Electricity Markets

Exelon says it plans to retire Three Mile Island nuclear plant in 2019

Exelon Corp. on May 30 said it will retire its 837-megawatt Three Mile Island (TMI) nuclear power plant in Pennsylvania on or about Sept. 30, 2019, "absent needed policy reforms."

Exelon's announcement comes just days after the Three Mile Island plant and a separate Exelon nuclear plant failed to clear the PJM Interconnection's latest capacity auction.

In a May 30 news release, Exelon said that it was taking the first steps to shut down the nuclear plant, including:

  • Informing key stakeholders, which will include sending PJM a deactivation notice and making permanent shutdown notifications to the Nuclear Regulatory Commission within 30 days;
  • Immediately taking one-time charges of $65-110 million for 2017, and accelerating approximately $1.0-1.1 billion in depreciation and amortization through the announced shutdown date;
  • Terminating capital investment projects required for long-term operation of TMI; and
  • Canceling 2019 fuel purchases and outage planning, impacting about 1,500 outage workers.

The utility noted that nuclear power is not included in Pennsylvania's Alternative Energy Portfolio Standard and said that amending the AEPS is "one of many potential solutions" to preserve Pennsylvania's nuclear plants.

"Other options include establishing a zero emissions credit program, similar to the approach being implemented in Illinois and New York," the company said.

In December, Illinois Gov. Bruce Rauner signed S.B. 2814, the Future Energy Jobs Act, which will provide about $235 million a year through a 10-year contract to two nuclear power plants in the state owned by Exelon. The 1,065-MW Clinton and 1,871-MW Quad Cities plants in Illinois faced looming shutdowns.

And in August, the New York Public Service Commission approved a renewable energy plan that requires load serving entities to buy zero-emissions credits over 12 years from the cash-strapped FitzPatrick, Ginna and Nine Mile Point nuclear plants in upstate New York.

Pennsylvania state lawmakers formed nuclear caucus in 2017

A bipartisan group of Pennsylvania state legislators from the House and the Senate recently formed a caucus in the General Assembly to focus on nuclear energy issues.

"Today's announcement confirms what we have suspected for many months - that there are serious and consequential underlying issues in Pennsylvania's energy sector that must be addressed," said Pennsylvania state Senators Ryan Aument and John Yudichak and state Representatives Becky Corbin and Rob Matzie, who co-chair the Nuclear Energy Caucus, on May 30.

"The premature closure of the Three Mile Island Nuclear Generating Station will mean a significant loss of family-sustaining jobs, high capacity baseload clean energy, and the many direct and indirect economic benefits that surround the production of electricity from a nuclear power plant," the lawmakers said in their statement.

Nuclear plants failed to clear PJM auction

Exelon on May 24 said that the TMI and Quad Cities nuclear plants did not clear in the latest PJM capacity auction.

Exelon, which noted that TMI has not cleared in the past three PJM base residual auctions, said that TMI "remains economically challenged as a result of continued low wholesale power prices and the lack of federal or Pennsylvania energy policies that value zero-emissions nuclear energy." The utility also said that TMI has not been profitable in five years.

Exelon "remains fully committed" to keeping the Quad Cities plant open, said Joe Dominguez, Exelon's executive vice president of government and regulatory affairs and public policy, on May 24, as long as the Future Energy Jobs Act's zero emissions credit program "is implemented as expected and provided that Quad Cities is selected to participate."

Dominguez said that Quad Cities had not been selected to receive ZECs under the Future Energy Jobs Act's program to date.

Exelon noted that its other nuclear plants in PJM cleared in the auction for the 2020-2021 planning year. The company's Oyster Creek plant in New Jersey did not participate in the auction, as the plant is scheduled to retire in 2019.

Capacity auctions are held annually by PJM to ensure enough power generation resources are available to meet demand in its region covering all or part of 13 states and the District of Columbia. This is the fifth delivery year for which capacity auctions have been held under "capacity performance" reforms ordered by the Federal Energy Regulatory Commission. The auction results take effect June 1, 2020.

Other utilities move to shutter nuclear plants

Several other utilities have announced plans to close nuclear power plants.

Under an agreement reached between New York state and Entergy Corporation earlier this year, Entergy has agreed to shutter its Indian Point Energy Center nuclear power plant in Buchanan, New York. Under the pact, Indian Point Unit 2 will shut down by April 30, 2020, while Unit 3 will close by April 30, 2021.

In December 2016, Entergy said that it plans to permanently shut down its Palisades nuclear power plant in Michigan in the fall of 2018. The utility said that the electricity market has changed substantially over the last decade, and that "more economic alternatives are now available to provide power to the region."

In California, Pacific Gas & Electric Co. plans to retire the Diablo Canyon nuclear power plant.

In May 2016, senior management at the Omaha Public Power District recommended closing the utility's Fort Calhoun Station. In June 2016, the public power utility's board of directors voted to decommission the plant, and the 479-MW Fort Calhoun ceased operations in October.