Exelon is following via with a menace to shut two of its Illinois nuclear energy vegetation by subsequent yr until it receives state assist to spice up their monetary viability, a transfer that might undermine the state’s carbon-free electrical energy objectives.
However with a bribery scandal involving Exelon subsidiary Commonwealth Edison eroding its political clout within the state, and state Gov. JB Pritzker saying he received’t assist the utility’s most well-liked plan to spice up its nuclear plant revenues, it’s unclear whether or not Exelon will get what it says it must preserve the vegetation open.
Exelon subsidiary Exelon Era’s announcement that it plans to shut its Byron and Dresden energy vegetation in 2021, many years forward of schedule, cited long-standing financial pressures on a fleet that provides the overwhelming majority of the state’s carbon-free technology.
The utility additionally warned that it might search early retirement of its Braidwood and LaSalle energy vegetation, which mixed with closures on the Byron and Dresden vegetation would improve electrical energy sector carbon emissions by about 70 p.c, and undermine Illinois’ progress towards its aim of 85 p.c carbon-free vitality by 2025.
The announcement met with robust unfavourable reactions from Illinois state leaders. A Pritzker spokesperson referred to as it a “menace,” and famous that two different Exelon nuclear vegetation in Illinois, the Clinton and Quad Cities vegetation, obtain about $235 million per yr in zero-emissions credit (ZECs) created beneath the state’s 2016 Future Vitality Jobs Act.
Exelon has been capable of safe zero-emissions credit for nuclear vegetation in New York and New Jersey, permitting main contributors of carbon-free electrical energy to maintain working. Each states have aggressive zero-carbon vitality insurance policies.
Hurdles for Exelon on the state and federal stage
Final week, Pritzker’s workplace launched a clear vitality plan laying out the Governor’s most well-liked path ahead for stalled vitality laws, which excludes most of Exelon’s most well-liked insurance policies to assist its nuclear fleet.
Pritzker’s plan would apply strict monetary reporting and impartial auditing necessities for Exelon’s nuclear fleet earlier than it might search to increase zero-emissions credit to its different energy vegetation.
In lieu of these helps, the utility proposes a carbon pricing scheme that might present incentives for the vegetation, in addition to different carbon-free vitality assets. Exelon CEO Chris Crane warned earlier this month that the utility, which owns the nation’s largest nuclear producing fleet and operates utilities in Illinois, Maryland, Delaware and Washington, D.C., confronted diminishing prospects for preserving its struggling Illinois nuclear fleet operating within the face of continued monetary losses.
The plan from the governor additionally strikes away from Exelon’s most well-liked technique of making a Mounted Useful resource Requirement (FRR) construction to permit its nuclear energy vegetation to exit the wholesale capability markets of mid-Atlantic grid operator PJM. Exelon’s nuclear fleet is predicted to be unable to compete in PJM’s capability market beneath new guidelines it’s been ordered to create by the Federal Vitality Regulatory Fee (FERC). These guidelines will pressure state-subsidized assets to make use of administratively-fixed minimal costs when bidding to compete towards different assets out there.
Exelon labored with legislators and environmental teams to incorporate a model of the FRR within the Clear Vitality Jobs Act (CEJA) laws launched final yr. However the invoice stalled in 2019 after the federal bribery investigation involving ComEd was introduced. CEJA and a rival clear vitality invoice, dubbed Path to 100, had been additionally unable to advance throughout this yr’s COVID-19 pandemic-constrained legislative session.
ComEd’s determination in July to pay a $200 million effective and undergo a deferred prosecution settlement in connection to the federal investigation alleging the utility steered jobs, contracts and funds to Home Speaker Michael Madigan in change for favorable therapy in state laws has made for a poisonous setting within the state capitol.
Pritzker suspended the Vitality Working Group concerned in crafting state vitality laws after ComEd’s deferred prosecution settlement final month. The vitality plan launched this week makes clear that Pritzker views the FRR plan as “a large windfall for Exelon’s present nuclear fleet in Illinois” and unideal relative to a carbon worth, wrote Rob Rains, an analyst with Washington Evaluation, in a analysis notice launched this week.
Exelon stated its determination to shutter the vegetation was unrelated to Pritzker’s latest bulletins.
“We agree with Governor Pritzker that coverage reform is urgently wanted to handle the local weather disaster and advance Illinois’ clear vitality financial system, and we assist the aims of the Governor’s latest vitality ideas,” Crane stated in Thursday’s announcement. “That’s separate from right now’s announcement to retire these two zero-carbon nuclear vegetation, which was not a choice made frivolously and is one which has been within the works for a while.”
Even so, Crane acknowledged that Exelon “will proceed our dialogue with policymakers on methods to forestall these closures. To that finish, we’ve got opened our books to policymakers and can proceed to take action for any lawmaker who needs to evaluate the vegetation’ profitability.”