Will Exelon get out of the nuclear business?

Exelon's Byron reactors are among those the company has said it may close for economic reasons.

Exelon’s Byron reactors are among those the company has said it may close for economic reasons.

Will Exelon get out of the nuclear business? Columnist Joe Cahill, who follows the company closely for Crain’s ChicagoBusiness.com, thinks that Exelon’s current attempt to buy the Washington DC-area utility Pepco is the first step toward re-structuring Exelon away from electricity generation and toward being an electricity provider. Writes Cahill, “Acquiring utility-focused Pepco will reduce power generation to a sideshow at Exelon. Investors sizing up the company will consider nuclear operations an unpredictable outlier and a drag on earnings from the utility business.”

Cahill adds,

“Wall Street prizes “pure play” companies that concentrate on a single line of business. This preference has unleashed a wave of breakups among America’s largest companies, including Chicago-area stalwarts Motorola Inc., Abbott Laboratories and Kraft Foods Inc.

Mr. Crane, who has slashed Exelon’s dividend and seen its share price decline more than 10 percent on his watch, will face pressure to follow suit. Shedding Exelon’s nuclear fleet would create the simple, monoline investment story Wall Street is demanding.”

Our only question is: who on earth would buy this fleet of aging, dangerous reactors, some of which already are on the verge of shutting down because they can’t compete economically? Okay, another question: Would Exelon be better off just shutting them all down? A spin-off of Exelon’s nuclear business, as Cahill suggests is one option, probably isn’t feasible; Entergy tried that a few years ago but state regulators nixed the idea. There’s little reason to believe an Exelon spin-off attempt would experience a different fate. So, if that route is impossible, and there are no likely buyers, what is Exelon’s alternative? Keeping them running in the hopes that nuclear economics will change? That’s the company’s current strategy, which led to the creation of the Nuclear Matters front group that is now lobbying furiously to change the system. But assuming failure of that effort–and that fight is going on now–will Exelon really have an alternative?

Michael Mariotte

May 12, 2014

Permalink:  https://safeenergy.org/2014/05/12/will-exelon-get-out-of-nuclear/

You can now support GreenWorld with your tax-deductible contribution on our new donation page here. PayPal now accepted. We gratefully appreciate every donation of any size–your support is what makes our work possible.

Comments are welcome on all GreenWorld posts! Say your piece above. Start a discussion. Don’t be shy; this blog is for you.

If you like GreenWorld, you can help us reach more people. Just use the icons below to “like” our posts and to share them on the various social networking sites you use. And if you don’t like GreenWorld, please let us know that too. Send an e-mail with your comments/complaints/compliments to nirsnet@nirs.org. Thank you!

Note: If you’d like to receive GreenWorld via e-mail daily, send your name and e-mail address to nirsnet@nirs.org and we’ll send you an invitation. Note that the invitation will come from a GreenWorld@wordpress.com address and not a nirs.org address, so watch for it.

Advertisements

One thought on “Will Exelon get out of the nuclear business?

  1. Peter Sipp

    Close the putrid reactors… tough beans… SINCE they are UNABLE to compete… NO mercy for ’em.

    Reply

We welcome your comments here!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s