By John Stang
Power company Exelon repeated Tuesday that it still needs additional legislative help from states to keep its nuclear plants open.
The message from President and CEO Chris Crane, speaking to financial analysts during a teleconference on the company’s 2019 earnings, echoed concerns he has raised repeatedly – most recently during the company’s last quarterly call.
Exelon owns 22 reactors at 13 locations in Illinois, Maryland, New York, and Pennsylvania under its Exelon Generation subsidiary. Last September, it retired its reactor at the Three Mile Island plant near Harrisburg, Pa. A year before it shuttered the Oyster Creek Nuclear Generating Station in New Jersey, then in 2019 sold it to energy technology company Holtec International for decommissioning.
Like much of the nuclear power industry, Exelon has trouble with competing with cheaper electricity from natural gas plants. At the same time across the nation, some nuclear facilities are nearing the ends of their designed lives.
“We surely hope for many complicated issues that the states are able to enact and given time to enact the policies that they desire that will allow these plants to still operate,” Crane said Tuesday. “I’ve said for the last four or five years on almost every earnings call that if we can’t see … financial stability for each one of these assets that we will have to retire them and we’re not going to speculate today on which ones or when. But we’ve shut down Oyster Creek, gone into decommissioning with a decommissioning company. (Three Mile Island) is off. There was no path for financial stability.”
An example of Exelon trying to cope is trying to get tax credits for being carbon-free in Illinois.
Four Exelon plants in Illinois – each with two reactors – are not covered by the zero-emission credit program established under the state’s 2016 Future Energy Jobs Act that already provide ratepayer subsidies to the Chicago-based company’s Clinton and Quad Cities plants. Zero-emissions credit programs provide payments for power sources that do not emit greenhouse gases, including nuclear plants.
Legislation has been introduced in the current session of the Illinois General Assembly to add the four plants — LaSalle, Byron, Braidwood, and Dresden — to the zero-emissions credits program. However, Illinois news reports say this bill has a rough road ahead due to federal investigations into Exelon and subsidiary ComEd, which is the largest utility in the state.
The U.S. Attorney General’s Office and Securities and Exchange Commission are investigating the lobbying activities of Exelon and ComEd. The case involves the company’s relationship with former Illinois state Sen. Martin Sandoval (D). Both investigations became formal in October 2019, according to an Exelon 10-K filing Tuesday with the SEC. Sandoval resigned from the Illinois Senate in November due to an unrelated scandal involving bribes from the traffic industry.
“ComEd cannot predict the outcome of the U.S. Attorney’s Office or the SEC investigations. … Management is currently unable to estimate a range of reasonably possible loss as these matters are subject to change,” the 10-K says. “Subsequent to Exelon announcing the receipt of the subpoenas, a putative class action lawsuit has been filed against Exelon and certain officers of Exelon and ComEd alleging misrepresentations or omissions by Exelon purporting to relate to matters that are the subject of the subpoenas and the SEC investigation.”
Exelon’s filing said the allegations of wrongdoing are without merit. “We are taking this very seriously,” Crane said Tuesday.
For 2019, Exelon earned $2.94 billion in net income on $34.44 billion in revenue. By comparison it earned $2 billion in net income on $36 billion in revenue in 2018. Exelon’s generally accepted accounting principles (GAAP) price per share increased from $2.07 in 2018 to $3.01 in 2019.
For the fourth quarter of 2019, Exelon posted $773 million in income on $$8.34 billion in revenue. By comparison, Exelon’s figures for the fourth quarter of 2018 were $152 million in net income on $8.81 billion in revenue. Exelon’s GAAP price per share for the fourth quarter increased from $0.16 in 2018 to $0.79.
Exelon Generation’s annual figures for 2019, according to Exelon’s SEC filing were $1.125 billion in net income on $18.924 billion in revenue. By comparison, its 2018 figures are $2 billion in net income on $20.44 billion in revenue.
The fourth quarter figures for Exelon Generation were $397 million in 2019 on $4.64 billion revenue. The fourth quarter of 2018 posted a loss of $178 million in net income on $5.07 billion in revenue.
Adjusted earnings guidance for the year is $3 to $3.30 per share.
