Title: Domino Effect Unlikely from US Nuclear Plant Closures
Source: Fitch Ratings
Date: 22 October, 2012
Domino Effect Unlikely from US Nuclear Plant Closures
Low power prices as a function of weak demand in the Midwest and the lack of a capacity market within the Midwest Independent Transmission System Operator region have led Dominion Resources to shut down its Kewaunee plant in Wisconsin, according to Fitch Ratings. Dominion said it would close the plant during the second half of 2013.
A significant increase in U.S. natural gas output has translated to historically low power prices. Those prices, coupled with a limping U.S. economic recovery, led to a significant decrease in demand.
We believe Dominion’s decision to close Kewaunee is indicative of a difficult operating environment for merchant nuclear plants in the Midwest. This is the first closure of a U.S. nuclear plant as a result of extremely low, long-term power prices. While other small, single-unit merchant nuclear plants may also be at risk for closure, we feel any such decision would depend on management strategies and the existence of power purchase contracts. [...]
h/t Anonymous tips
Published: October 22nd, 2012 at 11:41 pm ET