EXELON’S POWER PLAY
Company says decision to close two downstate nuclear plants can be avoided if lawmakers change rules to benefit carbon-free energy sources
Exelon said Thursday it will close its Byron and Dresden nuclear power plants in fall 2021 unless it gets a change in state law, a demand that will be intensely scrutinized because of the bribery scandal that ensnared the company’s ComEd division.
Byron must shut down in September 2021 and Dresden in November 2021 because they can no longer operate at a profit in the face of falling energy prices and competition from fossil fuel plants, Chicago-based Exelon said.
It said the closures will eliminate 1,500 full-time jobs and reduce work for 2,000 supplemental employees hired during refueling.
Exelon said it was making the announcement to provide notice to communities, employees and regulators. But its audience also includes state legislators and the governor, who are being asked to change Illinois law to increase purchases from the nuclear plants.
Critics have warned against bailouts of Exelon’s aging nuclear operations, but the company insists state purchasing laws can be changed without saddling ratepayers with more costs. Keeping the plants going holds down electricity prices by adding market competition, Exelon has said.
In a written statement, Exelon CEO Christopher Crane said the company wants to discuss legislation to avoid the closures but did not get into specifics.
“We recognize this comes as many of our communities are still recovering from the economic and public-health impacts of the pandemic, and we will continue our dialogue with policymakers on ways to prevent these closures,” Crane said.
“To that end, we have opened our books to policymakers and will continue to do so for any lawmaker who wishes to judge the plants’ profitability.”
The Byron plant is outside Byron, southwest of Rockford, and dates from the mid-1980s. The Dresden plant is in Morris, about 65 miles southwest of Chicago, and was started in 1970. Together, they account for 30% of Illinois’ carbon-free energy output.
Jordan Abudayyeh, Gov. J.B. Pritzker’s press secretary, said Exelon made similar threats before it won subsidies in 2016 to keep its Clinton and Quad Cities plants open. The company must submit to “a thorough and transparent review of its finances,” she said.
“First, let’s remember that Exelon already receives a ratepayerfunded subsidy of $235 million per year to run nuclear plants in Illinois,” Abudayyeh said. “While they couch their messaging in their desire for a cleanenergy future, their primary purpose is to dramatically increase those subsidies on behalf of their shareholders. Like the governor said earlier this year, transitioning to a clean renewable energy economy is a top priority for his administration, but the utility companies will not write the legislation to get the state there.”
The company isn’t shy about applying legislative pressure. It said its Exelon Generation unit, which operates the plants, must start shutdown preparations in the coming weeks.
That includes scaling back refueling outages this fall, reducing the hiring of union labor associated with the work.
The fate of the plants will be a prime topic for the General Assembly, which will labor in the shadows of the ComEd bribery scandal.
The utility confessed in July to paying associates of Illinois House Speaker Michael Madigan $1.3 million to buy his favor. Madigan has not been charged, but ComEd, as part of a deferred prosecution agreement with the federal government, agreed to a $200 million fine and said it would continue cooperating in the probe.
It confessed to bribes over eight years through 2019, a period that covered major legislative victories for ComEd. They included the 2011 passage of the Energy Infrastructure and Modernization Act, which granted ComEd more power to bypass regulators and charge rates based on current interest rates. It also required utilities to install “smart meters” that encourage conservation and modernize the power grid.
The watchdog Citizens Utility Board opposed the original law but has praised its emphasis on “smart grid” technology that can help people control their own utility bills.
Reacting to Thursday’s announcement, CUB said Exelon needs to open its books but doesn’t deserve a blank check. Exelon’s nuclear plants “are an essential part of the state’s formula for lowering electricity bills” and reducing pollution, according to the utility board.
State Rep. Lawrence Walsh Jr. (D-Elwood) said Illinois needs to protect the jobs associated with the nuclear plants and ensure they can export power to other states. Walsh, chairman of the House Public Utilities Committee, said lawmakers have been working with Exelon and others to establish a “balanced” energy policy, a discussion that will get new urgency because of the closure threat.
The plants are at a disadvantage, Exelon said, from market rules that allow fossil fuel plants to underbid them. It said the same rules also threaten the viability of its La Salle and Braidwood nuclear plants. In all, Exelon Generation owns six nuclear plants in Illinois.
A 2019 study by the Brattle Group, funded by Exelon Generation and prepared for the IBEW and the Illinois AFL-CIO, concluded shutting the Byron, Dresden, La Salle and Braidwood facilities would cost Illinois ratepayers $483 million a year through 2029 and increase air pollution.
U.S. Rep. Adam Kinzinger (R16th), whose district includes the Byron plant, called Exelon’s announcement a “gut punch to the people of Illinois” and blamed it on Madiganled corruption in Springfield. He called on U.S. Sen. Dick Durbin (D-Ill.) to help him with legislation that would re-appropriate ComEd’s $200 million fine to benefit the communities surrounding the Byron and Dresden plants.