The three commercial nuclear power plants run by the Constellation Energy Nuclear Group (CENG) in New York and Maryland will be operationally integrated into the Exelon (NYSE: EXC) nuclear fleet over the next nine months, CENG co-owners reported July 30.
The consolidation of the two commercial U.S. nuclear fleets includes transferring the operating licenses of the plants to Exelon Generation, Exelon and Électricité de France (EDF) said in a joint announcement.
Under the terms of the deal, the CENG plant operating licenses will be transferred to Exelon; Exelon will integrate the CENG fleet under its management model; Exelon will lend $400m to CENG to support a special dividend to EDF; and EDF will retain an option to sell its CENG stake to Exelon at fair market value between 2016 and 2022.
CENG will remain a legal entity governed by a board of directors comprising five EDF and five Exelon board members. Exelon will continue to own 50.01% of CENG, EDF 49.99%. CENG’s chief nuclear officer Maria Korsnick will become acting chief executive officer of CENG in addition to her CNO role.
The three CENG plants include five reactors capable of generating more than 3,900 MW at full power.
They include: R.E. Ginna in Ontario, NY, a single 577-MW pressurized water reactor (PWR); Nine Mile Point in Scriba, NY, which has two boiling water reactors (BWRs) totaling 1,595 MW; and Calvert Cliffs in Lusby, Md., two PWRs totaling 1,753 MW.
An application to transfer the operating licenses from CENG to Exelon will be submitted to the NRC within days. Review and approval typically requires six to nine months.
CENG was formed as a joint venture between Constellation Energy and EDF in 2009 to hold and oversee operations of the three Constellation nuclear plants.
Exelon, based in Chicago, and Constellation, based in Baltimore, completed their merger on March, 12, 2012.
“This is a logical step forward in the overall integration of Exelon and Constellation following our 2012 merger,” said Michael Pacilio, president and chief nuclear officer of Exelon Nuclear, the division that operates the company’s commercial nuclear fleet. “CENG is a strong nuclear operator with excellent results and safety performance that fits well with our existing operations. This consolidation will benefit both Exelon and our partner EDF and allows us to take advantage of additional synergies and streamlining.”
A few years ago the EDF group had hoped its Constellation venture would help it develop a significant U.S. fleet. However, the NRC rejected its application to develop the Calvert Cliffs 3 project because of too much foreign ownership.