Exelon (NYSE:EXC) reported May 25 that its two of its nuclear plants, Quad Cities in Illinois and Three Mile Island in Pennsylvania, did not clear the PJM Interconnection capacity auction for the 2019-2020 planning year and will not receive capacity revenue for that period.
While a portion of the Byron nuclear plant’s capacity did not clear in the auction, the Illinois plant is committed to operate through May 2020. The company’s other nuclear plants in PJM cleared in the auction, except Oyster Creek in New Jersey, which is scheduled to retire in 2019 and did not participate in the auction.
The PJM auction cleared 167,305 MW of unforced capacity, PJM reported May 24. More than 6,500 MW of new generating resources were offered in the auction. The auction results take effect June 2019.
Capacity markets providing little help for Exelon nuclear units
“The capacity market alone can’t preserve zero-carbon emitting nuclear plants that are facing the lowest wholesale energy prices in 15 years,” Exelon President and CEO Chris Crane said in a news release.
“Without passage of comprehensive energy legislation that recognizes nuclear energy for its economic, reliability and environmental benefits to Illinois, we will be forced to close Quad Cities and Clinton [in Illinois], resulting in the loss of jobs and economic activity, higher energy prices for consumers, and a dramatic increase in carbon emissions that will make it harder and more expensive for Illinois to meet its clean energy goals.”
Exelon has been saying for the past couple of years that it has a number of nuclear units that are losing money and are in danger of closing. The company has pushed, unsuccessfully so far for Illinois legislation to help its endangered nuclear units in that state.
Crane has also noted that Illinois and other markets will need carbon-free nuclear output to comply with the Environmental Protection Agency (EPA) Clean Power Plan. But the EPA regulation, which would require states to cut power sector CO2 emissions 32% by 2030, has been stayed until it is litigated.
Earlier this month, Exelon announced that it would retire its Quad Cities and Clinton nuclear facilities if adequate legislation is not passed during the spring Illinois legislative session scheduled to end May 31.
Quad Cities and Clinton have lost a combined $800m in the past seven years, despite being two of Exelon’s highest-performing plants.
Clinton operates in the Midcontinent ISO (MISO) market. Despite clearing in MISO’s recent one-year forward capacity auction, Clinton will not receive enough revenue to avoid continued losses.
Exelon is touting legislation dubbed the Next Generation Energy Plan legislation would preserve the two at-risk Illinois nuclear plants and their zero-emissions benefits. The measure would also promote development of clean energy in the state.
The NGEP includes implementation of a zero emission standard that would specifically target at-risk nuclear plants, making Illinois one of the first states to recognize the zero-carbon benefits of nuclear energy. The legislation — which has strong bipartisan, community and labor support – would nearly double energy efficiency programs and jumpstart solar development with rebates and $140m per year in new funding, Exelon said.