Exelon to Close New Jersey Nuclear Plant Ahead of Schedule -- Update
By Austen Hufford
Exelon Corp. will shut down a New Jersey nuclear power plant in October, a year ahead of schedule as cheaper energy sources continue to challenge the nuclear industry.
Nuclear plants have been hurt in recent years as rising natural-gas supplies have led to low wholesale electricity prices.
Exelon said higher operating costs and low electricity prices prompted it to accelerate closing the Oyster Creek plant, located near the New Jersey coast in Ocean County about 60 miles east of Philadelphia. Shutting down Oyster Creek, which can produce enough electricity to supply about 600,000 homes, also helps it avoid a refueling outage scheduled for this fall that would have required material purchases starting later this month, the utility holding company said.
Oyster Creek is one of the nation's oldest operating nuclear plants. Its reactor entered commercial service on Dec. 1, 1969, and the average age of U.S. commercial reactors is 36 years, according to the U.S. Energy Information Administration.
Several states, including New Jersey, have considered or implemented subsidies to nuclear plants to keep them running. A new law in Illinois lets Exelon collect up to $235 million annually from customers to keep two plants open. Last month, federal energy regulators rejected a Trump administration proposal aimed at helping struggling coal-fired and nuclear plants.
Last week, NextEra Energy Inc. said it expected to close the Duane Arnold Energy Center, a nuclear power plant in Iowa, in 2025. It is licensed to operate until 2034, but the company said it didn't think there would be demand for its output for that long. It took a $258 million after-tax charge to write down the value of the nuclear plant.
In 2010, Exelon reached a deal with New Jersey regulators to close the Oyster Creek plant at the end of 2019, 10 years ahead of its then-scheduled closure date. That agreement allowed Exelon to avoid building an expensive cooling tower.
The plant employs about 500 people, the company said. Exelon said some workers will stay on decommission the facility while others will be offered jobs elsewhere in the company.
Exelon has estimated it will cost more than $1 billion to decommission the plant. This year, Exelon expects to incur noncash charges of between $150 million and $185 million in connection with its plan for Oyster Creek.
Write to Austen Hufford at firstname.lastname@example.org
(END) Dow Jones Newswires
February 02, 2018 12:39 ET (17:39 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.