Feb 7 Low natural gas prices and slow economic
growth forced U.S. power company Exelon Corp to cancel
plans to spend $2.3 billion on capacity expansion at its nuclear
power plants and other projects, Chief Executive Chris Crane
said on 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
"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 eight years at about half the cost of building a
An Exelon spokeswoman said the company's share of uprate
work completed so far is 310 MW.
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
that it will retire rather than repair a damaged Florida nuclear
unit has been viewed as a sign that continued low power and gas
prices may be a threat to some existing nuclear plants.
For the first time, Exelon detailed another area of expenses
that may pressure its nuclear fleet - spending on measures to
comply with revised safety standards following the 2011
Fukushima nuclear disaster.
The company may spend $350 million over the next five years
on Fukushima upgrades, said Jack Thayer, Exelon's chief
Thayer said that estimate does not include the addition of
filtered vent systems that have been recommended by the staff of
the Nuclear Regulatory Commission (NRC) to filter radioactive
contaminants from reactors during severe accidents.
Filtered vents would add $15 million to $20 million per unit
at Exelon's 11 affected reactors, Thayer said, adding from $165
million to $220 million to the Fukushima-related tab.
The nuclear industry proposed a less-costly plan to filter
radioactive contaminants and Thayer said he expects the NRC to
rule on the issue before the end of March.
Fukushima-related changes would add less then $50 million in
operation and maintenance costs for Exelon's nuclear fleet over
the next five years, Thayer said.
Separately, U.S. Representative Edward Markey on Thursday
urged nuclear regulators to adopt the staff option calling for
the addition of filtered vents to help avert the type of
hydrogen explosions that occurred at Fukushima.
"I strongly urge the commission to follow the NRC staff
recommendation and require that engineered filters be installed
on (boiling water reactor) containment vents and that these
vents be operable under severe accident conditions," Markey said
in a letter to NRC chairman Allison Macfarlane.