Exelon’s Crane addresses Fitzpatrick deal, potential retirements

Exelon (NYSE:EXC) anticipate that the New York Public Service Commission could approve its proposed purchase of the Fitzpatrick nuclear plant in November, company officials said during an Oct. 26 earnings report.

At the same time, Exelon Chairman and CEO Chris Crane said during the conference call with financial analysts that retirement of the Clinton and Quad Cities nuclear plants in Illinois is very likely without passage of nuclear-friendly legislation in Illinois.

The board has given me authority to go forward with early retirements for Clinton and Quad Cities plants, if for Clinton adequate legislation is not passed during the spring legislative session that is scheduled to end May 31, and if for Quad Cities adequate legislation is not passed and the plant does not clear the upcoming PJM auction,” Crane said.” Otherwise, we plan to retire Clinton on June 1, 2017, and Quad Cities on June 1, 2018. This is consistent with planned refueling outage and capacity market obligations.”

As for Fitzpatrick, The company is proposing to acquire the facility from Entergy (NYSE:ETR), which had previously announced plans to retire the Upstate New York nuclear plant prior to the Exelon deal.

During the Exelon call, company officials said Federal Energy Regulatory Commission (FERC) approval has been required for November and Nuclear Regulatory Commission (NRC) approval is expected in the first quarter of 2017.

Like Entergy officials, Crane noted that a federal court challenge had been filed that could affect Fitzpatrick.

The Exelon nuclear fleet had a Q3 capacity factor of 96.3%, which helped generate the most megawatt hours (MWh) ever produced at the company reactors in a quarter. Another contributing factor was that there were no unplanned outages in the quarter.

Illinois inaction, other Clean Power Plan stay hurt distressed nukes

In June, Exelon filed its notification with the Nuclear Regulatory Commission (NRC) on its intent to close the Clinton and Quad Cities nuclear stations. In July, Exelon filed notice with PJM on its intent to retire Quad Cities and notice place it into the 2020-21 auction.

On or about Dec. 1, notification is due to the Midcontinent ISO (MISO) is due on intent to retire Clinton

The company also noted that the Illinois Legislature has a “veto session” scheduled Nov. 15 through Nov. 17. The company is still holding out hopes for securing some type of clean energy certification for its Illinois nuclear fleet.

The company would like to see Illinois go with something akin with the New York zero emission credit (ZEC) policy that would credit affected nuclear plants for their carbon dioxide (CO2) avoidance.

“But for reasons outside of our control, we have not seen progress in Illinois policy reforms, also the Supreme Court stay creates uncertainty regarding the EPA’s Clean Power Plan. Power prices have fallen to a 15-year low in PJM, causing the economics of Clinton and Quad Cities to further deteriorate,” Crane said.

The company also said that its regulated utilities enjoyed favorable weather and reduced storm activity during the third quarter. Meanwhile, Exelon Generation experienced lower cost to serve during the quarter and saw a strong performance at its Constellation unit.

Exelon GAAP earnings were 53 cents/share in Q3 2016 versus 69 cents/share in Q3 2015, the company reported.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.