POWER September 2016 - 73

GENERATION TRANSITIONS
1. Losing proposition. Exelon's Clinton Nuclear Generating Station, shown here, and
its Quad Cities nuclear plant have lost a combined $800 million over the past seven years.
Courtesy: Wikipedia/By Daniel Schwen
" With Governor Cuomo's leadership, we
have an opportunity to rescue and continue
to operate a critical power plant that supports
thousands of skilled men and women, " said
Crane. " The proposed CES program, if approved,
will give us the confidence to invest
hundreds of millions of dollars in FitzPatrick in
January to refuel the plant and upgrade systems
needed to reverse the shutdown decision. "
But a deal with Entergy depends on adoption
of Cuomo's plan. That's up in the air at the writing
of this article. Noting that, " we know how
to operate nuclear plants, " Crane said, " We are
not going to take on any further merchant risks. "
A sale to Exelon would require a timeconsuming
and possibly daunting series of
regulatory hurdles at the Justice Department or
Federal Trade Commission for antitrust issues,
the U.S. Nuclear Regulatory Commission, the
Federal Energy Regulatory Commission, and
before regulators in Illinois and New York.
Also on critical life support is Exelon's
2. New member of the family? Exelon and Entergy are discussing terms of a possible
Exelon acquisition of the James A. FitzPatrick Nuclear Power Plant in upstate New York. Source:
Nuclear Regulatory Commission
825-MW Three Mile Island unit in Pennsylvania,
which, along with Quad Cities, failed
to clear the PJM 2019-2020 capacity auction.
Crane said, " The capacity market alone
can't preserve zero-carbon emitting nuclear
plants that are facing the lowest wholesale
energy prices in 15 years. "
Crane said he was optimistic about Cuomo's
plan, if it can be enacted [which it was on
August 1]. It " guarantees a long-term revenue
stream " that Exelon believes allows it to plan
for the future. " If the program is approved, "
Exelon public policy chief Joseph Dominguez
said in July, " we will immediately reinvest approximately
$200 million in the plants in the
spring and continue to operate. If the program
is not approved, we need to go in a different
direction. "
At the same time, New Orleans-based Entergy
Corp. is facing the closure of its FitzPatrick
plant in New York, located next door
to Exelon's Nine Mile Point station on Lake
Ontario. Entergy has said its decision to close
the money-losing plant is firm (see " Entergy
Sheds Uneconomic Merchant Nuclear Plants
to Focus on Regulated Business " in the April
2016 issue or at powermag.com). Entergy's
intent comes despite Cuomo's subsidy proSeptember
2016 | POWER
posal, which Entergy says is too late.
Exelon's threatened New York nuclear
units and Entergy's FitzPatrick plant are in
NYISO's market, where auction prices do
not reflect any value for lower carbon dioxide
emissions. Cuomo's proposed Clean Energy
Standard (CES) attempts to remedy that situation.
According to the New York utility regulators'
staff, the cost of the Cuomo plan over
the first two years would amount to nearly $1
billion, far in excess of the original estimates.
While Entergy wants out of the NYISO
market, the prospect of the New York benefits
for the upstate nukes has struck a positive
cord for Exelon, including the possibility
that it could buy Entergy's unit if the Cuomo
plan comes to life. In a July 13 press release,
Crane said Exelon and Entergy are discussing
terms of an acquisition of FitzPatrick
(Figure 2), although he told POWER it would
be premature to discuss them in detail.
www.powermag.com
Exelon's Long, Convoluted History
Exelon's modern history is largely the product
of the legendary leader John Rowe during
a 14-year period in the late 20th and early
21st centuries. Rowe, often an iconoclast in
electric utility circles (he supported cap-andtrade
legislation for controlling greenhouse
gas emissions, was skeptical of new nuclear,
and unloaded coal-fired plants as fast as he
could), engineered a series of major mergers
that put Chicago-based Commonwealth
Edison on the path from a local power to the
nation's largest electric utility.
But the company has deep historical roots.
The base of the corporate tree was Chicago's
Commonwealth Edison. The company began,
as so many U.S. electric companies did,
in the immediate aftermath of Thomas Edison's
Pearl Street Station and the creation of
General Electric Co. An early figure, George
H. Bliss, started a GE subsidiary to sell small
generators and lighting systems in Chicago,
serving one or several buildings. Another
company with a larger vision bought the
company in 1882 with the aim of developing
central station electric generation.
Through a series of business moves and acquisitions,
that company-Chicago Edison-
came under control of Edison's chief business
developer, Samuel Insull, who swept up a
number of Chicago electric companies and
initiated construction of a 6.4-MW generating
station-then the largest in the U.S.-which
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POWER September 2016

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