Exec: Exelon deal won't revive Calvert Cliffs project
Exelon's announced purchase of Constellation Energy prompted speculation that the dormant project to build a third reactor at Calvert Cliffs on Maryland's Chesapeake shore would be revived. Exelon is the country's biggest operator of nuclear power plants. Calvert Cliffs 3 is shovel ready if only somebody would finance it. The French EDF Group, which owns 100 percent of the project at the moment, may have approached Exelon as a potential partner.
But one of the first things Exelon boss John Rowe did on yesterday's conference call was to say: No way.
"That is simply not the case," Rowe said. "At today's gas prices you can't build a new nuclear plant in a competitive marketplace."
Seemingly permanently lower natural gas prices make electricity from gas-powered plants much cheaper than electricity would be from a new, un-depreciated nuclear power plant. Older nuclear plants are quite profitable because the mortgages are paid off. But a new one would cost many billions with big financing costs. The French would like the state of Maryland or somebody else to guarantee the purchase of electricity from Calvert Cliffs 3, but that's not going to happen.
And it's not going to get built on spec, either.
UPDATE: Bill Vanko and I talk on WBAL about how Constellation is trying to sell the merger to customers, employees, politicians and regulators.