The town of Zion, Illinois, went into an economic spiral after the sudden closure of a nuclear power plant 25 years ago. Today, it’s still trying to recover and offers a cautionary tale for the country’s energy transition.

by Kari Lydersen November 8, 2022

The nuclear plant on the shore of Lake Michigan in Zion, Illinois, opened a few years before Al Hill moved to the verdant, friendly town in 1976 to operate the local ice rink. The plant was an economic boon for the town, and Hill and others assumed that once it closed, the nuclear waste would be taken away and the site redeveloped.

But the plant stopped operating in 1997, after an employee accidentally shut the reactor down and then-owner ComEd deemed running the trouble-plagued plant too costly.

It became a drag on the town; the jobs and the $19 million in annual taxes it once provided nearly disappeared even as the nuclear waste remained. Hill became mayor in 2015, grappling with the burden of the plant and fighting for government aid that eventually materialized in Illinois’ 2021 energy law.

Now as state and federal lawmakers are re-upping commitments to nuclear power, Hill and others point to Zion as a cautionary tale and urge planning for a just transition once nuclear plants close.

Much attention has been paid to a just transition from coal, in Illinois and nationally. But nuclear plants typically pay far more in taxes and employ many more people at higher wages than coal plants. Plus, nuclear waste typically stored onsite is an even bigger liability than contamination left over from coal plants.

So even as recent federal legislation has created clean energy credits for nuclear power and states — including Illinois — have offered new subsidies to nuclear plants, plans should be made and mandates enshrined regarding the plants’ eventual closing, civic leaders say.

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“It’s not Exelon that needs the bailouts — it’s the communities that will get screwed,” said Dave Kraft, director of the Nuclear Energy Information Service in Chicago, referring to the owner of Illinois’ nuclear fleet. “There’s an emphasis on keeping the plants open at all costs, save the high-paying jobs. We get that, but nothing lasts forever. The best time to plan for retirement is before you retire. We made our position known because of what we saw happen when Zion closed.”

Rental housing in Zion, Illinois. Credit: Lloyd DeGrane / for the Energy News Network

A downward spiral 

After the Zion plant closed, the town of 25,000 people lost more than half of its tax base, forcing increases in taxes levied for the schools and cutbacks in park and library budgets.

“That $19 million burden shifted to all the businesses and residents — their taxes went up 50% right off the bat, and what happened then is a property tax spiral got kicked off,” said David Knabel, director of Zion’s accounts and finance departments. “If your property taxes go up, you have less to spend on a house. With taxes being so high, our property values started crashing because nobody wanted to buy a house. It got to the point where nice two-bedroom homes were going for $20,000 or $30,000. We had investor groups coming from all over the country buying 20, 30, 40, sometimes 50 homes at that price and putting rental in there and not really caring about the maintenance, just getting a monthly check. That created a huge downward spiral for our community.”

Many of the nuclear plant employees were offered jobs at other nuclear plants in the state; their families leaving Zion only added to the housing crash. Rental properties soared, to almost two-thirds of the town’s total. That also meant an influx of residents holding subsidized housing vouchers, a vulnerable population that the town was not prepared to serve, said Hill, who left office after one term.

“It put more stress on the schools, more pressure on police and fire departments,” even as the town’s tax base was declining, said Hill, who had led the park district and then served on the city council before becoming mayor. “I can’t tell you how many businesses said, ‘We’d like to come here but the tax rate is too high’ — big businesses. The taxing bodies sat down and said, ‘What can we do to lower taxes, and keep them low’ — we were talking about buying paper together, things like that, that added up to nothing.”

Signs warn people to stay off the property of the former nuclear site along Lake Michigan. Credit: Lloyd DeGrane / for the Energy News Network

Saddled with nuclear waste 

When Hill was elected mayor, waste from Zion and the rest of the country’s nuclear plants was to be stored permanently in the planned Yucca Mountain repository in Nevada. The contractor handling Zion’s decommissioning, EnergySolutions, said the lakefront would be ready for redevelopment by 2020. But state and tribal opposition scuttled the Yucca Mountain plan, and proposals for centralized interim storage sites have also stalled because of concerns about transportation and safety.

Hence about 2.2 million pounds of nuclear waste is still stored on the lakeshore in Zion, with no changes in the foreseeable future.

That means the 200 acres of prime lakefront property cannot be redeveloped. Without the nuclear waste and plant remnants, commercial and residential development on the site could bring tax revenue and jobs, and make Zion a more attractive community for businesses.

“There are places where big auto plants close like Detroit, but they have the chance to redevelop the site,” Knabel said. “When the [nuclear] plant closed, it was tied up in decommissioning for 20 years, and now the site still has all the nuclear spent fuel in casks, and the giant switchyard that’s part of the infrastructure. So we don’t have the opportunity to redevelop to offset the impact” of the closure.

Starting a decade ago, Zion civic leaders lobbied Illinois Congressional members and state legislators for compensation and aid around the plant. Their efforts eventually bore fruit last fall, as the state’s Climate and Equitable Jobs Act mandates tax payments of $15 per kilogram of nuclear waste stored onsite, amounting to about $15 million a year for Zion. The federal STRANDED Act, first proposed by Illinois’ Congressional delegation in 2015 and introduced last year by Sen. Tammy Duckworth of Illinois, proposes the same payment rate. If a federal law passes, that would replace the state funds, though Knabel noted that given the current political situation, federal action any time soon is unlikely.

There are six nuclear plants remaining in Illinois, and two of them — Byron and Dresden — received almost $700 million in subsidies under the 2021 Climate and Equitable Jobs Act law, in addition to $235 million in annual subsidies for the Clinton and Quad Cities plants under the state’s 2017 Future Energy Jobs Act. Exelon had threatened that without subsidies, the plants would close.

“This industry gets an unbelievable amount of money thrown at it from an unwitting public,” said Kevin Kamps, a radioactive waste specialist at the national watchdog group Beyond Nuclear. “Isn’t a subsidy supposed to get an industry going and let the free market take over? Never with nuclear power. There’s no just transition — the money is going to these companies and then they don’t share it with the communities.”

Even as the subsidies mean the plants will stay open for years to come, Kraft and other advocates think civic leaders and legislators should plan for closure and dealing with waste at the plants and other locations in the nuclear supply chain. That includes a waste storage site in Morris, Illinois, originally designed as a nuclear fuel recycling center, and a Honeywell nuclear fuel processing plant in the town of Metropolis.

A residential street in Zion, Illinois. Credit: Lloyd DeGrane / for the Energy News Network

Jobs and tax relief 

Just transition proponents have called for companies to set aside funds for cleaning up nuclear sites and compensating communities, so that the burden is not on taxpayers. Zion has served as a symbol for other communities — including in Pennsylvania, California and New York — facing the eventual closure of nuclear reactors.

“Create a pool of money prior to closure that would be escrowed and untouchable, that couldn’t be swept off the state books,” Kraft said.

Key questions include who pays the costs for a nuclear just transition, and whether the same ratepayers who will ultimately be affected by the closure will be the ones also subsidizing the transition.

In June, more than 170 environmental and citizen groups nationwide sent a letter to Energy Secretary Jennifer Granholm decrying the possible award of federal Civil Nuclear Credits to the Diablo Canyon plant in northern California to extend its operating life. They argued that the move would torpedo the just transition programs that were already underway in compliance with state law, and force ratepayers to unfairly bear the burden of $200 million in just transition costs already spent plus more than a billion dollars needed to keep the plant running. Under the phase-out agreement, utility PG&E is paying Diablo Canyon workers through 2025 and providing transitional tax revenue.

“Unraveling such a model agreement would not only undermine the goal of building a just and equitable clean energy economy, it would also exacerbate environmental justice impacts,” the letter said.

Zion City Hall. Credit: Lloyd DeGrane / for the Energy News Network

Few choices

Just transition plans also typically include job training components, with a focus on clean energy, and Illinois’ 2021 law devotes significant funding to job training and small business accelerator funding for coal plant, coal mine and nuclear plant workers and communities.

But in the past, such programs — including ones created by Illinois’s 2017 energy law — have floundered in part because there are few jobs that pay as well or require similar skills to coal plant work. And that is even more relevant for nuclear plant workers who often earn even higher wages and have more specialized skills. The Bureau of Labor Statistics lists power plant operators earning a median of $81,000 per year, and nuclear reactor operators earning a median of $104,000. 

After a nuclear plant closes there will be years of decommissioning which can create good jobs. Just transition advocates argue that there should be requirements around local hiring and wages and benefits for these jobs, especially since decommissioning is often carried out by contractors rather than the plant owner. In Zion, a citizen advisory board was created to oversee decommissioning, but critics argued it had little power and the process lacked transparency, including over how funds were spent.

Doug Ower was a member of the decommissioning advisory board for 10 years, and was relatively satisfied with that process. But he’s seen the ongoing impacts of the plant’s closure on Zion, and he worries other towns like Byron will go through similar experiences. He worked with the Sierra Club to lobby for just transition provisions in Illinois law.

“A lot of these nuclear plants are located in very small communities; [when they close] it’s going to be devastating,” Ower said. “Obviously you have to look at the jobs — the workers need training and some form of workforce development. Then the communities as well do need some support. If we’re going to have the spent fuel stored in those communities, they should be compensated.”

Knabel said the federal government ultimately should be aiding communities with closed plants forced to store nuclear waste, since the spent fuel is under the jurisdiction of the federal government. He imagines that if small modular nuclear reactors that are being researched end up commercially viable, it’s possible the nuclear plant site could host one. He doesn’t think the fuel will be removed at any time in the foreseeable future and doesn’t see many other options.

“It’s possible you could have a solar field or something like that, but you’re pretty limited in uses,” Knabel said. “There’s a major scar on our community. We’ll make do and make the best we can with it, but we are scarred.”