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Illinois may have to subsidize more Exelon reactors to keep them running -study

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April 16 (Reuters) - Illinois may have to provide subsidies to more of Exelon Corp's nuclear plants if it wants the carbon-free power those reactors produce to help the state transition from dirty fossil fuels to cleaner forms of energy, according to a study.

Illinois hired Synapse Energy Economics, a consulting firm, to conduct the study in January after Exelon in August 2020 said it would retire "uneconomic" nuclear reactors at Byron in September 2021 and Dresden in November 2021.

That plant retirement announcement came soon after Exelon's Commonwealth Edison utility in Illinois agreed to pay $200 million to resolve a U.S. Justice Department probe over inappropriate lobbying practices.

"Byron and Dresden do face real risk of becoming uneconomic in the near term," Synapse said in its report released this week.

"This has implications for Illinois's policy goals because the plants generate carbon-free electricity that is currently undervalued or even ignored within current wholesale electricity markets," Synapse said.

Illinois Gov. J.B. Pritzker wants the state to reach 100% clean energy by 2050.

In addition, Exelon, which operates 11 reactors at six plants in Illinois, has said Byron and Dresden employ over 1,500 workers and help support local economies.

If Illinois determines it wants to keep the plants in service, Synapse recommended the state re-evaluates how much support the plants need annually.

Synapse suggested Illinois could adopt a subsidy that pays Byron about $19 million a year and Dresden about $51 million a year, or if the state adopts a carbon price, it would only have to pay Dresden about $36 million a year.

The last time Exelon threatened to shut Illinois nuclear plants, the state created the 2016 zero emission credit (ZEC) program that provides the Clinton and Quad Cities reactors with about $230 million a year to keep them operating. That ZEC program expires in 2027.

(Reporting by Scott DiSavino; Editing by Richard Chang)