The Nuclear Regulatory Commission (NRC) has approved the direct transfer of operating licenses for five commercial power reactors and three spent fuel storage installations held by Constellation Energy Nuclear Group (CENG) to Exelon (NYSE:EXC).
NRC announced its approval of the license transfers April 1 following a March 25 approval.
Exelon and Électricité de France (EDF) said in a joint announcement last July that they had agreed for the CENG nuclear units, located in Maryland and New York, to be blended into the Exelon Nuclear fleet.
Michael J. Pacilio, Exelon Nuclear’s President and Chief Nuclear Officer, will lead the newly expanded fleet, which will operate under Exelon Nuclear’s management model, a driver of success and consistent operations at all stations. Maria G. Korsnick will remain chief nuclear officer of CENG, Exelon said in an April 1 news release.
Exelon currently owns 50.01% of CENG, which is jointly owned with a U.S. affiliate of the French EDF Group. CENG currently holds the operating licenses for five nuclear power reactors at three plant sites – Calvert Cliffs 1 and 2, Nine Mile Point 1 and 2, and R.E. Ginna – as well as associated independent spent fuel storage installations.
EDF will continue to own the remaining 49.99 % of CENG, although the agreement last summer does open the door to a potential purchase by Exelon.
Long Island Power Authority owns 18% of Nine Mile Point 2 and is not affected by the license transfers. Existing Exelon licenses will not be affected.
Exelon had first become a minority partner in CENG back in 2012.
The NRC approved the indirect transfer of the licenses in February 2012 when Exelon merged with Constellation Energy Group, CENG’s parent company. The current direct transfer allows Exelon to integrate the operations of the facilities into its existing nuclear fleet.
The transfer of the licenses will not result in any physical changes to the facilities. The on-site organizations and plant staffs, including senior managers, will remain essentially unchanged by the license transfers. Exelon is already the nation’s largest nuclear operator. NRC found that public health and safety would not be hurt by the license transfers.
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. In those days before Fukushima and before the ongoing natural gas boom had hit high gear, EDF had hoped to be part of a major nuclear power expansion in the United States.
Following the Exelon and Constellation merger in 2012, Exelon Generation and CENG continued to operate autonomously as separate companies until today’s integration.
Integration already underway; but not any sale talks
“The integration of the CENG sites has been taking place over the past several months and will continue through the end of the year,” an Exelon spokesperson said April 1. “This includes refueling outage support.”
Under the terms of the deal announced by EDF and Exelon last summer, the parties agreed that the CENG nuclear licenses would move to Exelon. 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.
“Our goal is to maximize the value of the CENG fleet under the current ownership structure. Any longer-term changes in ownership would be a result of EDF’s exercise of the put option or otherwise a matter of discussion between the partners,” the Exelon spokesperson said.
The CENG plants involved in the deal are capable of generating more than 3,900 MW at full power.