Exelon CEO Clarifies Headline-Grabbing No-Grid-Emergency Comment

Chris Crane, CEO of Exelon Corp., seemed to take umbrage with the way comments he made on June 5 were reported by Utility Dive. The website published the headline "Exelon CEO: No grid emergency to justify DOE coal, nuke bailout," but Crane went out of his way to clarify his position while on stage participating in a general session with four other C-suite executives at the Edison Electric Institute (EEI) annual convention on June 6 in San Diego, California.

The Utility Dive story reported, "The CEO of the largest nuclear generator in the U.S. says the retirement of coal and nuclear plants does not constitute a grid emergency that warrants urgent intervention from the federal government, as President Donald Trump directed last week."

However, Crane appeared to feel some of his words were taken out of context. "I got some headlines yesterday from a quick interview, and I want to clarify some of those statements," he said.

"I've been up here [the] last couple [of] years talking about market design issues and the market not recognizing and compensating the [nuclear] units for the reliability or the environmental benefits they have," Crane continued. "This is not a war on gas or any other fuel source, or war on renewables. It's the physics of the system and how it works.

"We have been getting a greater dependency on gas, and that's great for the economy, it's great for manufacturing, but at the end of the day, we're going to be held accountable to keep the lights on and keep it affordable. So, we've had the conversation, but we have an administration-that we greatly appreciate now-that recognizes this is an under-analyzed situation, and if we don't focus on resiliency and national security, we could end up in a very dire situation."

Crane said, "One thing I know is when we shut a nuclear plant down, it's never coming back. Today, the way the markets are designed-New England, PJM-they do not take fuel diversity and resiliency into the capacity market design to the level that needs to be to maintain the resiliency of the system.

"So, we've seen a lot of headlines-we've seen a lot of news-the secretary, FERC [the Federal Energy Regulatory Commission] has got a resiliency docket, the chairman is expediting that. We need to get the insight on what the design basis needs to be and expedite the resiliency review before we lose these units and they can never come back.

"So, my comments yesterday, my comments today-because of the way that the markets are designed-how do you define an emergency? Well, you're starting to see that in New England. Where-you've seen the filings in New England-where they're saying we have to put fuel into the mix on resiliency and the design for reliability," Crane said.

"But then you go on to the national security and the dependency of two systems that have never been designed or coordinated together. The electric day, the electric transmission system, the redundancy requirements to maintain that, and the gas day and the gas transmission. How many electric plants are off of that? What's the vulnerability if one or two gas lines go down from a natural disaster or a terrorist-type approach? How are we physically protected? That analysis has to be done. And that's the analysis that the government has taken on.

"We saw the leaked document at the beginning of the week. It gives some framework, but it doesn't give us enough to know, to say, 'that is the right design.' We're at a situation today that if we continue to allow the nuclear plants to shut down-there's four sites that have announced early retirement in PJM, [a] significant amount of megawatts that will come off. If you care about carbon at all, if you care about the environment at all, the carbon reduction that those units have created and maintained are far more than any investment that's been made in PJM renewables or RECs [renewable energy credits] that have been procured. We're all for RECs. We're all for renewables. But you can't go backwards. We've got to have a design that goes forward," Crane concluded (Figure 1).

1. A group of heavy hitters. The general session on June 6 at the EEI annual convention included (left to right) Pat Vincent-Collawn, chairman, president, and CEO, PNM Resources; Greg Abel, chairman, Berkshire Hathaway Energy, and vice chairman-Non-Insurance Business Operations, Berkshire Hathaway Inc.; Lynn Good, chairman, president, and CEO, Duke Energy; Chris Crane, president and CEO, Exelon Corp.; and Ben Fowke, chairman, president, and CEO, Xcel Energy. Source: POWER

-Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)

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