OREANDA-NEWS. Exelon is planning to shut two nuclear plants in Illinois as low-cost natural gas continues to pressure nuclear generation.

Exelon has begun to take steps to shut the 1,078MW Clinton Power Station in Clinton on 1 June 2017 and the two-unit, 1,918MW Quad Cities Generating Station in Cordova on 1 June 2018, unless state lawmakers pass proposed legislation that would boost the profitability of the plants.

Demand for natural gas could increase by about 783mn cf/d (22mn m?/d) if all the outputs from Clinton and Quad Cities are replaced by gas-fired power plants.

Nuclear plants require a large workforce, costly security measures and are subject to strict regulatory oversight — factors that can be economically challenging when gas prices are low.

Spot prices at the Henry Hub, the delivery point for gas traded on the Nymex, last year averaged $2.61/mmBtu, down by 40pc from 2014. Prices have continued to decline this year amid high inventories and a mild winter, averaging just $1.95/mmBtu.

Stagnant power demand and growing wind and solar generation have also affected the bottom line for nuclear generators.

Quad Cities and Clinton have lost $800mn in the past seven years, the company said.

Other Exelon nuclear plants are also at risk of early retirement, including Byron, Ginna, Nine Mile Point and Three Mile Island, US rating agency Fitch said.

Exelon, the largest operator of nuclear plants in the country, last month proposed legislation to Illinois lawmakers that would require electric utilities to source a portion of their power from nuclear plants starting next year. The company warned that it will have to shut the Illinois plants ahead of tougher federal CO2 regulations without that mandate.

"We have worked for several years to find a sustainable path forward… unfortunately, legislation was not passed, and now we are forced to retire the plants," said Chris Crane, Exelon president.

The Clinton and Quad Cities plants power more than 2.5mn Illinois homes, according to the Nuclear Energy Institute (NEI).

A state report found that closing the plants would increase wholesale energy costs for the region by $439mn/yr, to reach $645mn/yr. Keeping them open would avoid $10bn in costs associated with higher carbon emissions over 10 years, according to Exelon.

Illinois would have to reduce emissions by 30mn metric tonnes under the Clean Power Plan, an obligation that will be difficult to meet without the nuclear plants.