The Chicago-based company, the largest nuclear power generator in the U.S., is the second company in the past two months to postpone work for a new nuclear plant. St. Louis-based AmerenUE said in April that it was suspending work on a reactor in Missouri.
"We just aren't in a place to pursue the nuclear project," John Rowe, Exelon's chairman and CEO, told The Associated Press in an interview regarding the company's plans to add two nuclear reactors in Victoria, Texas.
A wave of new nuclear plants is expected to play a giant role in meeting the growing need for electricity in the U.S. while, at the same time, helping the nation cut emissions from greenhouse gases that contribute to global warming.
But the projects are so expensive, running an estimated $6 billion to $8 billion per unit, that they are proving difficult to finance.
AmerenUE pulled its project when legislators balked on changing a state law that blocks utilities from charging customers for certain costs of a new power plant before it starts producing electricity.
Making it harder on Exelon was that it did not make the initial cut for federal loan guarantees for the project.
The Energy Department announced in May that it has narrowed its list of the most likely recipients of $18.5 billion in government loan guarantees to four companies. Exelon has started a hostile takeover attempt of one of those companies, NRG Energy, which wants to build two new reactors at its Voglte power plant near Bay City, Texas.
With credit difficult to come by and the economy remaining weak, the loan guarantees have become vital to proceed with these projects.
Exelon said some activity may continue at its site in Victoria, but major preconstruction work such as road upgrades and site preparations will be deferred.
Rowe said the initial $18.5 billion is not enough to help fund the expected first round of six to eight nuclear plants. But with Congress dealing with legislation that would, for the first time, impose caps on carbon dioxide emissions, new nuclear power will be needed, Rowe said.
"In a carbon constrained world, we just have to have a significant nuclear renaissance," Rowe said.
Exelon distributes electricity to 5.4 million customers in the Chicago and Philadelphia areas and natural gas to 485,000 customers in the Philadelphia area.