Exelon Announces closure of Three Mile Island-1 in 2019

On Tuesday, May 30th 2017, Exelon said the failure of power markets to properly value the benefits of nuclear generation is one reason the company has decided to shut its Three Mile Island-1 nuclear unit in Pennsylvania.  Exelon is expected to permanently shut the 890 MW unit in Middletown, Pennsylvania , "on or about September 30, 2019, absent needed policy reforms," the company said in a statement Tuesday.  Three Mile Island-2 permanently shut after a March 1979 accident caused a partial meltdown.

Before PJM's capacity auction for the 2020-21 planning year, the results of which were announced last week, the company said it would decide by September whether to close TMI-1 if the unit did not clear, as it had not in the previous two years. TMI-1, and Exelon's Quad Cities-1 and -2 in Illinois , did not clear the auction, the company said May 24. Generating units which do not clear the auction will not receive capacity payments in the future years; they can continue to provide power at that time, but are not obligated to do so and may, in fact, shut.

Exelon said in a letter Tuesday to regional transmission operator PJM Interconnection that TMI-1 "is unprofitable and has lost more than $300 million over the past five years despite being one of Exelon's best-performing plants."  TMI-1, Exelon said in its letter, "is highly dependent on energy market prices that are at all-time low levels as a result of a number of factors, including market rules that do not value the clean, resilient electricity provided by nuclear energy. As PJM's CEO has acknowledged, policymakers have 'tried to politely ignore these things but they … are no longer ignorable.'"

Exelon President and CEO Chris Crane said in the company's statement Tuesday: "Like New York and Illinois before it, the Commonwealth [of Pennsylvania ] has an opportunity to take a leadership role by implementing a policy solution to preserve its nuclear energy facilities and the clean, reliable energy and good-paying jobs they provide. We are committed to working with all stakeholders to secure Pennsylvania 's energy future, and will do all we can to support the community, the employees and their families during this difficult period."

Under programs adopted in New York and Illinois last year, utilities and other load-serving entities selling power to customers in those states are required to purchase one zero-emission credit (ZEC) for each megawatt-hour sold up to a maximum quantity cap established under each state's program.

The ZEC proceeds are distributed to eligible generators in those states for zero-emission megawatt-hours they produce to compensate them for the environmental benefit of avoiding carbon emissions . Exelon had said it would be forced to close some of its economically challenged nuclear units in those states if those programs were not adopted.

Source: Platts