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Exelon Announced Decommission for its Two Nuclear Power Plants in Illinois by 10 and 20 Years In Advance

published: 2020-09-11 18:30

Exelon, the electricity company that possesses the most nuclear power plants in the US, has been threatening to shut down its nuclear power plants in recent years if the company does not receive subsidies from the Federal Government of the United States. Commonwealth Edison, a subsidiary of Exelon in Illinois, has been involved with a long-term bribery scandal with Michael Joseph Madigan, speaker of the Illinois House of Representatives, which basically terminated the source of subsidies. Hence, Exelon announced at the end of August 2020 that “it is necessary to shut down the power plants in Illinois that are of no economic benefits”, and will be shutting down the two nuclear power plants of Byron and Dresden in 2021.

Dresden was initially scheduled for decommission after 10 years, and will be shutting early in September 2021, whereas Byron previously had another 20 years of service life, and is condemned to decommission in September 2021. Exelon commented that these two nuclear power plants produce hundreds of millions of deficit each year, and are hired with a total of 1,500 full-time workers and 2,000 support labor, who will be fired in order to avoid company closure and support the working opportunities of other locations, as claimed by Exelon. In addition, another two power plants in Illinois, LaSelle and Braidwood, with approximately 1,500 workers, are also facing early decommission.

The cost of decommission is significantly sizeable. Take Byron as an example, the back-end disposal fund of the power plant has become insufficient due to long-term deficit and the decommission that is 20 years early, and Exelon may have to pay a decommission disposal fee of $US500 million. The non-existence of economic benefits, and the intolerable operation losses, have forced the company to make such difficult decision.

Exelon had previously succeeded from threatening in decommission in Illinois, and purchased the refurbished Clinton Power Station from Illinois Power in 1999, which was scheduled for decommission in 2026, as well as the Quad Cities Nuclear Generating Station that received the approval for extended service of 20 years by the US Atomic Energy Agency in 2004. However, Exelon claimed in 2015 that its two nuclear power plants had been producing losses of US$800 million within 6 years under no economic benefits whatsoever, and was planning for a decommission. Exelon announced the ultimatum in May 2016 and stated that the company will be shutting down the Clinton Power Station in June 2017 and the Quad Cities Nuclear Generating Station in June 2018, if the Government of Illinois rejected the subsidy bill.

The Illinois General Assembly had passed the Illinois Future Energy Jobs Bill in June 2016, which although is named as future energy, the bill subsidizes on expensive and inefficient outdated energy instead. According to the electricity prices, Exelon receives a subsidy of US$0.10/kWh, equaling to approximately TWD$3, which is equivalent to a total subsidy of US$235 million each year, in order to exchange for the operation of Clinton Power Station and Quad Cities Nuclear Generating Station for a minimum of 10 years. Exelon’s successful blackmailing had resulted in the cancellation of the decommission for both Clinton Power Station and Quad Cities Nuclear Generating Station.

A similar incident had occurred in New York. Entergy, the electricity company that operated the James A. FitzPatrick Nuclear Power Plant, announced in November 2015 the early decommission due to substantial deficits, for which Andrew Mark Cuomo, governor of New York, instructed the public affairs committee in 2016 to discuss about the method of subsidy, and resulting in a whopping US$7 billion subsidy within 15 years. Under this sublime subsidized fund, Exelon had purchased the James A. FitzPatrick Nuclear Power Plant for US$110 million to continue its operation.

However, Illinois has been attempting to make money from Exelon by not only offering high subsidies, but also creates expensive electricity prices, where the electricity price of $US0.647/kWh for Commonwealth Edison had finally triggered investigation, where the prolonged bribery scandal came to light.

The political sector of Illinois believes that the decommission of Exelon this time is just another trick of public blackmailing, though the company may not get what it wants after the bribery scandal of Commonwealth Edison, and the chaotic political sector of the US amidst the pandemic and presidential election pretty much hinders any further possibilities in subsidies, which means that these two nuclear power plants are bound to shut down for real this time. However, the James A. FitzPatrick Nuclear Power Plant in the State of New York that has received substantial subsidies will continue to operate without sustaining any consequences.

 (Cover photo source: Exelon)

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