Exelon Corporation said Wednesday that its Quad Cities and Three Mile Island nuclear plants in Cordova, Ill., and Middletown, Pa., did not clear in the PJM capacity auction for the 2019-2020 planning year. These plants will not receive capacity revenue for that period, Exelon said.
The company said further that a portion of the Byron nuclear plant's capacity also did not clear in the auction. However, that plant is already committed to operate through May 2020.
All other company nuclear plants in the PJM auction cleared, Exelon said, with the exception of the Oyster Creek Boiling Water Reactor in Forked River, N.J. That plant did not participate in the auction. It is scheduled for closure in 2019.
The auction results will take effect in June 2019. The auctions define wholesale capacity pricing for the market three years into the future. The idea is to ensure that the regional transmission organization covering parts of 13 states and the District of Columbia, have demand-based resources for uninterrupted power.
Exelon said Tuesday that more than 1,500 Illinoisans, including community leaders, elected officials, nuclear plant employees and others, took part in a rally in Springfield, Ill., in support of the proposed Next Generation Energy Plan that would “jump start” solar power in Illinois and help preserve two “at risk” nuclear power plants, the Clinton Power Station and the Quad Cities Generation Station, both in Illinois. Clinton, however, participates in the MISO market, not the PJM auction, and it has cleared the MISO's current auction, which is also forward-pricing, but only for one year.
Quad Cities and Clinton, meanwhile, have lost a combined $800 million over the past seven years, despite the plants ranking among Exelon's highest-performing nuclear power facilities.
Even clearing the auction will not avoid continued losses for the Clinton plant, Exelon said.
The Next Generation Energy Plan is a boost to solar power, offering rebates and $140 million per year in new funding. But the legislation would also preserve more than $1.2 billion in economic activity and 4,200 jobs directly and indirectly associated with the Quad Cities and Clinton plants. Without the bill's passage, consumers would also face immediate impact on their electricity bills, as two plant closures would jump wholesale prices by $439 million to $645 million in the state, a government study found.
The ground-breaking component of the Next Generation Energy Plan – aside from a goal of increasing solar power by more than 100 fold from less than 60 megawatts to over 1,650 megawatts, is the Zero Emissions Standard that would recognize the contribution of low-impact generation related to carbon emissions. Essentially, this plan would ensure compensation for power plants only if they can demonstrate through state review that their revenues are insufficient to cover their costs and operating risks.
The Next Generation plan remains a stop-gap provision. It would compensate utilities with Zero Emissions contracts until 2023. However, the contracts would end two years after Illinois ratified and submitted to the federal government its compliance measures for the Clean Energy Plan (which is currently held up by judicial review) if that happened sooner than 2023.
The wholesale energy market remains the standard for the industry, but support is needed to sustain at-risk nuclear power plants, said Chris Crane, president and chief executive officer at Exelon. “Without passage of comprehensive energy legislation that recognizes nuclear power for its economic, reliability and environmental benefits to Illinois, we will be forced to close Quad Cities and Clinton,” he said in a recent press release.
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