Exelon Corp. said Tuesday it has begun the process of closing down its money-losing Three Mile Island nuclear power plant and will complete the shutdown by September 2019 unless lawmakers make changes to help the facility compete in an increasingly cut-throat energy market.
Last week, the company warned that Three Mile Island, located in Pennsylvania, didn't clear required capacity auction conditions. It said the plant has continued to struggle because of low wholesale power prices and energy policies the company said don't "value zero-emissions nuclear energy." It said Three Mile Island hasn't been profitable in five years.
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Power producers bid in annual capacity auctions for long-term contracts to supply electricity; Three Mile Island hasn't cleared its past three annual auctions.
Power demand in the U.S. has been flat for nearly a decade, creating a battle for market share between different generation sources. Natural gas has displaced a significant amount of coal generation, and the gas industry is also taking aim at nuclear power.
Last year, natural gas generated 33.8% of the electricity in the U.S., according to federal data. Nuclear power generated 19.7%. Coal generated 30.4%. The rest came from renewable sources, including hydroelectric dams.
Exelon said Tuesday that it will immediately take a one-time charge ranging from $65 million to $110 million this year in connection with the move.
The company said the facility employs 675 people while contracting with an additional 1,500 workers. Exelon's Chief Executive Chris Crane urged local legislators to help keep the doors of the facility open by providing subsidies or similar assistance.
"[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," Mr. Crane said.
State lawmakers in March formed a bipartisan Pennsylvania Nuclear Caucus to focus discussion on the issue. Nuclear power makes up about 37% of the state's total power production. Pennsylvania houses five nuclear stations, giving it the second-largest nuclear capacity in the U.S., according to a statement from the caucus.
Members of the caucus weren't immediately available for comment.
In 1979, a partial core meltdown in one of the reactors of the Three Mile facility led to five days of panic and 14 years of expensive clean-up. The incident didn't cause any fatalities but did have a sizable impact on the winding-down of the nuclear power industry in the U.S. in the 1980s and indelibly marked public perception of the safety of nuclear plants.
A handful of nuclear power plants have shut down in recent years, most of them forced out of service by intense competition from inexpensive, reliable natural gas-fired power plants as well as solar and wind farms, which get federal subsidies. Operators say several more nukes are threatened because they can't turn a profit.
Exelon and other electricity producers in several states are asking for hundreds of millions of dollars in financial support to keep costly nuclear power plants in business.
The utilities claim the nuclear reactors should be given special compensation because they are important to local economies and the electrical grid's stability, and because they don't emit greenhouse gases or other pollutants.
Write to Ezequiel Minaya at email@example.com
(END) Dow Jones Newswires
May 30, 2017 10:49 ET (14:49 GMT)