Summary
Exelon Corporation (EXC) announced on May 24, 2018, the results of the PJM capacity auction for the 2021-2022 planning year. A significant development is that Exelon Generation's Dresden and Three Mile Island nuclear plants, along with a substantial portion of the Byron nuclear plant, did not clear in this auction and will therefore not receive capacity revenue for the specified period. This means these plants will not be compensated for providing capacity to the grid under the current auction structure beyond their existing obligations. While these specific nuclear facilities, except for Oyster Creek which is slated for retirement in October 2018, are not immediately at risk of early closure due to these auction results, the lack of clearing in a major capacity market highlights potential future revenue challenges. Exelon's other nuclear plants in the PJM market did clear. The results of this auction are critical for understanding the future operational and financial outlook of these generation assets.
Key Highlights
- 1Dresden and Three Mile Island nuclear plants did not clear the PJM capacity auction for the 2021-2022 planning year.
- 2A significant portion of the Byron nuclear plant also failed to clear the PJM capacity auction.
- 3These plants will not receive capacity revenue for the 2021-2022 period as a result of not clearing the auction.
- 4Dresden and Byron are committed to fulfilling capacity obligations through May 2021 and 2022, respectively, and are not at immediate risk of early retirement.
- 5Oyster Creek nuclear plant, scheduled for retirement in October 2018, did not participate in the auction.
- 6Exelon's other nuclear plants in the PJM market successfully cleared the auction.
- 7The auction results will take effect starting June 1, 2021.