Utility giant Exelon announced Thursday that it will close two of its nuclear plants in Illinois over the next two years and lay off hundreds of workers, blaming political and market issues.
The company, which became the largest utility in the nation when it purchased the Washington area’s Pepco earlier this year, said it no longer can cope with the higher cost of keeping the plants operating, despite years of struggle to keep them afloat.
“We have worked for several years to find a sustainable path forward in consultation with federal regulators, market operators, state policymakers, plant community leaders, labor and business leaders, as well as environmental groups and other stakeholders,” said Exelon President Chris Crane.
“Unfortunately, legislation was not passed, and now we are forced to retire the plants,” he said, placing blame squarely on the Illinois legislature for not passing a measure to help maintain the plants and make them more economic.
The closure of the Clinton and Quad Cities plants will remove 3,000 megawatts of clean energy from the state’s porfolio, making it more difficult for the state to meet the Obama administration’s climate rules for existing power plants. The rules, called the Clean Power Plan, call on states to reduce their greenhouse gas emissions a third by 2030, and nuclear plants produce zero emissions.
The rules have been stayed by the Supreme Court until the merits of a legal case against the regulations is decided in federal appeals court later this year.
The administration says the country needs nuclear power, and many studies show that it will be desperately needed to meet the goals of last year’s climate deal in Paris.
The Clean Power Plan places greater emphasis on using wind and solar to reduce state emissions than on preserving the nation’s existing fleet of power plants. The plan is expected to significantly cut out coal use, while many nuclear plants throughout the country struggle to remain online.
Low natural gas prices have made it not economical for other sources of electricity to compete, especially in the large reorganized markets overseen by the government in the East. That has led natural gas to become to dominant fuel for electricity in the United States, pushing out coal’s long-time reign and making it tougher on nuclear power.
Exelon has long complained that the federal tax subsidies for wind have made it tougher for nuclear plants by creating a phenomenon called negative pricing that has made their plants unprofitable and less competitive.
“The premature closures of Clinton and Quad Cities continue an alarming trend — our nation is losing top-performing nuclear power plants due to flawed electricity market conditions,” said Marvin Fertel, president and CEO of the Nuclear Energy Institute, the nuclear industry’s lead trade association.
“In the process, we are moving farther away from achieving our nation’s ambitious clean air commitments,” Fertel said.
He also urged the Illinois legislature to take action immediately before its too late to avoid this “tragedy.”
