Exelon Generation said Thursday it plans to retire two nuclear power stations in Illinois next year, citing low energy prices and policies that it said favor fossil fuel generation.

U.S. Electricity Generation

The Byron facility outside the city of Byron is to close in September 2021, and the Dresden facility in Morris is set to close in November 2021, the Exelon Corp. subsidiary said. The Dresden plant is licensed to operate for another decade, while Byron could operate another 20 years 

The two plants on the PJM Interconnection power grid supply a combined 30% of Illinois’ carbon-free energy, the company said, and considered “essential” to meeting the state’s 100% clean energy goal.

“Despite being among the most efficient and reliable units in the nation’s nuclear fleet, Dresden and Byron face revenue shortfalls in the hundreds of millions of dollars because of declining energy prices and market rules that allow fossil fuel plants to underbid clean resources in the PJM capacity auction, even though there is broad public support for sustaining and expanding clean energy resources to address the climate crisis,” Exelon said. “The plants’ economic challenges are further exacerbated by a recent FERC ruling that undermines longstanding state clean energy programs and gives an additional competitive advantage to polluting energy sources in the auction.”

The Federal Energy Regulatory Commission in December directed PJM to expand its minimum offer price rule (MOPR) “to apply to any new or existing resources that receives, or is entitled to receive a state subsidy.”

FERC Chairman Neal Chatterjee justified the move by saying that clean energy subsidies paid by PJM states to support out-of-market nuclear and renewable energy threatened the competitiveness of the grid operator’s capacity market.

Exelon at the time called the move “stunning,” saying it would undermine alternative and renewable energy, as well as unnecessarily raise electricity rates by $2.4 billion annually.

“As a result of these market rules, Exelon Generation’s LaSalle and Braidwood nuclear stations in Illinois, each of which house two nuclear units and employ more than 1,500 skilled workers, are also at risk for premature closure,” Exelon said.

“Studies have shown that when nuclear plants close, plants that burn fossil fuels operate much more often, increasing harmful carbon and air pollution, especially in disadvantaged communities.”

Exelon said while Illinois is currently at about 85% progress toward reaching its 2025 greenhouse gas emissions goals in line with the United Nations Climate Accord, “if the four economically challenged nuclear plants (Dresden, Byron, Braidwood and LaSalle) prematurely retire, Illinois will drop to only 20% of the way toward the goal.

“Electric sector emissions in Illinois will increase by 70%.”

The Byron and Dresden plants earmarked for early retirement employ 1,500 full-time workers and 2,00 supplemental workers during refueling outages.

“Although we know in our heads that shutting down the uneconomic Illinois plants is necessary to preserve even more jobs elsewhere, our hearts ache today for the thousands of talented women and men that have served Illinois families for more than a generation and will lose their jobs because of poorly conceived energy policies,” said Exelon CEO Christopher Crane. “But we are only about a year away from shutdown and we need to give our people, the host communities, and regulators time to prepare.”

He added, “We recognize this comes as many of our communities are still recovering from the economic and public health impacts of the pandemic, and we will continue our dialogue with policymakers on ways to prevent these closures.”

The company said it plans to file a deactivation notice with PJM and inform key stakeholders and regulatory agencies of the retirements over the coming days.