Future unclear for Exelon’s QC plant after failure to secure contract

The future of three Exelon nuclear power plants, including the Quad Cities and Byron facilities, was unclear after they failed to secure contracts to provide power to the electrical grid for 2017-2018.

In the annual PJM Interconnection auction held the week before Memorial Day, Exelon’s two Illinois plants and their Oyster Creek plant in New Jersey submitted bids that priced them out of the auction to supply power to the grid for the period from June 1, 2017 to May 31, 2018. PJM administers the wholesale power market, and holds an auction every spring to secure competitive bids from suppliers to provide power three years in the future.

Power from the PJM Interconnection grid goes to 61 million people in 14 states including Illinois.

Exelon “relies heavily on revenue from the so-called capacity auction” to keep its nuclear plants running, according to the Chicago Tribune, which also reported Exelon has previously threatened to close its nuclear plants because of their struggle to compete with less expensive electricity produced by wind generators and natural gas.

“(T)he federal Production Tax Credit (PTC) for wind power is large enough for operators to make a profit even when the power price is below zero, and while fossil-fired plants can minimize losses by reducing output or shutting down, nuclear operators have sometimes found themselves paying money to the grid to take their power,” according to World Nuclear News.

Exelon operates 21 reactors in the United States. The company reportedly had previous plans to close the Oyster Creek plant in New Jersey in 2019, rather than spending $800 million to build cooling towers to comply with new state environmental regulations. The two Quad Cities reactors at Cordova are licensed until 2032, and the two reactors at Byron are licensed until 2024 and 2026.

A spokesman at the Quad Cities Generating Station said the company has no plans to take any action based solely on the results of the 2014 PJM auction.

“(W)e have previously committed to not make any decisions about our economically challenged nuclear plants in Illinois before June 2015,” said Exelon Generation Communications Manager Bill Stoermer.  “However, the combined effect of low wholesale power prices and the unintended consequences of current energy policies continues challenging the economics of several of Exelon’s nuclear units.”

Stoermer said the Illinois House of Representatives recently introduced a resolution calling on federal and state regulators to consider reforms that would support continued operation of nuclear power plants.  He also said the PJM auction was not the only factor that would determine the future of any of their nuclear facilities, including the Quad Cities Generating Station.

The Quad Cities facility employs approximately 750 people.

2 comments

  • Troy

    When they close those nukes, the stock price will rise by a lot more than 3%. Btw, I think you mean MW – Hour and not MW/day.

Comments are closed.

Follow

Get every new post delivered to your Inbox.

Join 922 other followers