Low Natural Gas Prices To Set Back Construction of Nuclear Plants

Exelon Corp. Chief Executive Officer John Rowe said he expects natural-gas prices to remain low, pushing back the construction of new U.S. nuclear power plants by a "decade, maybe two."

"We think natural gas will stay cheap for a very long time," Rowe said in an interview today at Bloomberg's headquarters in New York. "As long as natural gas is anywhere near current price forecasts, you can't economically build a merchant nuclear plant."

Rowe said that the price of natural gas would have to rise to $8 per million British thermal units and permits for emitting a ton of carbon dioxide would have to be $25 to make the power prices from new merchant reactors competitive with gas-fueled plants. Merchant plants sell their power on wholesale markets without the income assurance that utilities with regulated electricity rates get.

. . . Absent a price on carbon dioxide emissions, gas would have to rise to $9 or $9.50 to make the reactors economically attractive, Rowe said.