Exelon's Rowe says gas prices may slow new reactors

From the Daily Herald:

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.

Natural gas for October delivery fell 4 cents, or 1 percent, to $3.774 at 2:36 p.m. on the New York Mercantile Exchange. Prices have fallen 33 percent this year and are down 76 percent from the 2005 high of 15.378.

Gas was used to generate 21 percent of U.S. electricity in 2008, according to the Energy Information Administration. It's the second-biggest fuel source for U.S. power generation behind coal and drives electricity prices in parts of the country such as Texas.

Read more