Electricity Markets

Exelon Generation to retire two nuclear plants in Illinois

Exelon Generation on Aug. 27 said that it intends to retire its Byron Generating Station and Dresden Generating Station in fall 2021. Both nuclear plants are located in Illinois.

The 2,347-megawatt Byron plant, located just outside Byron, Ill., will close in September 2021, while the 1,845-MW Dresden plant, located in Morris, Ill., will close in November 2021. Dresden is licensed to operate for another decade and Byron for another 20 years.

On Aug. 21, Illinois Gov. J.B. Pritzker released “Eight Principles for a Clean and Renewable Illinois Economy.”

One of the principles calls for implementation of a “market-based solution that supports clean power and clean air.”

Among other things, that principle rejected a Fixed Resource Requirement approach in proposed legislation that would establish direct payments for the nuclear plants rather than having them participate in the capacity market, and instead recommends implementation of a carbon price.

“We agree with Governor 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,” said Christopher Crane, president and CEO of investor-owned Exelon.

“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,” Crane said.

Exelon Generation said that Dresden and Byron face revenue shortfalls “in the hundreds of millions of dollars because of declining energy prices and market rules that allow fossil fuel plants to underbid clean resources in the PJM capacity auction.”

The plants’ economic challenges “are further exacerbated by a recent FERC ruling that undermines longstanding state clean energy programs and gives an additional competitive advantage to polluting energy sources in the auction,” Exelon Generation said.

“As a result of these market rules, Exelon Generation’s LaSalle and Braidwood nuclear stations in Illinois, each of which house two nuclear units and together employ more than 1,500 skilled workers, are also at high risk for premature closure,” Exelon Generation said.

The company noted that it needs to give PJM enough time to conduct an analysis confirming that retiring Byron and Dresden will not cause a shortage of generating capacity in northern Illinois during times of peak demand.

“In the days and weeks ahead, Exelon Generation will file a deactivation notice with PJM and inform key stakeholders and regulatory agencies of the retirements.”

In addition, the company will make official shutdown notifications to the Nuclear Regulatory Commission within 30 days, terminate capital investment projects required for long term operation of Dresden and Byron and scale back the refueling outages scheduled for this fall at Dresden and Byron.

Scaling back the refueling outages will result in spending reductions of $50 million and the elimination of up to 1,400 of the more than 2,000 mostly union jobs typically associated with the two refueling outages, Exelon Generation said.