nuclear-news

The News That Matters about the Nuclear Industry

Exiting the nuclear energy business – Exelon following Dominion Resources, Ameren and Duke Energy

thumbs-downWhy Exelon will unload its nuclear plants Crains Chicago Business, Joe Cahill, 2 May 14, “…..a nuclear engineer just set the stage for Exelon Corp. to exit the nuclear power business.   CEO Christopher Crane’s agreement this week to acquire Washington’s Pepco Holdings Inc. for $6.8 billion would shift Exelon’s center of gravity decisively toward regulated utility operations and away from the fleet of nuclear power plants that has been the centerpiece of company strategy for the better part of two decades under Mr. Crane and predecessor John Rowe. If the Pepco acquisition proceeds as planned, Exelon would get well over half its profit from utility ratepayers in Illinois, Pennsylvania, Maryland and the District of Columbia. A far smaller share will come from nuclear operations that once generated as much as two-thirds of corporate earnings.

nuclear-costs3

The deal speaks volumes about Mr. Crane’s view of the nuclear business he oversaw before succeeding Mr. Rowe in 2012. Since taking over, he has largely stuck to the nuclear-focused script penned by his predecessor, assuring Wall Street that depressed electricity prices squeezing profits in the nuclear unit will rise in the not-too-distant future. But prices remain stubbornly low, as expanding natural gas supplies reduce costs at gas-fueled electric power plants.

Mr. Crane told investors the deal was an opportunistic move and insists he still expects power prices to rise…………

in the end, it really doesn’t matter if Mr. Crane still believes power prices will recover. His deal for Pepco all but ensures Exelon eventually will sell or spin off its nuclear unit.

 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……..

Mr. Crane wouldn’t be the first CEO to give up on power generation. Dominion Resources, Ameren and Duke Energy have sold or are in the process of selling their generating units. And Mr. Crane himself has talked about closing some of Exelon’s most profit-challenged plants. http://www.chicagobusiness.com/article/20140502/BLOGS10/140509964/exelons-next-deal-the-spinoff-of-its-nuclear-fleet

About these ads

May 3, 2014 - Posted by | business and costs, USA

No comments yet.

Leave a Reply

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

Follow

Get every new post delivered to your Inbox.

Join 1,127 other followers

%d bloggers like this: