Update: On Friday, Gov. J.B. Pritzker vetoed SB76, the legislation that would have repealed the state’s moratorium on new nuclear power plants.
Illinois’s moratorium on new nuclear power plant construction will stay in place after Gov. J.B. Pritzker on Friday vetoed legislation that would have lifted the ban.
The legislation, passed in May with bipartisan support, would have invalidated a 1987 law saying that new nuclear power facilities cannot be built in the state until a permanent waste storage option is available. It specifically called for allowing the development of so-called advanced nuclear reactors such as the Small Modular Nuclear Reactors, or SMRs, that industry advocates have proposed to help meet the state’s emissions-free energy goal.
Pritzker has spoken in favor of the potential for SMRs, though it was unclear what his position would be on the bill, which reached his desk on June 16. After 60 days, under Illinois law, an unsigned bill takes effect unless the governor vetoes it.
“It’s so obvious removing this barrier was a really smart move,” Christine Csizmadia, state policy expert for the Nuclear Energy Institute, an industry association, said prior to the veto. “We’re all waiting patiently for the governor’s signature, we would love his endorsement and it’s important to see it on the bill. There’s really no reason not to lift the moratorium. There’s no cost associated with this. It’s tethered to antiquated thinking.”
The law would have made Illinois the sixth state to remove such a moratorium, according to the Nuclear Energy Institute, with Wisconsin being the first in 2016. Montana, Connecticut, Kentucky and West Virginia have also lifted restrictions on nuclear development in recent years. Indiana passed a law allowing the public service commission to issue certificates of necessity for the construction of advanced nuclear, “paving the way for SMRs in Indiana,” Csizmadia said. California, Oregon and Minnesota have also introduced bills to repeal moratoria, according to the institute.
Nuclear proponents and Illinois lawmakers have said that advanced nuclear reactors could be an important way to meet power demand, especially as the state’s 2021 energy law mandates almost all fossil fuel generation ceases by 2045, and that most coal plants do so sooner. Under current licenses, Illinois’ conventional nuclear plants will shut down by 2050.
Anti-nuclear activists and multiple consumer advocacy and clean energy groups opposed lifting the moratorium, arguing that solar, wind and storage can meet the state’s energy needs. Nuclear power is too costly, they say, and also raises the issue of waste.
“It’s carbon-free but not entirely clean,” said Jen Walling, executive director of the Illinois Environmental Council. “We’re also concerned just about the regulations and rules. These are 1 megawatt things that you could put in a factory in a residential area.”
Meanwhile, small modular nuclear reactors have not been deployed commercially yet, and likely won’t be for some years. The U.S. Department of Energy is funding pilot programs to develop SMRs including in Idaho, Texas and Wyoming, with the reactors scheduled to go online by 2030.
“We need to address capacity issues more quickly in downstate Illinois,” said Walling. “Nuclear is just not going to cut it.”
Financial outlook
In regulated energy market states like Indiana and Wisconsin, utilities could charge ratepayers to construct SMRs if their state public service commissions approve it. In Illinois’s deregulated market, companies would have to build SMRs and sell the power on the competitive market.
Illinois’s 2017 Future Energy Jobs Act and 2021 Climate & Equitable Jobs Act created Renewable Energy Credits that helped make solar financially viable, while also guaranteeing certain revenue to conventional nuclear plants, which provide about half the state’s electricity. Owner Exelon had threatened to close some of the six plants if the state did not provide subsidies.
FEJA and then CEJA promised hundreds of millions of dollars to Exelon for the reactors, measures that critics called “bailouts.” CEJA’s terms ended up benefiting rather than costing ratepayers, because of unexpected spikes in energy prices. But nuclear critics say they don’t want the state to subsidize a new generation of nuclear plants.
The federal Investment Tax Credit expanded under the Inflation Reduction Act applies to advanced nuclear, offering a 30% tax credit plus an additional 10% each for being located in “energy communities” impacted by fossil fuel generation or mining, and for being made with domestic components. Nuclear plants could also earn tax credits for generating clean hydrogen.
The Nuclear Energy Institute and other proponents have called for additional state support, including replacing Renewable Portfolio Standards with clean energy standards that would cover nuclear along with wind and solar, or adding zero-emissions credit programs that would reward nuclear power. Proponents of SMRs say they are more cost-effective than conventional nuclear plants, while also creating jobs and supporting the tax base where plants are built.
“Some states have passed laws allowing for certain tax exemptions on property and sales of electricity and for new capital investments associated with new reactor development,” says a January report by the Nuclear Energy Institute. “Several states have considered advanced cost recovery mechanisms like Construction Work in Progress, allowing a utility to collect financing costs for a project before construction is completed. This mechanism reduces the overall amount needed to finance a project and may lower the total project costs that eventually are included in the customer rate base.”
Coal to nuclear?
Csizmadia said there were about 200 bills related to interest in nuclear introduced in state legislatures this year, up from five to 10 bills per year when she joined the institute 17 years ago. The bills call for “things like setting up nuclear working groups, task forces, commissions, legislators convening to learn more about advanced nuclear,” which is beneficial, she said, since “it’s complicated technology, it’s new technology.”
Wisconsin and Michigan have operating conventional nuclear plants, while the other states that lifted nuclear moratoria — Kentucky, West Virginia and Indiana — don’t currently have nuclear plants and have long relied on coal mining and coal-fired generation.
In Illinois, Indiana and elsewhere, advocates have proposed SMRs be placed on old coal plant sites, to take advantage of the grid infrastructure and access to water, plus the 10% add-on to the Investment Tax Credit for energy communities. Representatives of NuScale, a leading developer of SMRs, presented to the Indiana legislature’s 21st Century Energy Task Force in 2021 about the potential for reactors on coal plant sites.
“States like West Virginia are looking at a decarbonized economy coming down the pike, and they’re looking at nuclear,” Csizmadia said. “For communities that are going to face coal closures, a lot of those jobs can be preserved — a pipefitter is a pipefitter.”
Zion in Northern Illinois suffered devastating economic consequences after its nuclear plant closed in 1998. Doug Ower, a local Sierra Club chairperson, said residents don’t want another nuclear plant.
“It’s been a financial disaster for the city,” Ower said, though CEJA provided just transition funds for the community to help replace lost taxes. “We are stuck with the spent fuel, we lost our tax base. We don’t want another one.”
The Nuclear Energy Information Service, a Chicago-based anti-nuclear organization, has called for a year of “in-depth study” of safety, financial and waste issues before repealing the moratorium.
“We believe that neither the governor nor the legislature have adequately examined or understood the full implications and impacts of moratorium repeal and advocating for more nuclear power,” said NEIS executive director Dave Kraft. “In the absence of this critical knowledge, the repeal becomes a de facto referendum on Illinois’ energy future — will it be renewable or nuclear? That’s what’s really at stake.”