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Exelon CEO: Three Mile Island 'vulnerable' to closure

Written by Brett Sholtis/York Daily Record | Jun 8, 2016 4:40 AM
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Exelon also seeks an extension for Peach Bottom power plant, which could keep it running until 2054.

(Undated) -- Exelon Corp. will seek a second, 20-year license renewal for Peach Bottom Atomic Power Station, a step that would allow the southern York County power plant to operate until 2054.

Meanwhile, Three Mile Island faces challenges to remain viable, the company CEO said Tuesday.

The news comes on the heels of Exelon's announced plans to prematurely shutter two nuclear plants in Illinois, and comes about a month after the company's $6.8 billion purchase of Pepco Holdings. Exelon CEO Chris Crane discussed the plant closures and acquisition as well as Three Mile Island's less-than-certain future, in an interview Tuesday.

Peach Bottom

Crane pointed to Peach Bottom's high energy output -- it recently upgraded its reactors -- and its safety record as reasons to push for license renewal.

"Peach Bottom is one off the highest performing plants in the country," Crane said. The power plant employs about 800 people.

Without license renewal, the plant can operate until 2034, said Neil Sheehan, Nuclear Regulatory Commission spokesman.

The commission will spend several years to review Exelon's application, looking at the plant's infrastructure, parts of which would be 80 years old by the time the license would expire in 2054, Sheehan said.

"There are some unique challenges for companies pursuing a second 20-year license extension," Sheehan said. "They have to demonstrate that the reactor vessel will withstand the extension."

If it is approved, Peach Bottom may end up being the first nuclear power plant in the U.S. to be granted a second license renewal, Sheehan said.

Tough market 

The nuclear power industry has struggled to stay profitable in an energy market where the price of electricity has been driven down by flat consumer demand and a glut of inexpensive natural gas, Crane said. The industry must push policymakers to level the playing field by rewarding nuclear operators for creating carbon-free energy.

"The market doesn't recognize or compensate nuclear plants for their zero-carbon emission," Crane said. "We cannot meet our carbon reduction goals in this country without our existing nuclear plants."

The Clean Power Plan, a federal plan to reduce carbon emissions, presented one opportunity for that, Crane said. However, the Supreme Court put that plan on hold in February. 

"It's going to be argued in the courts, and there's a stay on it now," he said. "It creates a period of uncertainty for any of us that are making investments in plants."

Plant closures 

Two of Exelon's nuclear plants in Illinois, Clinton and Quad Cities, have already become victims of that uncertainty and that unfair playing field, Crane said. The company plans to close those plants by 2018, a result of their plants' inability to compete with rock-bottom natural gas prices.

"We think it's a very unfortunate move we had to make," Crane said. "We'd been working for five years to try to come up with a market design. We promised our shareholders we wouldn't go any further than May 31 without making the announcement. The legislation is still in. We may be able to have something productive happen there, but it's a very short window for us to be able to reverse our decision."

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Exelon president and CEO Chris Kane said Tuesday that the company will seek a second 20-year license renewal for Peach Bottom Atomic Power Station, allowing the plant to operate until 2054.(Photo: Brett Sholtis, York Daily Record)

Three Mile Island

The closures beg the question: Will Three Mile Island close early?

The plant is licensed to operate until April 2034, Sheehan said. However, the plant failed to get a contract to sell its electricity from June 2018 to June 2019, cutting off its main point of sale.

That's a burden made worse by the fact that Three Mile Island has only one working reactor, Sheehan said. Though the plant employs about 520 people, it generates less than half the power of Peach Bottom.

Crane said it's possible that the plant could close early, but Exelon wants to take other steps first to see if that can be prevented.

"It is a challenged unit," Crane said. "We're working on different market design that will continue to make TMI viable, but right now it is vulnerable."

This story is part of a content-sharing partnership between WITF and the York Daily Record.

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