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Exelon (EXC) Takes Formal Steps to Close 2 Nuclear Units
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Exelon Corporation (EXC - Free Report) finally took formal initiatives to shut down its two loss making nuclear fuel based electricity generation units. The company has informed the Nuclear Regulatory Commission (NRC) its intention to close its Clinton and Quad Cities nuclear stations in 2017 and 2018, respectively.
Nuclear Units to Retire
Clinton and Quad Cities nuclear stations have generation capacity of 1,069 megawatt (MW) and 1,871 MW, respectively. Nuclear power comprised 19,500 MW or nearly 59.6% of Exelon’s total production in the first quarter of 2016. These two plants together contributed nearly 9% of the first-quarter production.
Per Exelon’s notification, the Clinton Power Station in Clinton, will close on Jun 1, 2017, and the Quad Cities Generating Station in Cordova, will close on Jun 1, 2018. The retirement of these nuclear plants comes much earlier than their effective life.
Why the Closure
Running a nuclear power plant safely and adhering to stringent environment regulations increase the cost of operations. So, if higher costs are not matched by power unit selling prices, it will inevitably lead to losses.
From 2009 through 2015, Quad Cities and Clinton have incurred more than $800 million and Exelon has been working on the Illinois energy legislation for the past two years to find a solution. However, there has hardly been any progress on this front leading the company to take this final step.
Nuclear power plants invariably involve a high degree of risk, but proper maintenance and safety checks make Exelon’s nuclear generation units among the finest and safest in the nation.
The U.S. Environmental Protection Agency’ s (EPA) finalized Clean Power Plan calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels. We believe retiring old coal-fired units while adding more natural gas and renewable generation units will not be sufficient enough to bring a solution.
The U.S. utility sector needs to pay more attention to the nuclear generating power units, which contribute a substantial volume of clean energy. Per a study from Exelon, nuclear energy facilities currently produce 64% of America's clean, carbon-free electricity.
Zacks Rank
Exelon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Black Hills Corporation (BKH - Free Report) , CenterPoint Energy, Inc. (CNP - Free Report) and DTE Energy Company (DTE - Free Report) , all carrying a Zacks Rank #2 (Buy).
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Exelon (EXC) Takes Formal Steps to Close 2 Nuclear Units
Exelon Corporation (EXC - Free Report) finally took formal initiatives to shut down its two loss making nuclear fuel based electricity generation units. The company has informed the Nuclear Regulatory Commission (NRC) its intention to close its Clinton and Quad Cities nuclear stations in 2017 and 2018, respectively.
Nuclear Units to Retire
Clinton and Quad Cities nuclear stations have generation capacity of 1,069 megawatt (MW) and 1,871 MW, respectively. Nuclear power comprised 19,500 MW or nearly 59.6% of Exelon’s total production in the first quarter of 2016. These two plants together contributed nearly 9% of the first-quarter production.
Per Exelon’s notification, the Clinton Power Station in Clinton, will close on Jun 1, 2017, and the Quad Cities Generating Station in Cordova, will close on Jun 1, 2018. The retirement of these nuclear plants comes much earlier than their effective life.
Why the Closure
Running a nuclear power plant safely and adhering to stringent environment regulations increase the cost of operations. So, if higher costs are not matched by power unit selling prices, it will inevitably lead to losses.
From 2009 through 2015, Quad Cities and Clinton have incurred more than $800 million and Exelon has been working on the Illinois energy legislation for the past two years to find a solution. However, there has hardly been any progress on this front leading the company to take this final step.
EXELON CORP Price
EXELON CORP Price | EXELON CORP Quote
Strong Case for Nuclear Power
Nuclear power plants invariably involve a high degree of risk, but proper maintenance and safety checks make Exelon’s nuclear generation units among the finest and safest in the nation.
The U.S. Environmental Protection Agency’ s (EPA) finalized Clean Power Plan calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels. We believe retiring old coal-fired units while adding more natural gas and renewable generation units will not be sufficient enough to bring a solution.
The U.S. utility sector needs to pay more attention to the nuclear generating power units, which contribute a substantial volume of clean energy. Per a study from Exelon, nuclear energy facilities currently produce 64% of America's clean, carbon-free electricity.
Zacks Rank
Exelon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Black Hills Corporation (BKH - Free Report) , CenterPoint Energy, Inc. (CNP - Free Report) and DTE Energy Company (DTE - Free Report) , all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>