Oyster Creek, Closing Early, Now Dealing with Transformer Replacement

On Dec. 8, Exelon COO Chris Crane announced that the company will operate the Oyster Creek Generating Station in New Jersey until 2019, after which the plant will retire. That makes it an early retirement, as the plant is federally licensed to operate until 2029.

"The plant faces a unique set of economic conditions and changing environmental regulations that make ending operations in 2019 the best option for the company, employees and shareholders," Crane said. A specific retirement date in 2019 has not been set.

The decision is based on the cumulative effect of negative economic factors which has caused Oyster Creek’s value to decline, according to the company’s press release.  These factors include low market prices and demand, and the plant’s need for continuing large capital expenditures. Also, potential additional environmental compliance costs based on evolving water cooling regulatory requirements—at both the federal and state government levels—created significant regulatory and economic uncertainty. Due to Exelon’s decision to retire the plant early, the New Jersey Department of Environmental Protection will not require the company to install cooling towers at Oyster Creek.

The nearly decade-long duration of continued operations ensures a reliable supply of electricity for New Jersey until replacement power can be developed, addresses long-term concerns about using ocean water for plant cooling and delays any immediate economic impact on Lacey Township, Crane said.

Two days after the retirement announcement, Exelon announced that Oyster Creek operators had taken the station’s turbine offline Dec. 9 at 5 p.m. while employees prepared to replace one of the plant’s two main transformers. The station’s reactor remained online.

As part of the replacement plan, Oyster Creek will operate at reduced power while the station’s spare transformer is moved into place. The plant’s turbine will be taken offline once more over the next several weeks while the transformer is replaced with a spare unit and then again returned to full power.

Oyster Creek uses two transformers to convert the plant’s electrical output for use on the region’s grid. Each transformer weighs about 200 tons and is about 15 feet tall and nine feet wide.

Both of Oyster Creek’s transformers were replaced during the station’s recent refueling and maintenance outage, however, one of the new transformers returned abnormal indications during plant start-up procedures. The transformer was secured and the station has operated at reduced power since December 5 while personnel planned the safe removal of the transformer.

The plant, which began commercial operations in 1969, produces about 6 percent of New Jersey’s electricity.

Sources: Exelon, Bloomberg,