* Crain’s…

Two of Exelon’s Illinois nuclear plants were successful bidders in the auction held last month by the power-grid operator for the region, ensuring they will operate through at least mid-2023.

The LaSalle and Braidwood nukes bid low enough to receive $69 per megawatt-day in “capacity” payments from households and businesses throughout Commonwealth Edison’s service territory, Exelon disclosed today in a Securities & Exchange Commission filing. The price takes effect for the year beginning June 1, 2022.

PJM Interconnection, the multistate grid operator whose region includes northern Illinois, conducts an auction each year of power generators and other providers to ensure there’s enough juice available during the highest-demand periods of the year—usually heat waves or sharp cold snaps. Households and businesses pay the charge each month as a form of insurance to ensure those power plants deliver when needed, and they’re embedded in energy prices charged by ComEd and alternative power suppliers.

Unsuccessful were the Quad Cities, Byron and Dresden nukes. Quad Cities already is subsidized by Illinois ratepayers and is in no danger of early closure. But Exelon plans to shutter Byron and Dresden this coming fall without additional state support.

There’s more to this, so go read the rest.

* Quick market explainer from Bloomberg…

The market, which pays generators to be on standby in case extra power is needed, has long been a source of controversy. While it makes the grid more reliable, the system drives up costs for consumers. In the area around Chicago, for instance, these charges total more than $1.7 billion per year, accounting for 20% of customer bills, according to the Illinois Clean Jobs Coalition.

* From Exelon’s SEC filing…

All of Generation’s other [non-Illinois] nuclear and fossil generation power plants located in the PJM market cleared in the auction

From the independent Synapse audit…

• Exelon’s bidding behaviors into PJM’s capacity market have changed in recent auctions. This includes higher capacity offer prices than were seen historically. Some units were bid into PJM’s capacity market at prices which were ultimately above the capacity market clearing price. Other prices came in just above or below the market clearing price, which results in the plants receiving capacity revenues for only a portion of their capacity offers.

• Exelon’s bidding behavior is causally related to its confidence that its units would ultimately be profitable. Exelon has elected as a strategy to submit lower bids for profitable units.

* Back to Bloomberg…

The lower [auction] prices could be especially painful for Exelon’s nuclear plants in Illinois, putting pressure on lawmakers to grant them bailouts.

Bloomberg Intelligence Analyst Kit Konolige said in a research note that Exelon could face a $900 million pretax hit. On Thursday, Exelon issued a statement saying it planned to close two more of its reactors in Illinois unless the state offers subsidies. […]

Nuclear plants did manage to win more contracts in the auction, clearing an additional 4,500 megawatts from the prior auction in 2018. Wind and solar power added about 1,300 megawatts, and natural gas added 3,400 megawatts. Coal slipped by about 8,200 megawatts.

So, it’s probably safe to say that it may turn out to be a good thing that Exelon got locked into a deal on May 31.

* Related…

* Here’s what’s in the big state energy bill still awaiting action