By Amanda Durish Cook

Exelon has delayed for a year a decision on whether to mothball its Clinton reactor, the company said Thursday. CEO Chris Crane said the central Illinois plant will take part in MISO’s spring capacity auction, keeping the reactor functioning throughout the 2016/17 operating year.

The company’s decision was announced two days after MISO released a draft issues statement that acknowledged the need for design changes for retail choice states such as Illinois.

The company also cited the Illinois Power Agency’s capacity procurement for 2016 and the hope that its nuclear plants will receive a boost from the Environmental Protection Agency’s Clean Power Plan.

“We are encouraged by MISO’s statement and the potential for market reforms that are necessary to ensure long-term reliability in Southern Illinois,” Crane said in a statement. “However, the Clinton plant remains unprofitable and more needs to be done.”

Schedule Change?

Exelon has urged MISO to emulate neighboring PJM in holding capacity auctions three years in advance. At a FERC technical conference on the RTO’s capacity market Oct. 20, Dynegy also called for a longer capacity planning horizon. (See FERC Session on MISO Capacity Rules also Puts Stakeholder Process Under Scrutiny.)

MISO currently holds its auctions in March, less than three months in advance of the June 1 start of the operating year.

For restructured states such as Illinois, the issues statement acknowledged, “MISO’s resource adequacy construct may not provide a price signal sufficiently in advance” to incent new resources or to sustain investment in existing ones.

With baseload resources retiring due to environmental rules, the growth of renewables and low natural gas prices, it said “a market that solely delivers price signals reflecting short-term excess as is the case today may become insufficient” to ensure sufficient capacity, MISO said.

“While this may pose little challenge for states with a regulated framework for making new resource investment decisions, those that depend on market prices as the primary signal may become insufficiently served by the current MISO construct in future years.”

Price Formation

In addition to highlighting the shortcomings of the current schedule, the statement also cited “year-to-year volatility and the inability to efficiently recognize the marginal reliability value of incremental capacity resources” as problems. “As a result, the price signal produced may not suffice in the future as efficient or reliable enough to serve as an investment signal in a fully competitive retail market such as Illinois.”

At the Supply Adequacy Working Group meeting Oct. 29, Jeff Bladen, MISO’s executive director of market design, said it’s too early to have a timeline for solutions, and speculation on specific solutions is “premature.”

“We wouldn’t presume to know if this can be solved in two months, six months, nine months,” he said.

The issue is a top concern within the RTO; the meeting’s operator ran out of phone lines for stakeholders seeking to listen in remotely.

FERC’s MISO liaison, Chris Miller, told the Market Subcommittee earlier in the week that the commission has not set a schedule for any action it may take in response to the Oct. 20 technical conference.

“No word on what the commission’s going to do with that information just yet,” Miller said. Post-conference comments were due Nov. 4.

Nuclear Profitability

Last year, a Chicago Tribune financial analysis found Clinton was the least profitable last year among Exelon’s six Illinois nuclear plants, which the company says have suffered due to competition from low-cost natural gas and wind generation.

The Tribune said Clinton has earned below $29/MWh in recent years while the plant’s lone reactor requires between $45 and $55/MWh to meet operating costs.

Exelon has said that three of the six nuclear stations — Clinton, Quad Cities and Byron — are unprofitable.

The company cited the Illinois Environmental Protection Agency’s estimate that the loss of two Illinois nuclear power stations would more than double the emissions reductions required by the Clean Power Plan.

Exelon has requested that Illinois expand its clean energy subsidies to include nuclear power alongside wind and solar energy. Those critical of the Exelon subsidies have called them a nuclear “bailout” and said they would cost ratepayers around $300 million annually in surcharges. (See Exelon-Backed Bill Proposes Surcharge to Fund Illinois Nukes.)

Exelon says its year-long delay on Clinton will also give Illinois policymakers “more time to consider policy reforms and potential legislation that will level the playing field for all forms of carbon-free electricity.”

The 28-year-old Clinton generating station has a workforce of nearly 700 and is one of DeWitt County’s largest employers.