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Share Name | Share Symbol | Market | Type |
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Exelon Corp | NYSE:EXC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 48.80 | 0 | 01:00:00 |
By Rebecca Smith
Exelon Corp. said Thursday that it will retire two money-losing nuclear plants in Illinois after state lawmakers declined to pass legislation that would have helped keep them running.
The company, which owns utilities serving Chicago, Philadelphia and Baltimore as well as many power plants, said it will shut down its Clinton plant in Clinton, Ill., in mid-2017 and Quad Cities plant in Cordova, Ill., in mid-2018. The plants lost $800 million in the past seven years.
The announcement underscores the impact that low wholesale electricity prices are having on owners of older power plants -- especially nuclear facilities, many of which are threatened with closure.
Prices for wholesale electricity recently hit a 15-year low and experts expect them to rise too slowly to help generators much. Fifteen to 20 nuclear reactors are considered at risk of premature closure in the next five to 10 years, according to the Nuclear Energy Institute, a trade group.
Fitch Ratings said the Exelon decision "may precipitate other nuclear plant closures" for Exelon plants, possibly including the Byron, Ginna, Nine Mile Point and Three Mile Island plants in Illinois, New York and Pennsylvania.
Other utilities, including Entergy Corp. and Dominion Resources Inc., already have announced nuclear closures for financial reasons.
The Illinois legislature adjourned Tuesday without acting on legislation that would have rewarded nuclear plants and other carbon-free generators that help the state meet its environmental goals. The bill included other provisions that would have imposed new charges on energy consumers.
Experts said there is still a slim possibility the legislation could move forward in a special session but the utility said it wasn't bluffing.
"To be clear, we have made the decision to shut the plants down," Exelon said.
Exelon became the biggest owner of nuclear plants in the U.S. in the 1990s, riding a wave of industry consolidation, and within years had turned problem-prone units into smooth running, highly profitable plants. The good times lasted about a decade. But the gas fracking boom and other changes in electricity markets after 2009 sent electricity prices tumbling.
While the industry has tried to garner compensation that recognizes nuclear reactors' special attributes such as their lack of air pollution, those efforts have largely been unsuccessful.
The Nuclear Energy Institute said Thursday that the pending retirements marked an "alarming trend" and will make it harder for states to meet carbon reduction goals set by the Environmental Protection Agency.
A study by the state of Illinois found that the two plants' closures would raise wholesale energy costs by $439 million to $645 million annually, depending on the price of natural gas and other factors. Gas generation is generally considered to be the most likely replacement.
The Union of Concerned Scientists, an environmental group, said its own analysis found that by spending more on energy efficiency and reviving a stalled renewable energy mandate, Illinois could replace the plants' 2,500 megawatts without fouling the air or jacking up utility bills.
Even so, Steve Clemmer, the group's director of energy research and analysis, said "We do see value in nuclear power helping to address climate change."
Write to Rebecca Smith at rebecca.smith@wsj.com
(END) Dow Jones Newswires
June 02, 2016 17:01 ET (21:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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