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Technology Stocks : The *NEW* Frank Coluccio Technology Forum

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From: axial	12/26/2012 3:15:20 AM
	1 Recommendation Read Replies (1) of 46821

[Regulation] The Nation's Nuclear Plants Are Nuked 'While the nation has been focused on new sources of natural gas and shale oil, few noticed the slow decline of an older energy source, nuclear power. Today, commercial nuclear power is struggling to stay in the game. The power markets are hammering the nation's nukes. Over a decade ago, several regions decided to create Regional Transmission Organizations (or Independent System Operators) and use the market to set power prices. Today, North America has ten independent RTOs/ISOs, where wholesale power is auctioned every few minutes. [...] Most nuclear units are "must run plants" and they will produce power even if market-clearing prices fall below production costs. Recently, some nuclear plants have been booking negative gross margins. They hope they can make up losses with subsequent gains and average a gross margin. A gross margin is not always enough. Nuclear units must pay all their bills and leave something for shareholders. Recently, some nuclear units are achieving modest gross margins, but not enough left to pay all the bills or achieve any earnings. A Different Picture in Regulated States, but Challenges Remain [...] The State of New York wants Entergy's Indian Point to retire 20 years early and they are vowing a fight to prevent further operations. Governor Cuomo believes the state can import enough power from Canada to provide them with enough power to assure regional reliability. But in the case of New York City, existing transmission lines are inadequate and they are constrained. New lines will be needed to deliver Canadian power to the energy hungry city. New Jersey regulators already negotiated the early retirement of Exelon's Oyster Creek Nuclear Generating Station. Oyster Creek is 630-megawatt facility and it will go on the scrap heap ten years early in 2019. A pattern is developing. It may take a few years, but it appears small nuclear plants will face increasing pressure to retire early. They cannot compete, particularly in soft markets. Some plants will find their costs consistently exceed any benefits they earn and their owners will be forced to retire and dismember plants. Natural gas may replace retiring nuclear plants. New turbine technologies and low fuel costs allow some gas turbines to outperform nuclear power plants. But it is unlikely fuel prices will remain low for the next 60 years, the design life of a new nuclear unit. energy.aol.com Jim

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