8-KOther EventsExhibits & Filings

EXELON CORP 8-K Report, Corporate Update (Jun 3, 2021)

Filed June 3, 2021For Securities:EXC

Summary

This 8-K filing from Exelon Corporation (EXC) on June 3, 2021, reports the results of the first PJM capacity auction since 2018 for the 2022-2023 planning year. Notably, Exelon Generation's Byron, Dresden, and Quad Cities nuclear plants did not clear in this auction. The Byron and Dresden plants are currently slated for premature retirement in Fall 2021. While Braidwood and LaSalle nuclear plants did clear, they also face potential premature retirement due to unfavorable market rules that favor emission-producing generation, with the cleared capacity providing a window for planning until May 2023. The Quad Cities plant will continue operating under support from the Illinois Future Energy Jobs Act, though it did not clear the capacity auction. Exelon attributes this outcome for Quad Cities, in part, to the Minimum Offer Price Rule (MOPR) recently implemented by PJM, which they argue prevented the plant from clearing at a lower cost and will result in customers paying more for polluting generation. The filing indicates that PJM and its stakeholders are considering MOPR reforms. All other Exelon nuclear and fossil fuel generation plants within the PJM market did clear the auction.

Key Highlights

  • 1Byron, Dresden, and Quad Cities nuclear plants failed to clear the 2022-2023 PJM capacity auction.
  • 2Byron and Dresden nuclear plants are scheduled for premature retirement in Fall 2021.
  • 3Braidwood and LaSalle nuclear plants cleared the auction but may retire prematurely due to unfavorable market rules.
  • 4Quad Cities plant will continue operating under Illinois state support, despite not clearing the auction.
  • 5Exelon cites the PJM Minimum Offer Price Rule (MOPR) as a factor preventing Quad Cities from clearing and potentially increasing costs for customers.
  • 6PJM is considering MOPR reforms to address concerns about market rules and state resource preferences.
  • 7All other Exelon nuclear and fossil fuel generation plants in the PJM market cleared the capacity auction.

Frequently Asked Questions

The Byron, Dresden, and Quad Cities nuclear plants did not clear in the 2022-2023 PJM capacity auction. The Byron and Dresden plants are scheduled for retirement in Fall 2021. Braidwood and LaSalle cleared but face potential premature retirement. Quad Cities will continue to operate with Illinois state support.

The capacity auction determines the revenue these power plants can earn by being available to supply electricity during peak demand periods. Failing to clear the auction means these plants may not receive sufficient revenue to remain economically viable, leading to potential premature retirements, as indicated for Byron and Dresden.

The MOPR is a rule implemented by PJM that sets a minimum price for power plant offers into the capacity market. Exelon believes the recently implemented MOPR prevented its Quad Cities plant from clearing the auction at a potentially lower cost and favors polluting generation over clean sources like nuclear. They are hopeful that PJM reforms will address this.

The filing states that all of Exelon Generation's other nuclear and fossil fuel power plants located in the PJM market successfully cleared in the capacity auction. This suggests that these assets are expected to continue operating under the current market structure for the 2022-2023 planning year.