Three more nuclear power plants operated by Exelon Generation are at risk of early closure, parent company Exelon Corp. said in a Feb. 8 filing with the U.S. Securities and Exchange Commission.
“Generation’s Dresden, Byron, and Braidwood nuclear plants in Illinois are also showing increased signs of economic distress, which could lead to an early retirement, in a market that does not currently compensate them for their unique contribution to grid resiliency and their ability to produce large amounts of energy without carbon and air pollution,” according to Exelon’s latest 10-K report.
The Dresden Generating Station near the city of Morris operates two boiling-water reactors; their Nuclear Regulatory Commission licenses expire in December 2029 and January 2031. The Byron Generating Station near Byron features two pressurized-water reactors; their NRC licenses expire in October 2024 and November 2026. The Braidwood Generating Station near Braceville operates two pressurized-water reactors; their NRC licenses expire in October 2026 and December 2027.
Exelon this week did not provide additional details regarding the potential closures, including timelines for decisions to be made on each.
Exelon Generation’s own branch, Exelon nuclear, operates 22 reactors at 13 sites in Illinois, Maryland, New York, and Pennsylvania.
The potential retirements would be the latest in a series of nuclear plants operated by Exelon and other power providers to shut down in recent years before their licenses expire. The Chicago-based company in September retired its Oyster Creek Generating Station, which it aims to sell this year to Holtec International for decommissioning. Exelon Generation’s Three Mile Island plant in Pennsylvania is scheduled for closure by Sept. 30, 2019, absent assistance from the state.
In announcing plant closures, Exelon and its peers have highlighted threats including low natural gas prices for energy production and “market flaws” that work against nuclear power providers. Among those is the annual capacity auction by PJM Interconnection, which provides transmission in Illinois and other states for wholesale electricity.
In Exelon’s quarterly earnings call on Feb. 8, President and CEO Chris Crane noted that the Dresden plant in full, and the other two facilities in part, did not clear the 2018 PJM capacity auction.
Exelon in recent years has successfully pressed state governments to enact zero-emission credit programs to help support nuclear power facilities in Illinois and New York. These credits provide payments for power sources that do not emit greenhouse gases, in these cases atomic energy.
In Illinois, the company reversed its decision to close the Quad Cities and Clinton sites after passage in December 2016 of the Future Energy Jobs Act. Credits provided by New York’s Clean Energy Standard program persuaded Exelon to sustain operation of its Ginna and Nine Mile Point plants and to buy Entergy’s FitzPatrick Nuclear Power Plant.
The drive to backstop nuclear power has not produced results everywhere: Pennsylvania has yet to pass any sort of credits program, and the Federal Energy Regulatory Commission in 2018 rejected a Trump administration bailout of coal and nuclear power plants.
“We will continue to engage with stakeholders on state policies while advocating broader market reforms at the Federal level,” Crane said.
Exelon Corp. reported $152 million in net income, or $0.16 per share, on a generally accepted accounting principles (GAAP) basis for the fourth quarter of 2018. However, Exelon Generation reported a $178 million loss on a generally acceptable accounting principles (GAAP) basis, plummeting from income of $2.2 billion in the same period a year before.
The business also stumbled a bit on a non-GAAP basis: dropping from adjusted operating earnings of $261 million in fourth-quarter 2017 to $221 million in the most recent reporting period. The leading culprit was lower realized energy prices, but Generation got some help from zero-emission credits in Illinois, higher capacity prices, and savings from federal tax reform.
For the year, Exelon Generation recorded net income of $443 million, down from nearly $2.8 billion in 2017.
