Exelon Nuclear May Be Downgraded To Junk Bond Status
US nuclear power company Exelon is being reviewed for a downgrade by investor service Moody’s. The company is expected to see a 40% increase in debt. Moody’s cited losses and over dependence on their non nuclear business investments as reason for Exelon’s troubles. Exelon’s has invested heavily in buying up old reactors around the US that are described as “cash cows” due to their building costs being now earned back. Exelon buys them at a deep discount with the intent of squeezing as much profit out as possible. Even this scheme has not helped the company’s bottom line. The GAO recently found that the decommissioning fund for many of these old reactors is not sufficient to cover the actual costs of decommissioning and disposal of the plant. With the leading owner of old reactors losing money and possibly investors and insufficient funds to dispose of these power plants what will happen as they become too old or unprofitable to operate any longer?
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