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Exelon Corp. subsidiary Exelon Generation Co. LLC will shut its Oyster Creek nuclear plant in New Jersey at the end of its operating cycle this October instead of in 2019.
Rising operating costs for the nation's oldest nuke and lower wholesale power prices have made it more difficult for the 637-MW plant to remain profitable. Exelon said in 2010 it would retire the unit in December 2019, 10 years before its operating license expires.
The earlier shutdown is in part because Exelon can avoid the costs of a refueling outage in the fall of 2018 and the need to purchase fuel and materials starting in late February, the company said in a Feb. 2 Form 8-K.
"The decision will also help Exelon better manage resources as fuel and maintenance costs continue to rise amid historically low power prices," Exelon officials said in a news release.
Because of its decision, Exelon will record certain one-time charges in the first quarter of 2018. The company expects charges ranging from $25 million to $35 million, on a pretax basis, that include construction work-in-progress and an inventory reserve adjustment related to materials and supplies. Within that range is $5 million to $10 million for employee-related costs, Exelon confirmed.
There will also be financial impacts in 2018 from shortening the expected useful life of the plant, Exelon said in its 8-K. The utility estimates added expenses to its income statement in the range of $110 million to $140 million for accelerated depreciation. Another $40 million is for accelerated amortization of nuclear fuel. Finally, the company estimates up to $5 million for higher assets retirement obligation expenses.
Exelon anticipates further potential costs if Oyster Creek no longer meets the minimum funding requirements under the U.S. Nuclear Regulatory Commission. The NRC oversees each nuclear plant owner's nuclear decommissioning trust, which houses ratepayer money set aside for decommissioning. The commission also oversees and sets criteria for plant owners to access those funds, NRC spokesman Neil Sheehan said Feb. 2.
Depending on the decommissioning approach that Oyster Creek selects, the NRC requires the plant to maintain a minimum level of funding to cover the costs of that approach, Sheehan said. If the plant's owner does not have enough funds, they can turn to other financial mechanisms such as adding to their nuclear decommissioning trust fund or having a parental guarantee, Sheehan added.
"A shortfall could require Exelon to post parental guarantees for Generation's obligations," the company said in its 8-K.
The amount of guarantee ultimately depends on the decommissioning approach Oyster Creek details it its "post-shutdown decommissioning activities report," which the NRC requires to be submitted within two years of a plant shutdown, according to Exelon's Form 8-K.
The roughly 500-member staff at Oyster Creek will continue to operate the plant through October, after which some employees will stay on for decommissioning, Exelon said in its news release. The company is offering employees the option to transition to other open positions within its family of companies.

Exelon's Oyster Creek nuclear plant located 60 miles east of Philadelphia in Ocean County, N.J.