Exelon Defers Decisions on Its Quad Cities and Byron Nuclear Plants for One Year
September 10 2015 - 08:00AM
Business Wire
Deferral follows outcome of third PJM capacity
auction
Exelon Corporation (NYSE: EXC) today announced that all of its
nuclear plants in the PJM market cleared in the transition capacity
auction for the 2017-18 planning year and that the company will
defer any decisions about the future operations of its Quad Cities
and Byron nuclear plants for one year. As a result, the company
plans to continue operating its Quad Cities nuclear power plant
through at least May 2018. The Byron plant is already obligated to
operate through May 2019.
Exelon intends to bid Quad Cities, Byron, Three Mile Island and
all eligible nuclear plants into the 2019-2020 PJM capacity auction
next year. The decision to defer retirement decisions comes after
rigorous analysis of the present and future economics of the
plants, taking into consideration the constructive market trends
stemming from the PJM capacity auction reforms.
“While Quad Cities and Byron remain economically challenged, we
are encouraged by the results of the recent capacity auctions. The
new market reforms help to recognize the unique value of always-on
nuclear power, while preserving the reliability of our electric
system,” said Chris Crane, Exelon president and CEO. “However,
these plants are long-lived assets with decades of useful life
left, and today’s decision is only a short-term reprieve. Policy
reforms are still needed to level the playing field for all forms
of clean energy and best position the state of Illinois to meet
EPA’s new carbon reduction rules.”
Exelon will continue its dialogue with Illinois policymakers
about market and policy reforms that properly value nuclear power
for the economic and environmental benefits it provides.
Exelon has long supported efforts to reduce carbon dioxide
emissions from the power sector and has invested in clean
technologies to improve the quality of the air for the benefit of
its customers. The EPA’s Clean Power Plan, which mandates
significant reductions in carbon emissions from power plants, will
require the states and the power sector to find the most
cost-effective solutions to achieve the required reductions.
The Illinois Environmental Protection Agency determined that the
loss of two nuclear plants would increase emissions by about 24
million short tons, more than doubling the emissions reductions
required under the EPA’s carbon reduction rules and making it twice
as costly to comply. The Illinois EPA calculated the incremental
societal cost of losing two plants at more than $10 billion -- a
figure that does not include the additional billions of dollars
early retirements would cost in the form of higher energy bills,
reduced electric reliability and lost jobs.
The auction results for the 2017-18 planning year take effect in
June 2017. The transition auction was the second of two held by PJM
to supplement its prior base capacity auctions for the 2016-17 and
2017-18 planning years with the new capacity performance product,
which is designed to strengthen electric grid reliability.
Unlike Quad Cities and Byron, Exelon’s Clinton nuclear plant
operates in MISO territory and did not benefit from the PJM auction
results. While a MISO capacity auction held earlier this year
helped reduce Clinton’s economic losses, the plant remains
economically challenged and is at risk of premature retirement if
conditions do not improve.
Grid operator PJM holds a capacity auction annually to ensure
enough power generation resources are available to meet demand in
its region covering all or part of 13 states and the District of
Columbia. Although capacity revenue in a single year is an
important consideration in a plant’s long-term viability, it is
just one of several factors Exelon uses to make decisions about its
plants’ future operations.
Exelon Corporation (NYSE: EXC) is the nation’s leading
competitive energy provider, with 2014 revenues of approximately
$27.4 billion. Headquartered in Chicago, Exelon does business in 48
states, the District of Columbia and Canada. Exelon is one of the
largest competitive U.S. power generators, with more than 32,000
megawatts of owned capacity comprising one of the nation’s cleanest
and lowest-cost power generation fleets. The company’s
Constellation business unit provides energy products and services
to more than 2.5 million residential, public sector and business
customers, including more than two-thirds of the Fortune 100.
Exelon’s utilities deliver electricity and natural gas to more than
7.8 million customers in central Maryland (BGE), northern Illinois
(ComEd) and southeastern Pennsylvania (PECO). Follow Exelon on
Twitter @Exelon.
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version on businesswire.com: http://www.businesswire.com/news/home/20150910005365/en/
Exelon CorporationPaul ElsbergCorporate
Communications312-394-7417paul.elsberg@exeloncorp.com
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