Exelon Generation said EDF Group—a French integrated electricity company—is exercising a put option to sell its 49.99% interest in the R.E. Ginna, Nine Mile Point, and Calvert Cliffs nuclear energy facilities. The two companies will now begin negotiations for Exelon to acquire full ownership of the plants.
EDF’s involvement in the facilities was through the Constellation Energy Nuclear Group (CENG), a joint venture between it and Constellation Energy, which was negotiated in 2009. Exelon acquired its majority stake in the plants as part of a merger with Constellation Energy, a deal that closed in March 2012.
EDF said the disposal of CENG shares is part of a previously announced non-core-asset disposal plan. The put option could have been exercised by EDF anytime between Jan. 1, 2016, and June 30, 2022. A transaction price will follow from the determination of the fair market value of CENG shares pursuant to the contractual provisions of the put option agreement, EDF said.
“Since Exelon Generation took over operations, we have created value for both Exelon and EDF by integrating the three plants into the nation’s largest and best-run nuclear fleet. Leveraging the Exelon management model, we’ve improved overall fleet performance and efficiency while reducing costs in a challenging market environment,” Chris Crane, Exelon president and CEO, said in a statement. “We have worked collaboratively with EDF leadership as co-owners of these three nuclear plants and look forward to partnering with them in a productive process to purchase their ownership stake.”
The facilities consist of the single-unit 576-MW R.E. Ginna Nuclear Power Plant (Figure 1) and the dual-unit 1,907-MW Nine Mile Point Nuclear Station, which are both in upstate New York, and the dual-unit 1,756-MW Calvert Cliffs Nuclear Power Plant in Maryland. The upstate New York plants were under economic pressure and faced possible closure a few years ago, but subsidies approved by the state have kept the units financially viable.
|1. The 576-MW R.E. Ginna Nuclear Power Plant is located in Wayne County, New York. The plant celebrated 50 years of power generation on Nov. 9, 2019. The plant achieved its highest-ever capacity factor—99.6%—in 2016. Courtesy: Exelon Corp.
Exelon said if an agreement cannot be reached, the price will be set through a third-party arbitration process to determine fair market value. The transaction will require approval by the New York Public Service Commission, the Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission. The process and regulatory approvals “could take one to two years or more to complete,” Exelon said.
EDF reports generating 584 TWh of electricity in 2018—78% of which was from nuclear power. An earthquake in southern France on Nov. 11 disrupted production from EDF’s Cruas nuclear power plant, forcing the company to adjust its projected output in 2019. EDF said it now expects to generate between 384 TWh and 388 TWh from nuclear facilities this year.
Exelon Generation operates the largest U.S. fleet of nuclear plants with more than 18,700 MW from 21 reactors at 12 facilities in Illinois, Maryland, New York, and Pennsylvania. It also operates a diverse mix of wind, solar, landfill gas, hydroelectric, natural gas, and oil facilities in 19 states with more than 12,300 MW.
—Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).