The Illinois legislature's passage of the Future Energy Jobs bill in December 2016 prevented Exelon Corp.'s uneconomic Clinton Power Station and Quad Cities nuclear plants from being shut down.
Signed into law after heavy debate, the bill will now subsidize the operation of the two plants by about $235 million annually for the next 10 years. The plan was based on the U.S. EPA's "social cost of carbon" concept, or how much emissions would be avoided by keeping the plants operational. Exelon had said it was going to shut the Clinton plant as of June 1 this year and Quad Cities as of June 1, 2018, but the legislation assists the plants for 10 years by allowing them to earn "zero emission credits."
Looking at the most recently reported annual generation figures available, the two plants together generated more than 24 million MWh in 2015. Dividing that value into the planned subsidy yields a $9.70/MWh subsidy figure.
The PJM Interconnection's Northern Illinois hub, which is the closest power hub to the Quad Cities plant, had an average power price of $25.94/MWh over the course of 2016. The average power price over the same period for the Illinois hub in MISO, which is the closest power hub to the Clinton plant, was $26.40/MWh.
Quad Cities had a total O&M cost of $26.25/MWh in 2016, according to S&P Global Market Intelligence's Generation Supply Curve model, while Clinton had a total O&M cost of $25.13/MWh.
The law takes effect June 1.
About the data
The $235 million annual subsidy figure is not stated explicitly in the legislation but has been cited by the Chicago Sun-Times newspaper and by analysts at UBS Securities. In this dispatch, the combined net generation of those plants in 2015 (the most recently available annual generation value) is divided into that $235 million figure, yielding a per megawatt-hour value for the subsidy of $9.70. This is the value added to the power price at the respective hub associated with each plant.