Report: Exelon Illinois nuclear bill could subsidize Dynegy coal plants

Dive Brief:

  • Exelon is continuing its push for Illinois legislation that would support a pair of its struggling nuclear facilities, and is reportedly in talks with Dynegy over capacity provisions for its coal plants that might bring the company on board with its proposal, the Illinois Times reports. 
  • Dynegy has opposed the proposed nuclear subsidies, but the Times reports Exelon is negotiating a provision that could raise capacity payments to the independent power producer's coal facilities.
  • Exelon wants to push the bill through during Illinois' veto session, which begins this week. The company is calling its bill the Future Energy Jobs Bill, to emphasize the role the preservation of the nuclear plants would play in the state’s economy.

Dive Insight:

Illinois Times has a behind-the-scenes look at Exelon's attempts to wrangle support for nuclear subsidies. The company is facing opposition from environmentalists and competitors, but the capacity provisions could potentially bring Dynegy on board.

Previously that provision was not included in the bill, but could be in the upcoming session. The measure would have Illinois take over capacity purchases from the Midcontinent ISO in lower Illinois, boosting payments to coal plants in the state. 

The capacity purchase proposal and nuclear supports are part of a broader campaign from leaders of major investor-owned utilities to revise the structure of organized power markets to deliver higher payments to baseload nuclear and coal plants.

Exelon says its Quad Cities and Clinton nuclear plants are at risk of closure without support. The Clinton plant cleared a preliminary MISO reliability auction, but the resulting price was not enough to cover operating costs and returns to shareholders, according to the utility. Exelon says it wil shut Clinton and Quad Cities in June of 2017 and 2018, respectively, if support legislation fails. 

The nuclear supports would incorporate a social cost of carbon dioxide emissions as the baseline for rewarding the nukes for their lack of emissions with adjustments based on market conditions.

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Filed Under: Generation Regulation & Policy
Top image credit: Flickr; Jim Richmond