March 29, 2012

Jeff McMahon, Contributor
Forbes.com

Nuclear power is no longer an economically viable source of new energy in the United States, the freshly-retired CEO of Exelon, America’s largest producer of nuclear power, said in Chicago Thursday.

And it won’t become economically viable, he said, for the forseeable future.

"Let me state unequivocably that I’ve never met a nuclear plant I didn’t like," said John Rowe, who retired 17 days ago as chairman and CEO of Exelon Corporation, which operates 22 nuclear power plants, more than any other utility in the United States.

"Having said that, let me also state unequivocably that new ones don’t make any sense right now."

Speaking to about 5o people at the University of Chicago’s Harris School of Public Policy,Rowe presented a series of slides comparing the economic viability of various energy portfolios, including the "King Coal" scenario favored by Republicans, the "Big Wind" scenario favored by Democrats, and a "Playing Favorites" scenario that shuffles and selects from various energy sources.

All were trumped by a portfolio that relies heavily on America’s sudden abundance of natural gas, which has flooded the market since the boom in hydraulic fracturing of shale gas. Natural gas futures dropped to a 10-year low today—$2.15 for 1,000 cubic feet—on abundant supply, the Associated Press reported.

"I’m the nuclear guy," Rowe said. "And you won’t get better results with nuclear. It just isn’t economic, and it’s not economic within a foreseeable time frame."

Nuclear power remains a favorite of the Obama Administration, particularly in the form of small and modular new reactors. But Rowe’s pessimism about nuclear power reinforces statements made by other nuclear experts since the Fukushima nuclear accident in Japan.

However, Rowe did not touch upon the political vulnerability of nuclear power since the Fukushima accident. His argument was economic and, he added, paints a picture that Exelon itself does not savor.

Former ComEd CEO Tom Ayers built Exelon’s reactor fleet because, Rowe said, he thought they were best for the environment. But Ayers was suffering from Alzheimer’s Disease by the time the reactors broke even on their initial cost. He died in 2007.

"I’m not fond of investments that don’t pay off before I’m incapable of comprehending it," said Rowe, who took over as chairman and CEO of Exelon in 2003.

Rowe also served on the president’s Blue Ribbon Commission on America’s Nuclear Future.