Before Dominion (NYSE:D) announced in 2012 that it planned to shut down the 556-MW Kewaunee merchant nuclear plant in Wisconsin, the company tried to sell the facility.
“Not a single bidder showed up. Not a single bidder” wanted to buy this plant with a 20-year license renewal from NRC, Dominion CEO Thomas Farrell III told the Nuclear Energy Assembly May 14 in Washington, D.C.
With that remark, Exelon (NYSE:EXC) CEO Christopher Crane said his company took a look at Kewaunee, as it does most nuclear units that come onto the market. But Exelon decided not to bid unless Dominion was willing to fork over $100m for another company to take it off its hands.
Farrell and Crane made their remarks during a CEO panel at the annual gathering sponsored by the Nuclear Energy Institute (NEI).
In a postmortem on Kewaunee, Farrell said the pressurized water reactor was a victim of the harsh economics facing merchant nuclear units in a time of weak demand, low power prices and inexpensive natural gas.
On top of that, the Midwest ISO (MISO) “doesn’t have a capacity market at all,” Farrell said. “At least PJM has a capacity market.” Crane agreed that MISO’s lack of a capacity market hurt the Kewaunee scenario.
Crane quipped that Exelon is already recruiting some of the nuclear staff from the Kewaunee plant that closed May 7.
Dominion purchased Kewaunee in 2005 from a group of Midwestern utilities. But Dominion was never able to put together a Midwest merchant nuclear fleet. Likewise, the company was not able to renew the nuclear plant’s supply contracts with Midwest utilities, Dominion said.
