By Andrew Maykuth
In the latest sign of a fundamental market shift toward cleaner fuels, Exelon Corp. announced today that it would shut down two aging fossil-fuel power plants in Phoenixville and Eddystone in 2011, eliminating 280 jobs.
Exelon said that it would completely close the Cromby Generating Station along the Schuylkill in Phoenixville and that it would retire two coal-fired generators at the Eddystone Generating Station on the Delaware River.
The company said the decision to shut the Eisenhower-era power plants was based on economics – the high-maintenance units are costly to operate in deregulated electricity markets, where wholesale prices are depressed.
The decision also reflects a vision of the limited future of fossil fuels, especially coal, whose emissions of greenhouse gases are expected to be penalized under pending climate-control legislation.
“While these units are currently compliant with environmental regulations, we can see the increasing likelihood of environmental restrictions . . . that would require significant capital expenditures,” Christopher M. Crane, Exelon’s president, told analysts in a conference call.
The targeted units have 933 megawatts of capacity. Exelon contends that there is sufficient generation capacity in the region to meet demand, and with new natural gas supplies coming into the market, it is supplanting coal as the preferred fossil fuel. Exelon also has plans to increase the output of its Limerick and Peach Bottom nuclear reactors in the next eight years.
Exelon, based in Chicago, said it would record pretax charges totaling $258 million related to the shutdowns. Crane said the move would create up to $200 million of value for Exelon shareholders.
“While any job losses are difficult, the decision is responsive to the current and projected market conditions,” he said.
The announcement came a day after Progress Energy Inc. said it would close 11 coal-burning power plants in North Carolina that require expensive emission-control systems. And Duke Energy Corp. has announced plans to shut down 18 coal plants by 2020. Full story
