nuclear-news

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

Why 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.

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

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