Exelon’s opposition to extending the wind production tax credit has cost the utility company its seat on the wind industry trade group’s board of directors.
The American Wind Energy Association’s board voted last week to oust Exelon from the board and from the organization, specifically because of the company’s vocal opposition to extending the PTC.
“We regret that the actions of the Exelon Corp. made it necessary for the American Wind Energy Association to terminate Exelon as a member,” AWEA spokesman Peter Kelley told POLITICO.
Two-thirds of the board must vote to terminate a company’s membership in AWEA. The votes were collected electronically Thursday and Friday, and the company was informed of the decision Friday evening, Kelley said.
Exelon spokeswoman Judy Rader called the move “unfortunate,” and Senior Vice President David Brown said the company received no warning before being kicked out.
“We had not had any communications with them previous that would indicate that that was coming,” Brown said Monday.
He added that “the wind PTC has run its course. And it’s reached the tipping point where it’s distorting competitive markets that we operate in, … and it’s displacing other clean generation in the market.”
Specifically, wind is undermining the company’s nuclear fleet, Brown said.
AWEA said it moved to terminate Exelon’s membership because of the company’s active participation alongside groups looking to have the credit expire as scheduled at the end of this year.
“We don’t believe in policing differing views of our members, but in this case it’s not differing views, it’s the way Exelon has been acting that is inconsistent with AWEA’s mission and our purpose, which is to promote the wind energy industry,” Kelley said. “Exelon is publicly leading an organized campaign to kill the production tax credit that is our No. 1 priority as an industry.”
Exelon executives have made no bones about their desire to see the 2.2-cents-per-kilowatt-hour credit expire.
Brown spoke Monday for congressional staff, organized by the American Energy Alliance, on why the PTC should end.
Exelon owns around 900 megawatts of wind projects – nearly 2 percent of U.S. wind capacity.
Still, Exelon’s primary focus is nuclear energy, in which it’s a powerhouse: Its 10 power plants and 17 reactors in Illinois, Pennsylvania and New Jersey represent roughly 20 percent of the U.S. nuclear industry’s total capacity. About 93 percent of the company’s total electricity generation comes from nuclear power.
Executives have described market disturbances created by the PTC as bad for other forms of energy – particularly nuclear.
“Subsidization of technologies – and often they have made sense in history to get off the ground from a public policy standpoint – does have the effect of creating some kind of distortion, and that distortion typically has an effect on the other things that are happening in the marketplace,” Executive Chairman Mayo Shattuck said at a June forum sponsored by The George Washington University and Arent Fox LLP.
The problem, Shattuck said, is that wind power is intermittent and requires other forms of generation to cycle up and down quickly, a costly and difficult process for nuclear power.
Congress’s on-again, off-again short-term extensions of the PTC have also kept Exelon from doing the long-term planning it says it requires for nuclear and other forms of generation, the company says.
Exelon has more than $400 million marked for wind development that it will funnel to other projects if the PTC runs out, CEO Christopher Crane told investors last month.
Even though Exelon has a wind portfolio, he added, the utility would prefer to navigate a market without what he called “unintended consequences with all the fundamental shifts in the generating stack right now between coal retirements, natural gas coming down, trying to subsidize a single source can create some market distortions.”
“We’re asking for a break period, let’s let the market stabilize,” Crane said. “That PTC has been in place since 1992, I believe. And I think that’s enough time to jump-start an industry, 20 years. So we’ve made it known even as a wind company that it should be stopped and let’s stabilize the fundamentals so we all know where we can make our investments.”
Darren Goode contributed to this report.
Copyright 2012 Capitol News Company, LLC
All Rights Reserved
|Wind Watch relies entirely
on User Funding