Capacity market changes likely not enough to keep Exelon's Quad City nuke online
- Changes in the PJM Interconnection market will not be sufficient to keep Exelon's Quad Cities nuclear plant online, as falling gas prices have kept the 1,800 MW plant from making a profit.
- While enhanced capacity standards would mean hundreds of millions more in revenue, Crain's Chicago Business reports that would not be sufficient to keep the plant operating.
- Exelon President and CEO Christopher Crane told analysts this week that the company will make a decision on the future of Quad Cities in September, though should the company opt to shutter the facility that call could still be reversed.
Exelon CEO Crane made clear in his company's earnings call this week that the outlook is grim for Quad Cities, the nation's largest nuclear facility.
"We have certain regulatory and operational triggers in September that require us to make some tough choices on the specific assets this fall, particularly in light of the continued pressure on the power markets," he told analysts. "So we are continuing on with our disciplined plan on evaluating the assets and their likelihood to stay within the stack, and we'll bring that to closure with our decision in September."
PJM has enacted "enhanced" capacity market rules that will send more revenue to generators who can keep running in adverse conditions, but Crane said that likely wouldn't be enough. His comments come just a week after Bloomberg identified Exelon as one of the primary beneficiaries of the new rules.
Exelon's Clinton nuke, which operates in the Midcontinent ISO market, could face a similar fate but that decision will not be made until next year.
Should Exelon opt to close Quad Cities, Crain's reported the decision could be reversed, up to six months after. That means Illinois lawmakers could still step in and pass measures to support the plant — something it declined to do in its latest session.
"We were disappointed that we were not able to get this outcome before the session ended, but understand where the state is focused right now on its budget priorities," Crane said. "The nuclear plants provide significant value to the state and its economy, and it's mostly important to its consumers."
Exelon reported second quarter adjusted operating earnings of $509 million, or 59 cents per share, compared with 51 cents per share a year ago.
- Crain's Chicago Business Exelon sees little hope of saving Quad Cities nuke
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