Exelon, EnergySolutions make $900 million deal

Exelon Corp., owner of the largest U.S. commercial fleet of nuclear power plants, agreed to pay EnergySolutions Inc. about $900 million to dismantle its Zion nuclear power station in Illinois.

Exelon will transfer its decommissioning trust fund, valued at about $900 million, to pay for EnergySolutions to complete work at the site, which lies on Lake Michigan about 40 miles north of Chicago. Zion hasn't generated power from its two reactors since 1998, Exelon said Tuesday in an e-mail statement.

EnergySolutions, based in Salt Lake City, would take over the station's license in 2008, if the U.S. Nuclear Regulatory Commission approves the agreement. It could be the first time regulators allow a non-utility to hold a reactor license.

"This project launches our license stewardship strategy whereby we conduct decommissioning and site restoration work as both owner and licensee," said Steve Creamer, chief executive officer of EnergySolutions. "Under this program, we will utilize the unique capabilities and facilities of EnergySolutions to reduce project schedules, increase the efficiencies of the decommissioning process and better control project costs."

Exelon had planned to spend more than $1.1 billion to dismantle the reactors at the 257-acre site, in a project that could last until 2058. EnergySolutions could have the work done by 2018, Exelon said.

EnergySolutions is able to manage the decommissioning on a quick schedule because it owns its own low-level waste site in Utah, according to a company news release.

"We will utilize our extensive technical expertise and experience in decommissioning nuclear plants to successfully clean up this site years ahead of schedule," said John Christian, president of commercial services at EnergySolutions. "We are committed to conducting the decommissioning in a manner that protects citizens, workers and the environment."

The company said the decommissioning will be performed using state-of-the-art technology and rigorous environmental controls to protect human health and the environment and to preserve the lakefront and wetlands properties. When the decommissioning work is completed and independently verified by the NRC, a great expanse of lakefront property will be made available for a variety of other uses.

"This is a unique opportunity to make hundreds of acres of lakefront property available for other uses a decade or more earlier than we thought possible," Tom O'Neill, vice president of new plant development for Chicago-based Exelon's nuclear subsidiary, said in a statement.

EnergySolutions would be liable for any costs above the amount in the decommissioning funds, and any money left in the fund after the work would be returned to ratepayers of Commonwealth Edison, Exelon's utility subsidiary.

Spent nuclear fuel would remain on the site and under Exelon's ownership until the U.S. Energy Department begins accepting the high-level waste at its proposed repository at Yucca Mountain, Nev.

Exelon is also seeking a ruling from the Internal Revenue Service about transferring the decommissioning funds.