Exelon’s Quad Cities plant gets lifeline under PJM performance rules
Illinois’ nuclear standoff is over — or at least deferred.
Exelon Corp., the nation’s largest nuclear operator, yesterday announced that its Quad Cities nuclear plant in western Illinois was chosen in last week’s capacity auction run by the region’s grid operator. That means it will be required to remain ready to run until at least mid-2018.
The surprising disclosure comes a day after PJM Interconnection LLC announced results of its final transitional capacity auction (EnergyWire, Sept. 10). And it complicates Exelon’s push for legislation to create a low-carbon portfolio standard in Illinois that would have provided a revenue lift for the company’s 11 reactors in the state.
Critics of the bill, meanwhile, were quick to conclude that the extra millions of dollars that Exelon will receive in capacity revenue eliminate the need for what they have called a “bailout” of the nuclear fleet.
They also question how the Quad Cities plant cleared the PJM auction for 2017-18 at $151.50 per megawatt-day and failed to clear the 2018-19 auction at $215 per MWd (EnergyWire, Aug. 24).
“Exelon pursued two bailout strategies. One was at PJM. The other was at the Illinois General Assembly,” said Dave Lundy, a spokesman for the BEST Coalition, a business group that was the most vocal critic of the low-carbon standard bill. “They got the first one. It’s time for them to abandon their legislative strategy.”
Exelon, however, said punting a decision on retirement of Quad Cities was based on “rigorous analysis of the present and future economics of the plants, taking into consideration the constructive market trends stemming from the PJM capacity auction reforms.”
The Chicago-based company will continue to work on advancing its legislation in Springfield while deferring any decision on the fate of Quad Cities by a year. It also plans to bid the plant and other “eligible” nuclear plants into the 2019-20 PJM capacity auction.
“While Quad Cities and Byron remain economically challenged, we are encouraged by the results of the recent capacity auctions. The new market reforms help to recognize the unique value of always-on nuclear power, while preserving the reliability of our electric system,” Chris Crane, Exelon’s CEO, said in a statement.