Economic Impact of Closing Zion Nuclear Facility

EMD-82-3: Published: Oct 21, 1981. Publicly Released: Oct 27, 1981.

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GAO compared the costs of terminating operations at the Zion nuclear electric-generating facility near Chicago, Illinois, versus adding the necessary safety requirements to protect the surrounding population. It also discussed the financial and power supply impact that termination would have on the Commonwealth Edison Company and its customers.

Continued use of the Zion facility will require expenditures for safety-related modifications required by the Nuclear Regulatory Commission (NRC) and for radiological emergency preparedness measures. Although total costs are uncertain, planned expenditures over the next few years will total about $70 million. Future NRC requirements could add substantially to this amount. The GAO analysis of the potential economic impact of closing the Zion nuclear facility disclosed that: (1) Zion's nuclear power was generated at about one-fourth to one-third the cost of that generated by coal-fired units in the Commonwealth Edison system; (2) unless replacement capacity could be found, the loss of Zion's capacity would reduce Commonwealth Edison's reserves below levels that it considers adequate to maintain reliable services; (3) to the extent that it is available, purchased power from other utilities would be the most likely way to replace Zion's power; (4) Commonwealth Edison's production costs would increase by over $300 million in the first year without Zion; (4) increases in annual short-term revenue requirements would range from $47 million to $356 million, depending on the assumptions used; (5) revenue requirement increases through the year 2000 could total between $16.6 billion and $18.2 billion; and (6) leaving Zion in service but limiting its operation to 70-percent power would also increase costs, but to a lesser degree.

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