Legal & Regulatory

Exelon Announces Three Mile Island Nuclear Plant to Close in 2019

Exelon Corp. said it plans to retire the Three Mile Island (TMI) nuclear power plant around September 30, 2019, unless policy reforms are enacted in Pennsylvania.

The company used a similar ploy in Illinois to pressure lawmakers into passing the state’s Future Energy Jobs bill, which provides subsidies for nuclear power plants. In that case, Exelon announced the closure of the Clinton and Quad Cities stations, only to reverse the decision once the legislation received the necessary support.

TMI has been in jeopardy for some time. Last year, TMI failed to clear PJM’s 2019–2020 capacity auction. At the time, Exelon CEO Chris Crane said, “The capacity market alone can’t preserve zero-carbon emitting nuclear plants that are facing the lowest wholesale energy prices in 15 years.”

This year, PJM’s prices were even lower. Last week the regional transmission organization announced a 2020–2021 base residual auction price of $76.53/MW-day for most resources in its footprint. Both TMI and Quad Cities failed to clear the PJM auction.

“Today is a difficult day, not just for the 675 talented men and women who have dedicated themselves to operating Three Mile Island safely and reliably every day, but also for their families, the communities and customers who depend on this plant to produce clean energy and support local jobs,” Crane said in a press release.

Exelon said it is taking the first steps to shut down the plant. Items include sending PJM a deactivation notice and making permanent shutdown notifications to the Nuclear Regulatory Commission within 30 days, terminating capital investment projects needed for long-term operation of the plant, and canceling 2019 fuel purchases and outage planning.

One solution the company suggested was amending Pennsylvania’s Alternative Energy Portfolio Standard to include nuclear power. According to Exelon, nuclear power provides 93% of the state’s emissions-free electricity and avoids 37 million tons of carbon emissions, but its zero-emission attributes are not properly rewarded. Another option would be to establish a zero-emissions credit program, similar to the approach implemented in Illinois and New York.

“Like New York and Illinois before it, the Commonwealth has an opportunity to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide. We are committed to working with all stakeholders to secure Pennsylvania’s energy future, and will do all we can to support the community, the employees and their families during this difficult period,” Crane added.

The Illinois and New York subsidies are being contested, however. A group of generators filed suit in federal court last October to block the New York incentive program. The plaintiffs argue that the plan interferes with wholesale power prices in violation of the Federal Energy Regulatory Commission’s authority over interstate power sales.

In mid-February, the Electric Power Supply Association, Dynegy, Eastern Generation, NRG Energy, and Calpine Corp. filed a federal lawsuit against the State of Illinois, challenging its nuclear subsidies too. Monitoring Analytics—PJM’s independent market monitor—filed a motion with the U.S. District Court for the Northern District of Illinois about a month later to intervene as a plaintiff in the lawsuit as well.

If the subsidies were to be overturned in either case, it would be a huge loss for Exelon and could put at least a few nuclear plants back at risk for early retirement.

Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)

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