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US infrastructure bill credits not enough to stop nuclear unit closures: Exelon

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US infrastructure bill credits not enough to stop nuclear unit closures: Exelon

Highlights

Infrastructure bill contains credits for merchant nuclear units

Exelon has said it will shut two nuclear stations in September, November

Exelon says risk too high of refueling units without certainly about bill

US bipartisan infrastructure legislation unveiled over the weekend containing a credit program to keep existing nuclear units from shutting is not sufficient alone to keep Exelon from permanently closing its Byron and Dresden plants in Illinois this fall, Exelon said Aug. 2.

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The Senate infrastructure bill provides $6 billion for a four-year credit program for nuclear units in merchant power markets at risk of closure. The legislation is on track to be debated this week, although the timetable for action on the measure in the House is uncertain.

Exelon has said it will shut the two-unit Byron station in September and the two-unit Dresden in November unless Illinois legislators approve subsidies to keep the plants from losing money. The legislature adjourned for the session in June without approving any such measure, although there is support for it among certain lawmakers.

Byron-1 and -2 and Dresden-2 and -3 have a combined capacity of 4,354 MW.

Exelon has filed with the US Nuclear Regulatory Commission reports containing the decommissioning plans for the two plants, the company said in a statement July 28.

Exelon said Aug. 2 the federal legislation was effectively too late to affect its decision.

"While we remain encouraged by growing support in Congress to preserve nuclear energy to help combat climate change, the provisions currently under consideration in the Senate infrastructure bill do not provide the policy and funding certainty we need and could take months or even years to come to fruition, if at all," company spokesman Paul Adams said in an emailed statement.

Reactors at Byron and Dresden must be refueled in the fall, and if that is done, it represents a commitment to operate them for two more years, the period between refueling outages, the company said. During that period "we could face revenue shortfalls in the hundreds of millions of dollars. We can't risk taking those losses with no guarantee of a legislative solution," Exelon added.

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The proposed Illinois clean-energy legislation containing plant subsidies "is the only solution that can pass in time to provide the certainty we need," it said. That legislation would ensure that any future federal benefits would be passed on to ratepayers, Exelon said.

Adams did not address whether the federal legislation could persuade Exelon not to retire two additional Illinois nuclear plants it has said are also not profitable. Exelon has said its Braidwood and La Salle stations could shut "in the next few years" if the economics of operating them does not improve.

Nuclear plant operators in merchant power markets have said low power prices are hurting their ability to make profits and even break even. Nuclear industry groups have called for changing market rules to allow low-carbon energy sources to be compensated for their emissions attributes.

Under the proposed infrastructure bill, the US Department of Energy would have to certify that a merchant plant was recording operating losses in order to be certified to participate in the credit program. Preference in the credits would be given to reactors that use uranium that is produced, converted, enriched and fabricated into fuel in the US, according to the legislation.

A separate provision of the infrastructure bill would fund DOE's advanced reactor demonstration program, which seeks to deploy two new reactor designs by 2028, with $2.48 billion over four years.