The Dresden plant in Grundy County and the Byron station south of Rockford will shut in fall 2021. Exelon has warned that those plants would close without legislation to provide more revenue to them.
Historically low wholesale power prices, combined with a glut of power supply, have put financial pressure on the nukes, which by their nature must operate at all hours whether they’re needed or not.
“We recognize this comes as many of our communities are still recovering from the economic and public health impacts of the pandemic, and we will continue our dialogue with policymakers on ways to prevent these closures,” Exelon CEO Chris Crane said in a release. “To that end, we have opened our books to policymakers and will continue to do so for any lawmaker who wishes to judge the plants’ profitability.”
The two plants employ more than 1,500 and pay more than $63 million in local taxes, the company said.
And, in an assertion implicitly aimed at Gov. J.B. Pritzker, the company said, “The two plants supply 30 percent of Illinois’ carbon-free energy and are essential to meeting the state’s goal to achieve 100 percent clean energy.”
Pritzker on Aug. 21 attempted to restart discussions around comprehensive energy legislation that had been derailed with the July admissions by Exelon-owned Commonwealth Edison of paying off friends and allies of House Speaker Michael Madigan over the years in order to win favorable legislation.
That included the Future Energy Jobs Act of 2016, which imposed new charges on ratepayers statewide to subsidize two other nukes that Exelon had announced it was closing. The subsidies provide $235 million to Exelon each year.
The set of principles Pritzker provided for a bill he’d favor included dismissal of Exelon’s proposal to have the state take over from a federally chartered regional grid operator the function of setting the prices power plants receive for their promise each year to deliver during high-demand periods.
“We agree with Gov. Pritzker that policy reform is urgently needed to address the climate crisis and advance Illinois’ clean energy economy, and we support the objectives of the governor’s recent energy principles,” Crane said in the release. “That’s separate from today’s announcement to retire these two zero-carbon nuclear plants, which was not a decision made lightly and is one that has been in the works for some time.”
Pritzker in his principles said he was open to helping keep nukes open but that it would happen only after Exelon provided audited financials for each plant to unspecified state officials.
During the 2016 negotiations, Exelon distributed unaudited and relatively vague materials on each nuke’s financial situation. That raised questions about whether the company got more cash than it needed to keep the plants open.
In its release, Exelon said its Braidwood nuke in Will County, first identified as a closure possibility about two years ago, continues to be at risk. That plant is pledged to run until at least 2022 under agreements with PJM Interconnection, the regional grid overseer.
Exelon also said its only other unsubsidized nuke—the LaSalle plant in Marseilles—is at « high risk » of premature closure.
PJM will have something to say about Exelon’s closure plans. The regional authority’s primary responsibility is to ensure there’s enough generation capacity to keep the lights on. If it decides that one of the plants is needed for reliability reasons, it can demand the facility remain open under a special contract that ensures it makes a profit.
But those arrangements last only until replacement capacity can be built, and plants fueled by natural gas continue to get financing even when there’s no immediate need for them. Just three days ago, a 1,250-megawatt gas plant to be located very near the Dresden nuke announced it had obtained $875 million in debt financing and is expected to become operational in 2023.
Unlike nukes, gas plants emit carbon, a heat-trapping gas. Environmentalists warn that switching nuclear for gas-fired power will set back the effort to reduce carbon emissions necessary to slow down global warming. Pritzker’s goal is a carbon-free power industry in Illinois by 2050.
Exelon and other nuclear advocates say nukes can serve as a bridge to when renewable resources like wind and solar, combined with better battery and energy-storage technologies, can shoulder most of the reliability load.
This story has been corrected to reflect that Exelon warned its Braidwood plant also remains at risk of early retirement. An earlier version said Exelon made no mention of Braidwood in its release.
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