclear energy. What do you think?

The waste problem is a very substantial one. I personally believe – it’s not a corporate position – that there should not be a new generation of nuclear plants until there is a working waste disposal site. It’s not an engineering problem on how to do this, but it is a deep community and political problem. If we can’t grasp that, in my view we shouldn’t be expanding nuclear generation. And you wouldn’t do [new nuclear plants] for economic reasons.

Do you see new nuclear plants being built any time in the future?

I don’t think it would be economic for 20 years. My foresight beyond 20 years is of no value. Right now given what’s being done with gas and renewables we shouldn’t be burning up policy chips on new nuclear – we should get what we can out of our existing nuclear fleet.

What do you think should be done with the waste?

There’s almost a consensus in the scientific and engineering community that it should be something akin to Yucca Mountain – a deep, buried hard-rock or salt dome facility. I spent a lot of time on a task force for [U.S. Energy] Secretary Chu trying out the concept. We should get a waste disposal site – that’s the single most important policy thing.

What do you think of the proposal for interim storage sites?

Interim sites would be better than what we have now. What we have now is essentially 60 or 70 interim storage sites. We’d be better off with five that are better-guarded. What we have now is safe enough but just not a permanent solution.

Depending how the upcoming PJM capacity auctions go, Exelon’s nuclear plants may benefit a lot and it would seem they would not need the bill in the legislature to guarantee their future. What do you think?

The [MISO] capacity auction in southern Illinois did not have much effect on Exelon because it sold the power forward. It would have an effect a year from now but not big enough to make that plant [Clinton Power Station] profitable. The [PJM] auction could make that Quad Cities plant profitable.

Do you want to see the legislature pass the Exelon bill?

I think a bill should pass but I disclaim all expertise on particular bills.

Ten years ago if you were told what the energy landscape would look like today, would you be surprised?

Yes, it is a surprise to me because I didn’t see how cheap gas was going to get. It’s not a surprise to me that electricity markets go up and down, they’re commodity markets. But the extent to which natural gas is selling under three bucks for three or four years is a surprise.

Once the existing nuclear plants reach the ends of their lives, what will fill the gap?

We’ll replace them with some combination of gas and wind and solar. In order to make wind and solar work, you need an awful lot of gas or batteries.

If the Exelon bill passes in Illinois or other similar measures that reduce incentives for wind and solar, will enough wind and solar be available to meet the need once those nuclear plants eventually close?

Oh, sure. There’s so much weight behind wind and solar. They already have a lot of help. The issue is how much and at what cost.

Historically coal has been the fuel that bridged the gap between the peaks and the lows [of wind and solar generation]. To some extent nuclear can do that, but it doesn’t do it well. The issue is how big does the gas component have to be. The answer is very big, especially when the nuclear plants go.

Would you have liked to see the nuclear industry have a greater role in the future?

I would have liked to see it be really viable. But I just don’t believe we can organize ourselves as a society for political and environmental reasons to make us like France [with major reliance on nuclear power.] I just don’t believe that’s the way the gods of policy and economics are flowing.

Can we have a zero carbon future?

I think only Stalin could get that and he wouldn’t. I think we will have a low carbon future, but I don’t think we will have a zero carbon future.


Kari has written for the Energy News Network since January 2011. She is an author and journalist who worked for the Washington Post's Midwest bureau from 1997 through 2009. Her work has also appeared in the New York Times, Chicago News Cooperative, Chicago Reader and other publications. Based in Chicago, Kari covers Illinois, Wisconsin and Indiana as well as environmental justice topics.