Some of Exelon Corp.’s 10 nuclear power plants are unprofitable and may need to close in 2014 if “a path to sustainable profits” cannot be found, company President and CEO Chris Crane said in a Feb. 6 conference call to discuss fourth quarter results.
Exelon runs the nation’s largest nuclear fleet, operating 17 reactors in Illinois, Pennsylvania, and New Jersey. While Crane did not name the plants at risk, analysts believe the Clinton and Quad Cities plants, both in Illinois, are most in danger of shutdown.
Crane blamed low gas prices and renewable energy subsidies for the predicament. “It is clear that Exelon and other competitive generators are not really compensated for their reliable generation,” he said. Despite Exelon’s “best ever” year in power generation, “some of our nuclear units are unprofitable at this point in the current environment due to the low prices and bad energy policy that we are living with.”
“We continue to be a leading voice against subsidized generation,” Crane said.
Though some authorities in Illinois have been exploring ways to keep the plants open, Crane said that Exelon is not negotiating with the state on a long-term power purchase agreement (PPA). While it is exploring PPAs with other parties, “there are not many of those deals out there.” Crane said Exelon would make a decision by the end of the year.
Exelon would not be the first nuclear plant owner to shut down a plant on competitive pressures. Last year, Dominion shuttered its Kewaunee plant in Carlton, Wis. after failing to find a buyer; the plant was licensed to operate through 2033. Entergy has also announced plans to close its Vermont Yankee station this year because of an inability to compete in the current market. A challenging market for nuclear power also played a part in the decisions last year of Duke and Southern California Edison not to repair the damaged Crystal River and San Onofre plants.
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).