BY JULIE WERNAU
Exelon told investors Thursday it expects to be compensated for the environmental and economic benefits that its nuclear plants provide in Illinois.
In a conference call after the power company released second-quarter earnings, Exelon officials noted that Illinois lawmakers are currently drafting legislation that would help the state adhere to new federal rules aimed at cutting cabon dioxide emmissions. Because nuclear plants produce no carbon, Exelon has been lobbying to highlight the environmental and economic benefits of its nuclear plants.
Chicago-based Exelon, which owns six nuclear plants in Illinois, has signaled that as many as three of those plants could close if policies at the state and federal level don't help it increase profitability.
Joseph Dominguez, senior vice president of government and regulatory affairs for Exelon, said it is too early to release details of what that legislation would look like. But he noted that “state agencies are drafting a number of reports that'll look at the economic value of the units to the local communities, jobs, the value of the energy produced.” He said that he expects those reports to become available as early as November.
The Environmental Protection Agency's aggressive goals of 30 percent greenhouse gas reductions from 2005 levels by 2030 give Exelon a strong hand in pushing rules that reward its nuclear plants. Closing just one of those plants would set the state back in its carbon-cutting goals.
Exelon said it expects to wait until June 2015 before making any decisions about the fate of plants that are on the bubble. Previously, the company said it would make those decisions by year end.
“It's pretty clear that if you're losing nuclear plants, your ability to comply with any carbon regime going forward is going to be jeopardized,’’ Dominguez said. “The plants produce a tremendous amount of zero carbon energy, and so if you lose those, you're going to see a big uptick in carbon emissions. And we've seen that in states where plants have actually retired.”
Revenue at Exelon Corp. dropped to $6 billion versus $6.1 billion a year earlier in a quarter in which the company made several high profile deals to diversity a portfolio that relies heavily on nuclear power.
In April, Exelon announced it would purchase Pepco Holdings Inc. for $6.8 billion to serve a combined 10 million gas and electric utility customers.
That deal is expected to close in the second or third quarter of 2015.
Wednesday, Exelon also announced it would purchase the retail electricity seller Integrys Energy Services for $60 million. The Integrys Energy Group subsidiary provides electricity to 720,000 Chicagoans.
Profits rose 6.5 percent in the second quarter as lower energy prices were partially offset by higher reservation fees it receives from the grid operator for its power and lower income taxes.
Exelon reported second-quarter net income of $522 million, or 60 cents per share, versus $490 million, or 57 cents per share, a year earlier.
Shares were down nearly 1.5 percent in premarket trading to $31.01.