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Researched by Industrial Info Resources (Sugar Land, Texas)--Exelon Corporation's (NYSE:EXC) (Chicago, Illinois) decision to pull the plug on the Three Mile Island Generating Station in Pennsylvania is the latest example of the financial problems besetting many nuclear power plant operators, who find it harder to compete in an age of cheap natural gas. Exelon, which announced Tuesday that it will close Three Mile Island in 2019, is blaming Pennsylvania leaders for failing to come up with a plan to save the generating station.
Last week, Exelon said that the 810-megawatt facility failed to secure contracts to sell electricity in the latest capacity auction by PJM Interconnection (Valley Forge, Pennsylvania), the grid operator for the 13-state region including Pennsylvania.
Three Mile Island "did not clear in the past three PJM base residual auctions. [The power station] remains economically challenged as a result of continued low wholesale power prices and the lack of federal or Pennsylvania energy policies that value zero-emissions nuclear energy," Exelon said in a press statement, adding that Three Mile Island has not been profitable in five years.
Three Mile Island is notorious for a partial reactor core meltdown in 1979, but current permits would allow it to stay open until 2034.
"Absent policy reforms, the loss of Pennsylvania nuclear plants would increase air pollution, compromise the resiliency of the electric grid, raise energy prices for consumers, eliminate thousands of good-paying local jobs and weaken the state's economy," the company said in a press statement. Three Mile Island directly employs 675 workers and contracts another 1,500 local union workers for refueling outages, the company said, adding that the power station provides more than $1 million in state property taxes each year.
"Despite producing 93% of the Commonwealth's emissions-free electricity and avoiding 37 million tons of carbon emissions--the equivalent of keeping 10 million cars off the road every year--nuclear power is not included in the state's Alternative Energy Portfolio Standard (AEPS). Yet 16 clean power sources including solar, wind and hydro energy are supported by this state energy policy," Exelon continued.
Exelon said it will terminate capital investment projects required for long-term operation of the power station, and will cancel 2019 fuel purchases and outage planning. Industrial Info is tracking $46 million in project activity at Three Mile Island, including a $23 million refuel outage planned for fourth-quarter 2017. Amending the AEPS to include nuclear power is one potential way to save the power station from early retirement, but other options include a zero emissions credit program, similar to the approach being implemented in Illinois and New York to preserve its nuclear generation, Exelon said.
"Like New York and Illinois before it, the [Pennsylvania] Commonwealth has an opportunity to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide," Chief Executive Officer Chris Crane said in a press statement.
In Illinois, state leaders passed legislation to provide financial support to keep open two nuclear power plants owned by Exelon. Similar to legislation passed in New York, the Illinois legislation put a price tag on the value of nuclear power's non-greenhouse gas (GHG)-emitting properties. Exelon will collect about $235 million annually to keep the Quad Cities and Clinton nuclear power stations operating. Quad Cities is a two-unit, 1,848-megawatt plant that came online in 1972. Clinton is a one-unit, 1,055-MW plant that began generating electricity in 1987. For related information, see December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants.
New York's Clean Energy Standard, approved last year, includes a multi-billion-dollar subsidy to keep three upstate nuclear generators operating. This includes the James FitzPatrick Nuclear Power Station, which was purchased by Exelon earlier this year. For more information, see August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation.
However, efforts in other states to secure subsidies to save non-economic nuclear power stations have not seen smooth sailing. Prospects have dimmed for Ohio state legislation, which is supported by FirstEnergy Corporation (NYSE:FE) (Akron, Ohio), that would increase electric prices by up to $300 million annually for a period of 16 years to compensate owners of nuclear power plants for their non-emitting characteristics. For related information, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Last week, Exelon said that the 810-megawatt facility failed to secure contracts to sell electricity in the latest capacity auction by PJM Interconnection (Valley Forge, Pennsylvania), the grid operator for the 13-state region including Pennsylvania.
Three Mile Island "did not clear in the past three PJM base residual auctions. [The power station] remains economically challenged as a result of continued low wholesale power prices and the lack of federal or Pennsylvania energy policies that value zero-emissions nuclear energy," Exelon said in a press statement, adding that Three Mile Island has not been profitable in five years.
Three Mile Island is notorious for a partial reactor core meltdown in 1979, but current permits would allow it to stay open until 2034.
"Absent policy reforms, the loss of Pennsylvania nuclear plants would increase air pollution, compromise the resiliency of the electric grid, raise energy prices for consumers, eliminate thousands of good-paying local jobs and weaken the state's economy," the company said in a press statement. Three Mile Island directly employs 675 workers and contracts another 1,500 local union workers for refueling outages, the company said, adding that the power station provides more than $1 million in state property taxes each year.
"Despite producing 93% of the Commonwealth's emissions-free electricity and avoiding 37 million tons of carbon emissions--the equivalent of keeping 10 million cars off the road every year--nuclear power is not included in the state's Alternative Energy Portfolio Standard (AEPS). Yet 16 clean power sources including solar, wind and hydro energy are supported by this state energy policy," Exelon continued.
Exelon said it will terminate capital investment projects required for long-term operation of the power station, and will cancel 2019 fuel purchases and outage planning. Industrial Info is tracking $46 million in project activity at Three Mile Island, including a $23 million refuel outage planned for fourth-quarter 2017. Amending the AEPS to include nuclear power is one potential way to save the power station from early retirement, but other options include a zero emissions credit program, similar to the approach being implemented in Illinois and New York to preserve its nuclear generation, Exelon said.
"Like New York and Illinois before it, the [Pennsylvania] Commonwealth has an opportunity to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide," Chief Executive Officer Chris Crane said in a press statement.
In Illinois, state leaders passed legislation to provide financial support to keep open two nuclear power plants owned by Exelon. Similar to legislation passed in New York, the Illinois legislation put a price tag on the value of nuclear power's non-greenhouse gas (GHG)-emitting properties. Exelon will collect about $235 million annually to keep the Quad Cities and Clinton nuclear power stations operating. Quad Cities is a two-unit, 1,848-megawatt plant that came online in 1972. Clinton is a one-unit, 1,055-MW plant that began generating electricity in 1987. For related information, see December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants.
New York's Clean Energy Standard, approved last year, includes a multi-billion-dollar subsidy to keep three upstate nuclear generators operating. This includes the James FitzPatrick Nuclear Power Station, which was purchased by Exelon earlier this year. For more information, see August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation.
However, efforts in other states to secure subsidies to save non-economic nuclear power stations have not seen smooth sailing. Prospects have dimmed for Ohio state legislation, which is supported by FirstEnergy Corporation (NYSE:FE) (Akron, Ohio), that would increase electric prices by up to $300 million annually for a period of 16 years to compensate owners of nuclear power plants for their non-emitting characteristics. For related information, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
