The Future Of The National Electric Power Grid; A Long Article On Exelon; A Must-Read; Bookmark -- June 22, 2014

Updates

July 4, 2016: update on Exelon in Illinois.
 

Original Post

 

A reader has sent a very, very good article on future of US utilities and the national power grid, using Exelon as a contemporary case study. It's an article that should be read by anyone interested in the Bakken, and now, perhaps, the "Sleeping Giant." If one does not have the time to read it today, bookmark it for future reference. It's been my experience that many of these stories are eventually archived for subscribers only or removed completely from the net at some point in the future.

ChicagoBusiness is reporting:

Six years ago, Exelon Corp. held the strongest hand in the power industry. Power prices were soaring, and profits at the Chicago-based company's large fleet of nuclear power plants were rising along with them.

Prospects for federal legislation to set a price on carbon emissions and combat climate change were buoyed by expectations that Democrats would retake the White House that year. With a nearly carbon-free fleet operating exclusively in markets where regulators don't limit what power plants can charge, Exelon appeared better positioned than any of its rivals.

In April 2008, with a stock price nearing its all-time high of $91.64 per share, Exelon CEO John Rowe made what amounted to a victory speech in a conference call with analysts. 

That was six years ago. This is now:

Gas prices still haven't recovered. And neither have Exelon's fortunes.

Now at $36.76, Exelon's stock has fallen 60 percent since its July 10, 2008, peak, more than any other major utility in the U.S. during that period.

As its nuclear plants increasingly look like an albatross rather than a boon, Exelon is at a crossroads. The future of power generation and distribution is uncertain, but demand for electricity is slack and likely to remain so because of improvements in energy efficiency. Many predict that the industry gradually will move away from behemoth central power stations like Exelon's nukes. Instead, it would feature smaller plants that can cycle on and off with fluctuations in demand coupled with on-site power sources in homes and businesses such as solar panels or even small-scale natural gas generators. 

I don't invest in Exelon, never have, never will, and I'm more interested in the article for the discussion of the future of the national electricity grid. Even experts come down on opposing sides what the future holds. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here.

Another story line: if this could happen to Exelon, it could happen to other utilities. MDU must be watching this play out very, very closely. 

Previous stories on Exelon:

• Obama's war-on-coal has come home to roost, May 27, 2014.
• CBR terminal on leased land near an aging Philly Exelon nuclear reactor, May 14, 2014
• Illinois at risk of losing three of six Exelon nuclear reactors, March 2, 2014.
• In a post-nuclear world, going, going, ... gone, October 31, 2013.
• Exelon kicked off wind board, September 11, 2012.
• Exelon announces first big sale of coal-fired US power plants in four years, June 8, 2012
• Demise of the US coal industry, June 8, 2012
• Cheap natural gas throws energy markets into turmoil, February 4, 2012
• Deere sells wind business to Exelon, December 10, 2010