April 10, 2014 | By Barbara Vergetis Lundin

Exelon is calling for energy policy and market reforms in order to ensure a clean and reliable energy supply. The energy industry has experienced large shifts in how energy is produced and consumed, with an influx of low-cost natural gas, rapid expansion of subsidized renewable generation, smart grid deployment, behind-the-meter technologies and low demand growth reshaping the energy landscape. Market rules have to keep up with that evolution, Exelon contends.

Competitive market rules and state and federal energy policies need immediate reforms to ensure a diverse, clean, reliable, and affordable energy supply, Exelon Generation President and CEO Kenneth W. Cornew said at the recent Platts Global Power Markets Conference.

"Rules that are in place today were designed for a fundamentally different energy market," Cornew said. "They need to be reformed to reflect our current environment and recent changes in how we produce and use energy."

Unpredictable winter weather and surge in energy demand exemplify the urgent need for reforms, as grid operators struggle to keep up with demand. Many resources had high forced outage rates or were otherwise unable to perform. A large number of natural gas plants across the country were unable to get access to fuel, highlighting the consequences of an overreliance on gas generation.

"The extreme cold highlighted…that a diverse fleet of generation that includes high-performing baseload power plants that have firm fuel, such as nuclear, is critical to grid reliability," Cornew said.

However, Cornew said, flawed market rules and the current patchwork of state and federal energy policies subsidizing renewable energy do not properly compensate nuclear for its reliability and 24/7 emissions-free energy.

Cornew added that the combination of competitive market forces and artificial price suppression resulting from well-intended, but poorly designed, energy policies could force some highly-efficient nuclear plants to shut down, threatening grid reliability and setting back efforts to meet carbon reduction goals.

"The economic viability of these highly reliable, low-carbon generation sources is at risk, not because they can't compete in the marketplace, but because they can't compete when the playing field is uneven," he said. "We need to better align our energy policies with our competitive market rules to ensure we have a clean, reliable and economic energy supply going forward."

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