Exelon cuts nuclear expansion projects amid low natgas prices

Thu Feb 7, 2013 1:21pm EST

Feb 7 (Reuters) - Low natural gas prices and slow economic growth forced U.S. power company Exelon Corp to cancel plans to spend $2.3 billion to expand capacity at its nuclear power plants and other projects, Chief Executive Chris Crane said Thursday.

To support its credit rating and dividend, Exelon officials decided to reduce capital spending after an evaluation of the performance of its 35,000-megawatt generating plants against low commodity prices and lackluster demand growth for electricity.

Crane said on a conference call that Exelon's nuclear, coal and gas-fired power plants remain economical and the company has no plans to shut any units.

Exelon will continue to evaluate the impact of low commodity prices, the economic recovery and competition from what Crane called "subsidized generation" to determine if early shutdowns are needed.

"Nothing that we see today would drive us to do that unless we see further degradation," Crane said.

Exelon operates the nation's largest group of nuclear plants and in 2009 launched a series of nuclear expansions, called "uprates," to add as much as 1,300 megawatts of generating capacity over several years at about half the cost of building a new reactor.

An abundant supply of natural gas which reduced gas prices to the lowest level in more than 10 years has already forced some power companies to abandon plans to build new nuclear units and to shutter older coal-fired plants rather than invest in equipment to meet stricter federal environmental standards.

An announcement earlier this week by Duke Energy to retire, rather than repair, a damaged Florida nuclear unit has been viewed as a sign that lower power and gas prices may be a threat to some existing nuclear plants. {ID:nL1N0B635L]

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