Exelon (NYSE:EXC) will re-evaluate the financial health of its Illinois nuclear fleet now that it appears unlikely the Illinois Legislature would actually pass a Low Carbon Portfolio Standard this session.
“We have not made any decisions regarding potential plant closures at this time. It has become apparent that the LCPS legislation is not likely to be enacted by the General Assembly at this time, even though the current legislative session will be extended,” an Exelon representative said in an email response to GenerationHub on June 1.
Exelon has been advocating the low-carbon standard (HB 3293 / SB 1585) as a market-based proposal to recognize the non-carbon baseload generation from Quad Cities and its other nuclear plants in the state.
“Even so, we will continue our dialogue with Illinois policymakers regarding policy reforms which would better recognize the full value that our nuclear plants provide for Illinois,” Exelon representative Krista Lopykinski went on to tell GenerationHub.
“At the same time, we will continue to analyze the current and expected economics of each of our plants, especially in light of upcoming market capacity auctions,” Lopykinski added.
“Also, in September, we have an obligation to inform PJM – the organization which administers these auctions – if any of our plants will not be participating in future auctions,” the Exelon spokesperson said. “As our decision-making proceeds, we will provide updates – both publicly and to the many directly affected parties, most especially our employees. We are grateful for the widespread and strong support expressed by many interests across Illinois, including labor groups, business leaders, plant host community leaders, our employees, and tens of thousands of Illinois citizens.”
The Exelon representative was responding to a GenerationHub inquiry on the long-term status of the Quad Cities station in Illinois, one of the nuclear plants rumored to be in trouble during the current market.
Exelon has argued that Illinois would have a difficult time complying with the Environmental Protection Agency (EPA) Clean Power Plan to cut carbon dioxide (CO2) if some of the nuclear units are shuttered. Critics of the Exelon-backed legislation have dismissed it as an Exelon “bailout.”
Many industry observers agree that non-utility nuclear plants in restructured states are having a difficult time in a market dominated by generation fueled by cheap natural gas, and renewable energy projects backed by tax incentives.
Such market economics have often been cited in the retirement of the Dominion (NYSE:D) Kewaunee nuclear plant in Wisconsin and the Entergy (NYSE:ETR) Vermont Yankee plant in Vermont.
Quad Cities Units 1 and 2 are boiling water reactors (BWRs) located in Rock Island County, Ill. Each unit has a nameplate capacity of roughly 1,000 MW. Quad Cities’ capacity factor was 94.4% in 2014 and 94.3% in 2013, according to Exelon.