By Peter Key and Rory D. Sweeney
Exelon executives expressed confidence during a fourth-quarter earnings call that programs supporting the company’s nuclear generation fleet will expand into other states this year.
“Since our last earnings call, we continue to see positive momentum for policy changes … at state, FERC and RTO levels,” said Joe Dominguez, vice president of governmental and regulatory affairs and public policy.
Dominguez said Exelon is focused on three goals: ensuring that resilient resources are compensated fairly; addressing the price formation flaws that PJM has identified; and preserving and expanding zero-emission credit (ZEC) programs and similar initiatives. All three would benefit the company, which has the largest nuclear fleet of any U.S. generator and has seen its plants undercut in power markets by cheaper natural gas and renewable energy.
According to its critics, Exelon is seeking subsidies for plants that are no longer economical to operate. But the company maintains that it is asking to be compensated for the reliability of nuclear generation, which can run constantly and don’t emit greenhouse gases.
CEO Christopher Crane said the company will continue to defend the ZEC programs in Illinois and New York and work to get similar programs enacted in New Jersey and Pennsylvania. The New Jersey Legislature is considering a bill that would subsidize the state’s nuclear plants.
Exelon also is urging FERC to adopt PJM’s price formation proposal, Crane said. PJM stakeholders endorsed the RTO’s problem statement and issue charge to examine price formation procedures for its energy markets at a Markets and Reliability Committee meeting in December.
The PJM-backed revisions would allow large, inflexible generators like coal-fired and nuclear to plants to set LMPs, which current rules prohibit. When such units are dispatched despite LMPs below their offers, they must seek reimbursement through uplift payments. (See PJM Markets and Reliability Committee Briefs: Dec. 21, 2017.)
Exelon earned $1.87 billion ($1.94/share) in the fourth quarter of 2017, compared to $204 million ($0.22/share) a year earlier. Its adjusted earnings per share were 55 cents, which fell short of the Zacks Investment Research consensus estimate of 62 cents.
Exelon’s revenue in the quarter was $8.38 billion, up from $7.86 billion a year prior and ahead of the Zacks consensus estimate of $7.6 billion.
Quotes courtesy of Seeking Alpha.