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Local officials bracing for major economic blow if Byron nuclear plant closes

BYRON – A third of Ogle County's tax revenue comes from Exelon Generator's Byron Nuclear Power Plant.

The plant employs about 700 regular employees, and every 18 months, when one of the Byron units goes offline for refueling and maintenance, hires around 1,200 contractors.

The hit from its closure a year from now would be a "gut punch" to the region's economy, one area legislator said.

The plant will be retired in September 2021, Exelon announced Thursday morning. The Dresden plant in Morris will close that November, and the La Salle and Braidwood nuclear stations also are at high risk for premature closure, the company said.

Exelon, which has threatened several times in recent years to close some of its nuclear plants, left the door open once again, however, saying in the release that it will continue talks with policymakers on ways to prevent the closures.

The Byron plant was licensed for 20 more years, Dresden for 10, but they face revenue shortfalls in the hundreds of millions of dollars because of declining energy prices and market rules that “allow fossil fuel plants to underbid clean resources,” the company said in a news release announcing the decision.

“Although we know in our heads that shutting down the uneconomic Illinois plants is necessary to preserve even more jobs elsewhere, our hearts ache today for the thousands of talented women and men that have served Illinois families for more than a generation and will lose their jobs because of poorly conceived energy policies,” Christopher Crane, president and CEO of Exelon, said in the release.

“But we are only about a year away from shutdown, and we need to give our people, the host communities, and regulators time to prepare.”

Exelon recognizes that the decision comes as communities are still recovering from economic impacts of the COVID-19 pandemic, he said.

“To that end, we have opened our books to policymakers and will continue to do so for any lawmaker who wishes to judge the plants’ profitability,” Crane said.

The announcement is a “gut punch” to the people of Illinois. U.S. Rep. Adam Kinzinger, R-Channahon, said Thursday.

State Sen. Brian Stewart, R-Freeport, said that he wants to hear from all stakeholders about how the Byron closure would impact northern Illinois and that the plant’s value never should be underestimated by state leaders.

“These are professional jobs with pretty specific sets of skills, and if the Byron facility closes, many of the employees will need to move to other parts of the state or out of Illinois entirely,” Stewart said. “And we must consider the countless other businesses these employees support in their communities.”

The Byron plant pays one of the nation's highest property tax bills. In 2018, the plant’s main real estate tax bill was more than $34 million. Ogle County and programs associated with it received more than $3.7 million from that 2018 tax bill. The Oregon Park District received more than $2.2 million.

In fact, the nuclear plant, which accounts for most of the the county's nonagricultural economy. also makes up a third of the county’s tax money, Ogle County Board Chairman John Finfrock said, adding that he hopes negotiations between Exelon and the government will result in the plant's staying open.

Exelon will file a deactivation notice in the weeks ahead and will be scaling back the refueling outage scheduled for the fall, resulting in spending reductions of $50 million and the elimination of up to 1,4000 of the more than 2,000 mostly union jobs associated with the outages at Byron and Dresden.

While retirement preparations are underway, employees will continue to operate the plants until they are decommissioned.

“Exelon Generation will work to place affected plant employees at other Exelon facilities or help them transition to positions outside the company, wherever possible,” the release said.

The closure would come at an inopportune time, with the county cutting budget to make up for COVID-19 revenue losses.

The arrival of the plant bolstered the county's prosperity and "changed a lot of things,” Finfrock said. “The workforce that built that plant came from here. I’ve been here all my life and I’ve seen a lot of changes. This would be a big one.”

Tax revenue from the nuclear plant money makes up 79 percent of the Oregon Park District's budget, Executive Director Erin Folk said, adding that the announcement, while unexpected, was not a complete surprise given that Exelon has been talking about the possibility for several years.

OPD has made decisions over the last decade to minimize the impact of a potential closure, including creating a long-term capital fund and taking care of the district's existing infrastructure.

Still, she and other local leaders have reached out to local legislators to see what can be done.

“We were disappointed in the decision and will continue to evaluate what will happen,” Folk said. “A lot can happen between now and September 2021. That tax revenue loss would be devastating for our district, city and county.”

The majority of the plant's property taxes are divvied up by 11 taxing bodies, most in Byron. The Byron School District received just over $19.7 million, the Byron Forest Preserve nearly $2.35 million, its Fire District $2.3 million, and the library district $830,000.

Exelon’s taxes also go to Ogle County, the Oregon School District, the Oregon Park District, Rockvale Township, Rock Valley College, the Byron Museum District, and Kishwaukee Community College.

The city of Byron doesn’t receive any tax money, because the from the plant is not within the city limits, but nonetheless, the news was hard to take, Mayor John Rickard said.

“I didn’t know,” Rickard said. “Initially, it was a shock. And then a sense of disappointment. And then it was, ‘What do we have to do?’”

About 1,200 people lived in Byron before the plant; its population now is 3,800. A closure would “significant” change, he said.

Like the park district, the city has kept a potential closure in mind, and has been making efforts to diversify its economic base, Rickard said.

Still, “I thought this would be further down the road.”

He's not sure if the closure is set in stone, or if the announcement is a ploy by Exelon to get its property assessment reduced. It could be both, he said.

Each year, the Ogle County assessor calculates the value of the plant, and taxes are calculated from that assessment. Each year; Exelon appeals the assessment to the county Board of Review.

In January 2019, the Board of Review lowered the plant’s 2018 assessment from $546 million to $503 million. Exelon had asked for the assessment to be set at $188 million, while the school district requested a value of $625 million.

In 2018, the company paid $36.8 million in real estate taxes; the reduction in 2019 dropped the payment to $35.2 million.

The plant cost $4.5 billion and took 10 years to build. The Unit 1 reactor came online in 1985 and Unit 2 in 1987.

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