Citing the lack of progress on Illinois legislation to help distressed nuclear plants, Exelon (NYSE:EXC) officially announced June 2 that it will retire the money-losing Clinton and Quad Cities stations.
The move comes as no surprise given that Exelon has previously said it would close the plants, which have together lost $800m over seven years, without legislation.
The Clinton Power Station in Clinton, Ill., will close on June 1, 2017, and the Quad Cities Generating Station in Cordova, Ill., will close on June 1, 2018. Quad Cities and Clinton have experienced big financial losses despite being two of Exelon’s best-performing plants, the company said in a news release.
The announcement came just one day after Exelon had announced a record refueling outage at the Clinton plant. Nuclear Energy Institute (NEI) President and CEO Marvin Fertel warned recently that more retirements could be on the way. Management of the Omaha Public Power District (OPPD) has recommended that the 478-MW Fort Calhoun nuclear power plant in Nebraska close at the end of this year.
While the Illinois legislative session has not ended, the path forward for consideration of the Next Generation Energy Plan legislation is not clear. As a result, Exelon has begun taking necessary steps to shut down the two nuclear plants. These include:
- Making permanent shutdown notifications to the Nuclear Regulatory Commission (NRC) within 30 days;
- Terminating capital investment projects required for long-term operation of Clinton and Quad Cities, which will impact more than 200 workers;
- Immediately taking one-time charges of $150 million to $200 million for 2016, and accelerating approximately $2 billion in depreciation and amortization through the announced shutdown dates; and
- Cancelling fuel purchases and outage planning, which will impact more than 1,000 outage workers.
Exelon has and will continue to brief the office of Illinois Gov. Bruce Rauner (R), legislative leaders, the Illinois Commerce Commission, Illinois Environmental Protection Agency, Illinois Power Agency, other relevant state agencies, and host community leaders, on developments as it executes the shutdown plan.
Clinton is a single-unit boiling water reactor (BWR). It has a nameplate capacity of about 1,100 MW. Quad Cities is a two-unit BWR facility with a total nameplate capacity of more than 2,000 MW.
Exelon employs nearly 700 workers at Clinton and 800 workers at Quad Cities.
The pro-nuclear group, Nuclear Matters, said Illinois will be hard-pressed to meet carbon reduction goals without the lost nuclear power.
“Illinois counts on nuclear plants to provide 92 percent of its carbon-free electricity. The absence of Clinton and Quad-Cities will make it near impossible for the state to reach its carbon reduction goals, including those put forth by the Environmental Protection Agency’s Clean Power Plan,” according to Nuclear Matters.
CEO Crane regrets closing plants
This is an extremely difficult day for the 1,500 employees who operate these plants safely and reliably every day, and the communities that depend on them for support,” said Chris Crane, Exelon president and CEO. “We have worked for several years to find a sustainable path forward in consultation with federal regulators, market operators, state policymakers, plant community leaders, labor and business leaders, as well as environmental groups and other stakeholders. Unfortunately, legislation was not passed, and now we are forced to retire the plants.”
Exelon will continue to work with stakeholders on passing the Next Generation Energy Plan that is critical to the state’s environment and economy, the company said.
Among other features, the Next Generation Energy Plan would nearly double energy efficiency programs, provide $1bn in funding for low-income assistance, jumpstart solar development with rebates and $140m in new funding, and reduce the fixed customer charge for energy delivery by 50%.