Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Exelon (EXC) Takes Formal Steps To Close 2 Nuclear Units

Published 06/22/2016, 10:46 PM
Updated 07/09/2023, 06:31 AM

Exelon Corporation (NYSE:EXC) 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.

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 (NYSE:BKH) , CenterPoint Energy, Inc. (NYSE:CNP) and DTE Energy Company (NYSE:DTE) , 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 >>



CENTERPOINT EGY (CNP): Free Stock Analysis Report

EXELON CORP (EXC): Free Stock Analysis Report

DTE ENERGY CO (DTE): Free Stock Analysis Report

BLACK HILLS COR (BKH): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.