DALLAS-- Exelon Corp.'s plan to shutter two of its Illinois based nuclear reactors is "bad news" for the state and several local communities, says Moody's Investors Service.
The Clinton Power Station in Clinton will shut June 1, 2017 and the Quad Cities Generating Station in Cordova will close June 1, 2018.
Exelon said it was closing the two plants prior to the expiration of their operating licenses because the state legislature didn't pass legislation that would have offset the plants' financial loses by providing funding support for nuclear and solar energy.
The Quad Cities and Clinton plants have lost a combined $800 million in the past seven years, the company said.
The shutdowns are "bad news for Illinois and local governments such as the City of Clinton, DeWitt County, and the DeWitt County School District because the reactor employs approximately 700 people with roughly $63 million in payroll," wrote Moody's, which rates Illinois Baa1 with a negative outlook but does not rate the local governments.
The reactors support approximately 4,200 direct and indirect jobs and generate more than $1.2 billion in economic activity annually, Exelon said Thursday in a statement. A state report said that closing the plants would increase wholesale energy costs for the region by $439 million to $645 million annually. The report also said that keeping the plants open would avoid $10 billion in economic damages associated with higher carbon emissions over 10 years.
The early announcement does provide "time for legislators, regulators and other stakeholders to take action, such as passing legislation that compensates the reactors for their unique reliability and carbon-friendly attributes, before the shutdowns occur," Moody's said.
"Exelon continues to work with state lawmakers and other stakeholders, but the clock is ticking, putting Exelon in a difficult spot because an early retirement at Clinton and Quad Cities might create a new emergency for the Illinois legislature to address (owing to the economic effect of the facility's retirement). If this scenario pans out, Exelon could face a more hostile state regulatory environment," Moody's added.
Moody's said that low power prices also put Exelon's other nuclear plants at risk of early retirement.
At risk are the 2,347-megawatt Byron facility in Ogle County, Illinois; the 625-megawatt Oyster Creek facility in New Jersey scheduled to close in 2019; the 575-megawatt Gina facility in New York, which has an operating license to 2029; and the 837-megawatt Three Mile Island facility in Pennsylvania, which has an operating license to 2034.