Exelon Explains What Happened at 2014 PJM Capacity Auction

Map of PJM Interconnect

Over the past few months we've been writing a lot about how flaws in merchant electric markets have been placing significant economic stress on nuclear plants operating in those areas.

The latest piece of news on that topic came out late last month when PJM revealed the results of its 2014 Capacity Market Auction - one where three of Exelon's nuclear plants failed to "clear" the bidding.

To help provide some clarity on exactly what's going on, we sat down for a Q&A with Joseph Dominguez, a senior vice president at Exelon to ask some questions about what it means for those three plants and the future of the electric grid.

NEI: Exelon has said that Quad Cities and Byron in Illinois and Oyster Creek in New Jersey did not clear the PJM capacity auction. Why not?

Dominguez: These auction results reveal that the market does not sufficiently recognize the significant value that nuclear plants provide in terms of reliability and environmental benefits. As proven during the record-cold temperatures this winter, nuclear plants are an incredibly reliable generation source, typically producing power 24/7 regardless of weather. And they do so without producing emissions, which makes them an indispensable resource if we are to meet greenhouse gas reduction requirements outlined in the draft regulations from the U.S. Environmental Protection Agency.

Yet some of our nuclear plants face a perfect storm of economic challenges that threaten their continued operation. These include an influx of low-cost natural gas, slow load growth, and the unintended consequences of market structure and government policies that subsidize renewables and fail to recognize nuclear’s unique value as a clean, reliable workhorse of the electric grid.

You can read the whole interview over at NEI's website, "Exelon on the 2014 PJM Capacity Market Auction."

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap

An Ohio School Board Is Working to Save Nuclear Plants

Ohio faces a decision soon about its two nuclear reactors, Davis-Besse and Perry, and on Wednesday, neighbors of one of those plants issued a cry for help. The reactors’ problem is that the price of electricity they sell on the high-voltage grid is depressed, mostly because of a surplus of natural gas. And the reactors do not get any revenue for the other benefits they provide. Some of those benefits are regional – emissions-free electricity, reliability with months of fuel on-site, and diversity in case of problems or price spikes with gas or coal, state and federal payroll taxes, and national economic stimulus as the plants buy fuel, supplies and services. Some of the benefits are highly localized, including employment and property taxes. One locality is already feeling the pinch: Oak Harbor on Lake Erie, home to Davis-Besse. The town has a middle school in a building that is 106 years old, and an elementary school from the 1950s, and on May 2 was scheduled to have a referendu

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin

NEI Nuclear Notes

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