By STEVE DANIELS
Groundhog Day was yesterday, but Exelon appears to want to keep celebrating. The Chicago-based nuclear giant is back to threatening to close nuclear plants in Illinois without financial help from the state.
Three months after appearing to soften on demands for hundreds of millions in ratepayer-financed subsidies, Exelon CEO Chris Crane said today that the company needs financial help this spring from Springfield.
If that doesn't happen, he said on the company's fourth-quarter earnings call, "we'll have to make the rational economic decision" on money-losing plants.
At risk of closure, he said, are two of its six Illinois nukes: the Quad Cities station in western Illinois and the Clinton plant downstate.
It was only in November that Crane said Quad Cities had gone from a money loser to break-even as the company looked forward to 2017. That is no longer the case as future wholesale power prices have dropped since then.
Asked on the call if Quad Cities has "gone back out of the money," Crane said, "It is; with these forward (prices), it is."
The renewed threats come as Exelon posted its first year-over-year earnings increase in years for 2015. The company gave investors the welcome news that it plans to raise its dividend 2.5 percent a year for the next three years.
Exelon's dividend—always a critical issue for shareholders of any utility holding company—has remained steady since 2013 when the company slashed it by more than 40 percent as its earnings outlook cratered.
That swiftly led to a punishing decline in Exelon's stock price from which the company hasn't recovered. Shareholders responded positively to the news today, bidding up Exelon's stock price by nearly $1 per share, or 3.2 percent, to $31.12 in early afternoon trading.
Exelon's earnings growth in 2015 was due to higher profits in its regulated utilities like Commonwealth Edison, which delivers electricity in northern Illinois. Its unregulated power plants, which still account for more than half of its earnings, continued to decline.
ComEd's profits have risen because of higher rates charged to Chicago-area households and businesses to pay for a legislatively authorized $2.6 billion grid modernization program. This year, Exelon forecasts that ComEd will account for about 22 percent of its total earnings, up from 19 percent in 2015.
The higher dividend along with the improved profits at ComEd caused critics of Exelon's proposed nuclear subsidy to cry foul.
"Exelon shouldn't be allowed to impose higher electricity charges on Illinois businesses and residential consumers to subsidize its uncompetitive nuclear plants while keeping profits from its better-performing plants and raising its dividend at consumers' expense," said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, a frequent Exelon critic. "ComEd is adding more earnings to the company's profits as Northern Illinois consumers are using less electricity."
Crane said today that Exelon has "very strong support from the leadership in the Legislature and the (Rauner) administration on coming to a resolution on the energy outlook for Illinois."
Negotiations are ongoing over legislation pushed by ComEd to overhaul how delivery rates are set, as well as a bill promoted by environmentalists like Learner and consumer advocates to promote green power and energy efficiency. Add the nuclear subsidies to that wish list.
"It's our job to get the stakeholders together," Crane said. "We're working hard on that and to bring the leadership what is a consensus package that's good for all of Illinois and its customers. . . .We're hopeful we can have reasonable heads prevail and negotiate a balanced outcome."