Margins tight at Exelon’s ZEC-less Illinois Nuclear Plants

How valuable are zero-emissions credits (ZECs) to nuclear power plants in Illinois? Without them, operating costs at five of the state’s six nuclear plants run close to wholesale power prices, according to an S&P Global Market Intelligence cost model. In 2017, Clinton Power Station and Quad Cities Generating Station both began receiving ZECs from a new state law passed in late 2016, was challenged, and was upheld in Federal Court. Prior to receiving the credits, valued at $16.50 per megawatt-hour, the Clinton plant saw operating expenses reach as high as 92.3% of wholesale electricity prices, while Quad Cities expenses topped 89.2%. With the ZECs in place, operating costs as a percentage of wholesale power prices have declined to 55.4% for Clinton and 59.8% for Quad Cities.[1]

Operating costs continue to burden Braidwood Generating Station, Byron Generating Station, and Dresden Generating Station, none of which receive any ZEC revenue, and could lead to an early retirement. In the company’s annual U.S. Securities and Exchange Commission filing on February 8, 2019, Exelon Corporation stated that its Braidwood Generating Station, Byron Generating Station, and Dresden Generating Station are, “showing increased signs of economic distress…in a market that does not currently compensate them for their unique contribution to grid resiliency and their ability to produce large amounts of energy without carbon and air pollution.” The company went on to say that, “the May 2018 PJM capacity auction for the 2021-2022 planning year resulted in the largest volume of nuclear capacity ever not selected in the auction, including all of Dresden, and portions of Byron and Braidwood.” In 2018, Braidwood saw operations and maintenance costs reach 80.7% of wholesale electricity prices, while Byron hit 82.4%, and Dresden 85.1%.[1]

Source: S&P Global Market Intelligence

Endnotes

  1. “Operating costs at 3 ‘at-risk’ Exelon nukes run close to power prices,”
    S&P Global Market Intelligence. (March 5, 2019).

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Note: S&P Global Market Intelligence data and image referenced from March 5, 2019 article, “Operating costs at 3 ‘at-risk’ Exelon nukes run close to power prices.” Market Intelligence is a subscription-based service and a link is not available.