Exelon Announces Outcome of 2019-2020 PJM Capacity Auction
May 25 2016 - 6:00AM
Business Wire
Quad Cities and Three Mile Island nuclear
plants did not clear in auction; policy solutions essential to
preserving zero-carbon nuclear energy
Exelon Corporation today announced that its Quad Cities and
Three Mile Island nuclear plants did not clear in the PJM capacity
auction for the 2019-2020 planning year and will not receive
capacity revenue for that period. While a portion of the Byron
nuclear plant’s capacity did not clear in the auction, the plant is
committed to operate through May 2020. The company’s other nuclear
plants in PJM cleared in the auction, except Oyster Creek, which is
scheduled to retire in 2019 and did not participate in the auction.
The auction results take effect June 2019.
“The capacity market alone can’t preserve zero-carbon emitting
nuclear plants that are facing the lowest wholesale energy prices
in 15 years,” said Chris Crane, president and CEO of Exelon.
“Without passage of comprehensive energy legislation that
recognizes nuclear energy for its economic, reliability and
environmental benefits to Illinois, we will be forced to close Quad
Cities and Clinton, resulting in the loss of jobs and economic
activity, higher energy prices for consumers, and a dramatic
increase in carbon emissions that will make it harder and more
expensive for Illinois to meet its clean energy goals.”
Earlier this month, Exelon announced that it would retire its
Quad Cities and Clinton nuclear facilities if adequate legislation
is not passed during the spring Illinois legislative session
scheduled to end May 31. Quad Cities and Clinton have lost a
combined $800 million in the past seven years, despite being two of
Exelon’s highest-performing plants.
Clinton operates in the MISO market. Despite clearing in MISO’s
recent one-year forward capacity auction, Clinton will not receive
enough revenue to avoid continued losses. The Next Generation
Energy Plan legislation would preserve the two at-risk Illinois
nuclear plants and their zero-emissions benefits, as well as
strengthen the economy and promote development of clean energy in
the state.
The NGEP includes implementation of a zero emission standard
that would specifically target at-risk nuclear plants, making
Illinois one of the first states to recognize the zero-carbon
benefits of nuclear energy. The legislation -- which has strong
bipartisan, community and labor support – would nearly double
energy efficiency programs and jumpstart solar development with
rebates and $140 million per year in new funding.
The legislation would preserve more than $1.2 billion in
economic activity and 4,200 direct and indirect jobs associated
with Quad Cities and Clinton. Without it, consumers will pay more
for electricity. A study commissioned by the state found that
shuttering the two plants would cause wholesale energy prices to
rise by $439 million to $645 million annually for homes and
businesses in the region.
Preserving Illinois’ nuclear facilities also is essential to
maintaining the state’s role as a clean-energy leader. The early
retirement of Quad Cities and Clinton would increase carbon
emissions by more than 20 million metric tons – the equivalent of
putting more than 4 million cars on the road. The societal costs of
the increased emissions would reach nearly $10 billion between 2020
and 2029, the state report concluded.
This is the second consecutive year that Three Mile Island Unit
1 failed to clear the PJM capacity auction. Although the plant is
committed to operate through May 2018, the plant faces continued
economic challenges and Exelon is exploring all options to return
it to profitability.
Capacity auctions are held annually by grid operator PJM 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. This is the fourth capacity auction held
under “capacity performance” reforms ordered by the Federal Energy
Regulatory Commission to increase power plant reliability and
strengthen the region’s energy supply. The reforms were an
important step in recognizing nuclear energy for its year-round
reliability in all weather extremes, but Quad Cities and other
at-risk nuclear facilities continue to face economic challenges due
to low energy prices and other factors.
Cautionary Statements Regarding
Forward-Looking Information
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, that are subject to risks and uncertainties. The factors
that could cause actual results to differ materially from the
forward-looking statements made by Exelon and Generation include
those factors discussed herein, as well as the items discussed in
(1) Exelon’s 2015 Annual Report on Form 10-K in (a) ITEM 1A. Risk
Factors, (b) ITEM 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations and (c) ITEM 8.
Financial Statements and Supplementary Data: Note 23; (2) Pepco
Holdings, Inc.’s 2015 Annual Report on Form 10-K in (a) ITEM 1A.
Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations and (c) ITEM 8.
Financial Statements and Supplementary Data: Note 16; (3) Exelon’s
First Quarter 2016 Quarterly Report on Form 10-Q in (a) Part II,
Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial
Information, ITEM 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations and (c) Part I,
Financial Information, ITEM 1. Financial Statements: Note 18 and
(4) other factors discussed in filings with the SEC by Exelon and
Generation. Readers are cautioned not to place undue reliance on
these forward-looking statements, which apply only as of the date
of this press release. Exelon and Generation do not undertake any
obligation to publicly release any revision to its forward-looking
statements to reflect events or circumstances after the date of
this press release.
Exelon Corporation (NYSE: EXC), now including the Pepco Holdings
utilities, is the nation’s leading competitive energy provider,
with 2015 revenues of approximately $34.5 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 32,700 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 approximately 2 million
residential, public sector and business customers, including more
than two-thirds of the Fortune 100. Exelon’s six utilities deliver
electricity and natural gas to approximately 10 million customers
in Delaware, the District of Columbia, Illinois, Maryland, New
Jersey and Pennsylvania through its Atlantic City Electric, BGE,
ComEd, Delmarva Power, PECO and Pepco subsidiaries. Follow Exelon
on Twitter @Exelon.
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Exelon CorporationPaul AdamsCorporate
Communications410-470-4167paul.adams@constellation.com
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