Exelon CEO endorses nuke bailout, punts on leaked DOE memo
The CEO of the largest U.S. nuclear operator on Wednesday urged the federal government to take urgent action to halt the retirement of nuclear power plants, but stopped short of endorsing the framework for emergency action outlined in a Department of Energy memo leaked last week.
Exelon CEO Chris Crane said there is “not enough information to pass judgment” on the DOE memo, which advocated the agency use its emergency authority and a Cold War-era law to keep plants online, but he said federal authorities need to act “before we lose these units and they can never come back.”
Crane’s comments at the annual convention of the Edison Electric Institute came a day after he told Utility Dive that conditions in PJM, the largest U.S. electricity market, do not constitute a grid emergency that warrants immediate action. Crane said ISO-New England may be “starting to see” emergency conditions in winter, but did not alter his statement on PJM.
A day after he questioned the justification for emergency intervention in wholesale power markets, Crane said Wednesday he aimed to “clarify” his company’s stance on saving coal and nuclear plants.
“I don’t know whether you call it emergency or non-emergency. We want action,” Crane told reporters after a panel appearance at the EEI conference. “This administration supports action. We support this administration.”
Last week, President Trump directed Secretary of Energy Rick Perry to recommend steps to save coal and nuclear plants from closing. The order came a day after the release of a DOE memo outlining how the agency could bail out the generators using its emergency authority under the Federal Power Act and the Defense Production Act, a 1950s law that allows the DOE to nationalize parts of the power sector in wartime.
Crane declined to comment on the specifics of the memo, which appears to be an addendum to a draft DOE order that was not released, saying there is “not enough information for us to pass judgment on it.”
“That gives us the framework but it doesn’t give us enough to know to say that is the right design,” he told the EEI audience.
Exelon owns 16 nuclear plants across the Eastern U.S., including four slated for closure in the coming years. Crane on Tuesday said he wants to work through established processes at regional grid operators and the Federal Energy Regulatory Commission to save his plants, particularly FERC’s open proceeding on grid resilience, set up in January when regulators rejected an earlier subsidy plan from DOE.
Crane on Wednesday urged FERC to complete that initiative quickly, before nuclear plants retire.
“We need to get the insight on what the design basis needs to be and expedite the resilience review before we lose these units and they can never come back,” he said. “Today, the way the markets are designed in New England and PJM, they do not take fuel diversity and resiliency into capacity market design to the level it needs to be to maintain the resiliency of the system.”
DOE officials argue subsidies are justified because the retirement of coal and nuclear constitutes a grid emergency that threatens national security. Crane on Tuesday said PJM’s high reserve margin — 22% in its latest auction — makes it “hard to declare an emergency” in that market, but said ISO-New England faces bigger challenges.
Crane did not address his PJM comments on Wednesday, but said emergency conditions could emerge soon in ISO-NE.