- Wind advocates say the pending merger of Exelon with Pepco Holdings, owner of Delmarva Power (Delaware, Maryland), Pepco (Maryland, D.C.) and Atlantic City Electric (New Jersey) utilities, could increase Exelon’s leverage in its opposition to the production tax credit (PTC) crucial to wind developers’ value proposition and the investment tax credit (ITC) vital to offshore wind development.
- Exelon, which is owner of the PECO and BGE distribution utilities, the biggest U.S. nuclear plant operator, and 11th in U.S. wind production, was expelled from the American Wind Energy Association for arguing — in defense of its nuclear investments — against the renewal for the now-expired PTC.
- Exelon labeled the wind PTC as one of the federal subsidies for “inherently unreliable energy sources” that “severely distort energy markets, causing some otherwise profitable clean generators to operate at a loss.”
Exelon has proposed subsidies for nuclear plants, raised no objections to billions in subsidized insurance for nuclear facilities from the Price-Anderson Act or to the fossil fuel subsidies in the tax code, and insists wind no longer needs federal tax credits. This is all because, wind advocates say, the low prices and high reliability of wind and natural gas technologies are driving conventional generation like nuclear out of the market.
The PTC/ITC expired at the end of 2013 but wind advocates believe there is a chance it will be renewed retroactively after the November election. The ITC is vital to offshore wind installations that take years to develop because it creates returns for investors at the end of the first year of a project’s operation whereas the PTC pays off more slowly by compensating owners for annual output over the project's first 10 years.
Exelon owns 1,300 megawatts of wind capacity in 10 states.