Exelon Generation Co. on Thursday said it would retire two nuclear power plants in Illinois over the next 15 months, years if not decades ahead of the expiration of their federal licenses.
The Byron Generating Station in Ogle County will shut down in September 2021, followed by the Dresden Generating Station in Grundy County in November of that year. The two facilities are no longer economically viable, facing revenue shortages in the hundreds of millions of dollars, Chicago-based Exelon said in a filing with the Securities and Exchange Commission.
“The primary factors contributing to the deteriorating economic value of Byron and Dresden include significant declines in plant revenues due to prolonged periods of low wholesale power prices, market rules that allow fossil fuel plants to underbid clean resources in the PJM capacity auction, and the absence of federal or state policies that place a value on nuclear energy for its ability to produce electricity without carbon or air pollution while contributing to grid reliability and resiliency,” the 8-K filing says. “All of these factors contribute to deteriorating economic value and losses for the foreseeable future.”
Each plant has two operating reactors: Byron Units 1 and 2 are licensed by the Nuclear Regulatory Commission through, respectively, 2044 and 2046; Dresden’s Units 2 and 3 are licensed until 2029 and 2031 (Unit 1 shut down in 1978).
The early closures will generate a projected $200 million to $300 million in one-time costs this year for Exelon and its Generation subsidiary, the 8-K says. These involve “materials and supplies inventory reserve adjustments, employee-related costs, and construction work-in-progress impairments, among other items.” The companies believe they could incur up to $50 million in additional charges in 2021.
Exelon said it has sufficient funding assurance for decommissioning the Dresden reactors, but that it might not meet the NRC’s minimum funding requirements for Byron “due to the earlier commencement of decommissioning activities and a shorter time period over which the nuclear decommissioning trust fund (NDTF) investments could appreciate in value.” Exelon said it could be required to provide additional funding assurance for Byron.
