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Contact: Stephen Kent, email@example.com, 914-589-5988
Independent Expert Sources on Planned Exelon Break-up Warn of Safety Risks and a Grab for More Subsidies
Below are two short statements by independent experts from nuclear industry watchdog groups commenting on Exelon’s announcement that it intends to split into two companies. These experts are also available for comment and interviews, details below.
By way of background, Chicago-based Exelon is the nation’s largest electric utility company. Its board approved a plan to separate Exelon Utilities (which it called RemainCo) comprised of six utilities including Commonwealth Edison, and Exelon Generation (which it called SpinCo) comprised of Exelon’s nuclear, gas, and renewable energy companies serving retail and wholesale customers, including Constellation Energy. Exelon’s CEO said the breakup would enhance the two companies’ “strategic flexibility to focus on their unique…priorities.”
But Crain’s Chicago Business reported today that skepticism on Wall Street and inferior stock valuation compared to its peers are putting pressure on the company to break up. Since Commonwealth Edison admitted to federal prosecutors it was involved in a bribery scheme to motivate former Illinois House Speaker Michael Madigan to push for massive state subsidies for Exelon’s nuclear plants, separating from ComEd may put “SpinCo” in a better position to lobby for nuclear subsidies going forward, Crain’s said.
Dave Kraft, cofounder and director of the Nuclear Energy Information Service in Chicago, said today:
“The announced Exelon split into a generation company separate from its transmission/ distribution utility is currently short on details – where potential devils always reside. Obviously, Exelon is doing this to enhance and protect profitability, where its nuclear fleet has served as a drag requiring several artificial bailouts in several states where their reactors operate. When profitability falls, cost-cutting is one of the first methods to improve it. If its nuclear plants are unprofitable now, allegedly requiring bailouts, any further cost-cutting in the “SpinCo” could have serious safety implications, as staff and O&M funds become targets for reduction in spending. State legislators and governors dealing with energy legislation – as is currently occurring in Illinois – will need to be increasingly vigilant about this, since the federal Nuclear Regulatory Commission (NRC) has become a rubber-stamp for the nuclear industry.”
Tim Judson, Nuclear Information and Resource Service in Washington, DC, said today:
“Exelon’s spin-off plan must not be another corporate bailout scheme. Exelon intentionally made itself into the largest nuclear power company in the U.S. Yet it is increasingly dependent on close to a billion dollars per year in new subsidies for old nuclear power plants, and is still seeking more. Exelon’s spinoff scheme has significant public safety and environmental implications that cannot be ignored. The new company that would own Exelon’s 23 reactors would be undercapitalized and under even greater pressure to cut costs on maintenance, safety, and the workforce, even with subsidies. Also, Exelon has not set aside enough funds for decommissioning all of its reactors. This could expose states to unacceptable risks that these radioactively polluted sites will not be cleaned up. The reality is that Exelon’s aging fleet of reactors are incredibly expensive, risky, and increasingly unprofitable. If Exelon no longer sees a future for itself in nuclear power, why should anyone else? This is an opportunity to separate the largest utility company’s financial interests from what is best for our economy, the climate, environmental justice, and sustainability. Phasing out nuclear subsidies and uneconomic reactors will enable massive investments in renewable energy, efficiency, and storage.”
Kraft and Judson are available for comment and interviews on request. To arrange an interview, or for further information, please contact Stephen Kent, firstname.lastname@example.org, 914-589-5988