June 2 Exelon Corp, the biggest U.S.
nuclear power plant operator, said on Thursday it will shut
reactors at the Clinton and Quad Cities nuclear stations in
Illinois, given a lack of progress on state energy legislation
that would have allowed the plants to operate economically.
The planned nuclear shutdowns are the latest example of
natural gas' growing dominance of the U.S. power sector since
the shale revolution made the United States the world's biggest
producer of the fuel for the past five years.
Gas is expected to top coal as the nation's biggest source
of power generation in 2016, according to federal energy
Coal has been the primary fuel source for U.S. power plants
for the last century, but its use has declined since peaking in
2007 due to low gas and power prices that make it uneconomic to
upgrade older units to meet stricter environmental rules.
Coal is not the only victim of low gas prices.
Nuclear operators have shut five reactors since 2013 and
have threatened to close several more primarily because U.S.
power prices have collapsed to decade lows due to low gas
prices, making it uneconomic to keep running or make needed
repairs to the nuclear units.
Exelon said Clinton will close on June 1, 2017, and Quad
Cities will close on June 1, 2018. Quad Cities and Clinton have
lost a combined $800 million in the past seven years, despite
being two of Exelon's best-performing plants, the company added.
Exelon was hoping the Illinois Legislature would adopt
legislation, known as the Next Generation Energy Plan, that
would compensate nuclear reactors for the reliability,
environmental and economic benefits they provide like
round-the-clock power with no carbon emissions, and jobs and
taxes for the local communities.
"While the Illinois legislative session has not ended, the
path forward for consideration of the Next Generation Energy
Plan legislation is not clear," Exelon said.
The company said it would immediately take one-time charges
of $150 million to $200 million for 2016 and accelerate about $2
billion in depreciation and amortization through the announced
Exelon said it will continue to work with stakeholders on
passing the legislation but it may come too late to save some
The Clinton and Quad Cities plants support about 4,200
direct and indirect jobs and produce more than $1.2 billion in
economic activity annually, Exelon said. There are nearly 700
workers at Clinton and 800 workers at Quad Cities.
The Clinton plant began service in 1987, while Quad Cities
began service in 1972.
(Reporting by Scott DiSavino; Editing by W Simon and Chris