Exelon Generation Media Statement
Information Contact: Deena O’Brien, Exelon Regional Communications Manager, 610-765-5331
Financial Analysis Shows Conowingo Revenues Insufficient to Fund Additional Sediment Mitigation
Providing clean, reliable and affordable electricity has been the paramount focus for Exelon Generation and the Conowingo Dam for the last 90 years.
In December 2017, The Chesapeake Bay Foundation in conjunction with The Nature Conservancy released a statement and accompanying report by Energy & Environmental Economics (E3) that incorrectly assessed the economic status of the Conowingo Dam. The NorthBridge Group, performed a detailed analysis of the E3 report and found that the E3 conclusions are fundamentally flawed due to a gross over-estimation of the future revenues of the Conowingo Dam.
The E3 report inaccurately inflates future revenues in two ways. First, the report greatly overestimates the dam’s capacity revenue, which Conowingo earns for being available as an electricity resource. The dam’s capacity revenue going forward is expected to be roughly 80 percent less than the E3 report estimate. Second, the report bases Conowingo’s future revenues on 2013 energy prices, which are much higher than today’s prices and expected future energy prices. Energy prices in the market available to Conowingo were 30-45 percent lower in 2016 and 2017 versus 2013, yet the E3 report ignored this fact.
When the E3 analysis is run using current information, the analysis demonstrates that Conowingo’s revenues are not even high enough to cover costs plus an adequate return, let alone sufficient to fund additional contributions for sediment. Conowingo provides significant benefits to the region, as confirmed by more than 50 studies since 2010.
As a member of the Chesapeake Bay community, Exelon Generation remains steadfast in our commitment to helping identify the most effective ways to address the health of the Bay.
