Nuclear Illinois Helped Shape Obama View on Energy in Dealings With Exelon

If Illinois were a country, it would have the world’s 12th-largest number of nuclear power reactors, behind China and ahead of Sweden. No other U.S. state generates more energy through fission.

Exelon Corp. (EXC), which operates all 11 of the state’s reactors, is no stranger to President Barack Obama. The Chicago- based company has served as a source of campaign contributions and also created environmental and political challenges to navigate.

Even as his administration reviews all U.S. reactors following the March 11 earthquake and tsunami that triggered radiation leaks from a crippled Japanese plant, Obama last week called nuclear power an “important part” of his energy agenda. That mirrors the balancing act he displayed in his adopted home state, which generates more than a tenth of U.S. nuclear power.

“It’s a large part of our power generation,” said Senator Mark Kirk, a Republican who won Obama’s old seat in November. “And we have more waste than any other state.”

Obama’s relationship with Exelon, the nation’s largest U.S. nuclear power producer, led his top 2008 Democratic primary opponent, then-Senator Hillary Clinton of New York, to charge that he had “cut some deals” with the industry.

Political Concerns

His experience also reflects his handling of political concerns in 2005-2006 from radioactive tritium leaks at Illinois reactors. And it includes battles over disposal of nuclear waste, an issue Kirk is raising following the Japanese disaster.

“We need to get nuclear waste away from Lake Michigan,” Kirk, 51, said. “The United States needs a permanent nuclear waste storage solution, and that’s overwhelmingly Yucca.” The Obama administration announced in February 2009 that it wouldn’t move forward on a proposed storage center at Yucca Mountain in Nevada.

Democrat Dick Durbin, the state’s senior senator, and Kirk plan a Chicago briefing March 25 to review the safety of Illinois reactors and address waste storage with Exelon representatives.

Obama’s 2012 budget calls for an additional $36 billion in U.S. loan guarantees for new nuclear power plants.

“The administration’s energy priorities are based solely on how best to build a 21st century, clean energy economy,” White House spokesman Clark Stevens said yesterday in a statement. “That policy is not about picking one energy source over another.”

The existing 104 reactors in the U.S. provide about 20 percent of the nation’s electricity. Those in Illinois provide about half the state’s power.

Campaign Accusation

Obama’s Exelon ties came under fire as he campaigned for the Democratic nomination for president in 2008.

“Senator Obama has some questions to answer about his dealings with one of his largest contributors, Exelon, a big nuclear power company,” said Clinton, then his party primary opponent and now his secretary of state. “Apparently he cut some deals behind closed doors to protect them from full disclosure.”

The Washington Post at the time reported that Clinton stretched the truth, although it also said Obama had “exaggerated his legislative accomplishments” as a nuclear- industry watchdog.

Obama also offered assurances to Nevadans on waste storage during the 2008 campaign.

‘Independent Judgment’

“I will bring to this issue not just independent judgment and careful deliberation, but a personal appreciation that comes from my own experience of living in the back yard of hazardous nuclear materials,” Obama wrote in a May 2007 letter to the editor of the Las Vegas Review-Journal.

Exelon and its employees were the seventh-largest source of campaign money for Obama, 49, during his four-year Senate career, contributing at least $71,850, according to the Washington-based Center for Responsive Politics.

When he ran for president, the company’s employees gave at least $200,000, and board member John Rogers Jr., chairman of Chicago-based Ariel Investments LLC, was a top Obama fundraiser.

Exelon “actively engages in the political process and supports candidates from both parties who we believe will support sensible energy policies,” company spokeswoman Judith Rader said yesterday in a statement.

Emanuel, Axelrod Ties

Two top former Obama aides, onetime senior adviser David Axelrod and ex-White House Chief of Staff Rahm Emanuel, had business dealings with Exelon earlier in their careers.

Emanuel, who left the administration to successfully run for mayor of Chicago, worked on the $8.2 billion merger that created Exelon in 2000. Axelrod, currently helping run Obama’s re-election bid, had ownership in a consulting business that had Exelon as a client before he joined the White House in 2009.

Obama’s legislative involvement with nuclear energy started after Exelon announced in December 2005 that it had detected “higher than normal concentrations” of tritium in an underground pipe inside the boundary of a plant it operated in Braidwood, about 60 miles (97 kilometers) southwest of Chicago.

Tritium, a radioactive form of hydrogen and a byproduct of nuclear power generation that in large doses can increase cancer risk, was found days later in a home’s drinking water well near the plant, although levels didn’t exceed safety standards.

Tritium Leaks

Two months later, Exelon announced tritium leaks had been found at two more nuclear power plant sites in Illinois. One of those, a plant located in Grundy County, about 60 miles southwest of Chicago, has the Mark 1 design, developed by General Electric Co. (GE) in the 1960s and used at the Fukushima Dai- Ichi plant in Japan.

On March 1, 2006, Obama introduced legislation that would have required utilities to notify federal nuclear regulators as well as state and county officials whenever there was “an unplanned release of fission products in excess of allowable limits.”

Exelon and other industry interests said they were already doing more reporting voluntarily and the measure wasn’t needed. A modified version of it never became law.

Exelon executives recently have stepped back from supporting an expansion of nuclear plants. In December, Charles Pardee, Exelon Nuclear’s president and chief nuclear officer, said the company “can’t make the numbers work” for building plants.

On March 8, three days before the earthquake, Chief Executive Officer John W. Rowe said lawmakers shouldn’t expand U.S. guarantees for loans for new reactors. Rowe said on March 16 that he is reassessing a $3.65-billion plan to boost output by upgrading Exelon’s existing reactors.

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.